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Following publicity about increases to fees, the Commonwealth Bank is busy
promoting its revamped credit card rewards program with a new advertising
campaign.
Rewards programs have become an important marketing tool for credit card
providers in their endeavour to attract customers, with all offering points that
can be redeemed for air travel and at retail outlets.
The bank's general manager of consumer financing, Rod Hyde, said it had
revamped its rewards program and launched the campaign after market research had
shown little recognition beyond existing customers.
``Outside of the Commonwealth customer base, there really wasn't that much
awareness that we have a loyalty program," Mr Hyde said. It therefore changed
the name of the program from True Awards to Commonwealth Awards to raise
recognition, as well as introducing more partners.
The banks and credit providers such as American Express and Diners Club say
rewards programs are one of the most important factors that attract new
customers to their institutions. However, the programs have become more
expensive, with Commonwealth and ANZ both putting up annual fees for their
credit cards last month. NAB has also changed the value of its reward points.
Commonwealth has launched its campaign as part of an acquisition strategy,
with the annual fee scrapped in the first year and a lower interest rate for the
first six months in an attempt to attract new customers.
But American Express's head of advertising and loyalty, Phil Gunter, said it
was difficult to advertise the benefits of a rewards program because,
superficially, most offered similar options.
``It's very difficult to convey to a prospect how good your rewards program
is," he said. ``Almost every [program] has Qantas Frequent Flyers, everyone has
retail partners ... It's not until you are a member that customers actually get
the value."
ANZ, which has one of the best-known rewards programs due to a direct
alliance with Qantas, has not advertised its credit cards this year, preferring
to attract customers by direct marketing through the Qantas Frequent Flyer and
its own database.
For all except the bank's existing customers, the reward program is the main
attraction for prospective credit card users, said ANZ's managing director of
credit cards, Jenny Fagg. And it's a marketing tool that is only getting more
competitive.
``Certainly, compared to three to five years ago, the Qantas program was
probably about the only one out there in terms of its calibre," she says.
``Clearly there are now more products which are more similar."
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