David Riddell is Featured at Payments Conference, Advocates Portfolio Approach to Credit Card Strategy

October 2, 2007

DUBAI – To make the most of their established base of credit card customers, issuers should manage the business as a portfolio, as opposed to a collection of separate products and activities, David Riddell today told participants at a software user summit sponsored by Welcome Real–time, a global leader in technology that enables real–time card usage rewards at the point of sale.

A Senior Consultant at Novantas LLC, Riddell led a session titled "Realizing the Full Potential of Instant Rewards." He said that rewards programs work best as part of a comprehensive program that includes 1) customer segmentation; 2) program design; and 3) customer communications and campaigns.

The value of customer segmentation lies in the establishment of marketing priorities and insights, Riddell said, which then provide guidance on campaigns to encourage card usage, both transactions and revolving balances.

With program design, one major component is creating the appropriate blend of rewards, he said, ranging from sales promotions, such as coupons and gifts, to loyalty programs that include rewards points and cash back.

A second key is the refinement of so–called "common pool investments," he said, so that promotional outlays better support priority customer segments and card usage patterns, and better balance respective roles and returns for issuers and retailers.

Riddell said a third component of program design falls under the heading of retailer relationship management. Card issuers tend to gravitate toward large, high–profile retailers, he said, but often can win greater cooperation and financial returns by working with smaller retailers instead.

Finally, Riddell said, issuers must carefully analyze their marketing campaigns to pinpoint issues and opportunities and provide a foundation for continuous improvement. Care is also needed in the selection of communication channels used to reach target customers, he said.

Novantas is the acknowledged leader in customer science and revenue strategy in the financial services industry. The Firm specializes in investigating and interpreting customer needs, attitudes and behaviors in ways that help companies to refine marketing decisions, customer strategies, and sales and service activities.