City Commercial Bank Credit Card Marketing Methods

I have recently been reading the "definition-level" classic masterpiece "Marketing Management" by Dr. Philip Kotler, the father of world marketing. I have gained a lot from it, especially the complete marketing path and methodology explained in it. I would like to combine the contents of the book with credit card operations and share my own insights.

First, let's look at the credit card issuance data. According to statistics from the Central Bank, as of the end of the first quarter of 2021, the number of credit cards and combined credit and loan cards in use nationwide reached 784 million (749 million in the same period last year), and the growth rate dropped to 4.6% . The average number of credit cards and combined credit and loan cards held per person increased to 0.55 (0.53 in the same period last year).

Considering that 40% of my country's permanent population still lives in rural areas, and there are also a large number of Huabei, Wechat Loan, Baitiao and other users, the per capita number of credit cards in a broad sense is far more than this. A research report by CICC estimated that the average person has more than 1.76 credit accounts .

Let’s look at another set of Internet data, the 47th "Statistical Report on the Development of China's Internet" released by the China Internet Network Information Center (CNNIC): As of December 2020, the number of Internet users in my country reached 989 million, the number of mobile Internet users reached 986 million, and the Internet penetration rate reached 70.4%. The growth rate of Chinese Internet users will drop to 3.6% this year. Taking into account children and elderly people, Internet traffic has almost reached saturation.

Based on the above data, we can clearly see that the growth rate of credit card issuance has slowed down. If banks want to add new card-issuing customers, they must either snatch customers from other banks or from Huabei Baitiao. The Internet dividend has already faded and cannot bring in too many incremental customers.

In the era of inventory, how to carry out user marketing and management has become the hottest topic at the moment.

1. Analyze demand from a marketing perspective

Back to the book of marketing guru Philip Kotler, there is a simple definition of marketing, "making profits while satisfying customer needs." If we break down the meaning of this sentence, the most important subject-predicate relationship is "meeting customer needs."

From pre-sales, sales and after-sales of the marketing life cycle, marketing = demand management + user operation management + customer relationship management. As the first step in the top-level design of a product/brand, demand management requires a lot of effort at the beginning to conduct sufficient market research and product design. The concepts involved are STP (Segmenting, Targeting, Positioning) and 4P theory (product, price, place, promotion).

Taking credit card products as an example, a bank is preparing to issue a new credit card product. Four card products were considered, namely: women's card, supermarket card, a milk tea co-branded card, and city feature card.

According to Kotler's theory, from the perspective of demand, demand can be divided into three dimensions: need, demand, and want . This is similar to Maslow's hierarchy of needs. Both women's cards and supermarket cards meet simple material needs. A certain milk tea co-branded card actually carries a certain brand identification need, while the city characteristic card represents a higher level of self-identification.

From the perspective of market competition , both women's cards and supermarket cards face competition from multiple products in the same industry; while co-branded cards and city characteristic cards can rely on brand and local resources to avoid excessive competition.

From the perspective of product positioning , the target customer group of the female card is women; the supermarket card is mainly for household personnel customers; the target customer group of the milk tea co-branded card is mainly young customers; and the city characteristic card is mainly for people with self-worth identification.

As for marketing scenarios and promotion strategies, each product has its own focus. For city commercial banks, it is important to avoid excessive competition with large banks and choose the right track for themselves. Changsha Bank’s Cha Yan Yue Se co-branded card and Zhongyuan Bank’s City Impression Card are both relatively outstanding product designs. The common point is that they all focus on " local characteristics ".

2. Build a scene ecosystem and create a brand

"No scenario, no finance." In the past two years, there has suddenly been a wave of scene ecosystem construction. On July 5, Bank of China released the "White Paper on the Development of Financial Scenario Ecosystem Construction Industry". Faced with the tide of the times where digital technology is driving industrial transformation, Bank of China has also committed itself to the scene construction business with an open and inclusive attitude, striving to build a "finance +" scene ecosystem and actively exploring the paths and answers to digital transformation.

When it comes to scene construction, I have to admire China Merchants Bank's layout on the scene side. As of the end of last year, the MAU of China Merchants Bank App and Palm Life App reached 107 million, and the MAU of 23 scenarios exceeded 10 million. Among them, the transaction volume of the two major scenarios of "meal tickets" and "movie tickets" was nearly 10 billion yuan.

For city commercial banks, efforts should be made to build full-scenario coverage and construct a complete financial ecosystem. Neither the time cost nor the money cost can support the construction of such a system. In this case, it is better to build a vertical field scenario to create a brand effect. As a track for brand management and differentiated competition.

For example: Shanghai Bank has a buy-one-get-one-free promotion for Samsung Bucks every week; Xi'an Bank offers movie tickets for 5 yuan every month; Shunde Rural Commercial Bank has a Super 666 promotion every month; the formation of a brand not only brings market share, but also mind share and emotional share. It is one of the main criteria used by customers to distinguish other competing products.

A brand is a promise a company makes to consumers. Branding is the process of increasing product brand awareness and can help a product have its own business card. The value of brand marketing is far higher than scattered user reach marketing.

3. User Relationship Management

During the product sales process and after-sales operations, you need to deal directly with customers. People are the most uncontrollable factor in the entire sales chain. While meeting customer needs, we need to classify and divide customers. Distinguish between high-value customers and low-value customers to facilitate subsequent precision marketing.

The customer's evaluation criteria for product satisfaction mainly come from the value the product brings to him. The triad of customer value: quality, service, and price . Value is directly proportional to quality and service, and inversely proportional to price. If the product fails to meet customer value, customers will be disappointed; if it meets customer value, customers will be satisfied; if it exceeds expectations, customers will be happy. Customer satisfaction is a very important foundation for maintaining customer relationships.

In order to improve customer satisfaction, it is necessary to provide differentiated services to customers. There are usually two ways to achieve this. One is to build a label system and customer portraits , and perform differentiated operations based on the characteristics of different customer groups. The other way is to build a membership level system and perform differentiated operations based on customer contribution.

The two customer management models do not conflict. The main difference is that building labels and portraits can stratify customer groups more flexibly, but the operating costs are relatively high; the model of building a membership system is a white box model for customers, and the customer experience is better, but after the membership system rules are defined, the rules are not convenient to adjust flexibly.

In the traditional retail system, the membership level system is a very common user management solution. Starbucks has Starbucks membership, JD.com has Plus membership, Taobao has 88 membership... This model is also applicable to other scenarios, such as payment scenarios. Alipay has membership, UnionPay QuickPass also has membership, and credit cards can also have a membership system.

In fact, many large banks have launched membership systems before, such as the star membership of China Guangfa Bank, but the lack of hook benefits failed to attract customer interest. In comparison, Nanjing Bank's N+ card membership benefits, including cash back ratio and Starbucks benefits, are more likely to resonate with customers.

Customer companionship is a higher value-added service for users, also called extra care . This concept has been mentioned before in the field of smart investment advisors. However, artificial intelligence can never replace human care. For truly high-value customer conversions, try to use manual outreach as much as possible.

The above are some thoughts and ideas about the digital operation of credit cards, which can improve the product's functional system through the marketing life cycle. Build a more complete user management system solution.

Author: Ascending Insight

Source: WeChat official account: Shengwei Insight