Titien Ahmad reports from Singapore, where Citi has
rolled out the first pan-regional Asia-Pacific cards loyalty
scheme. Via a hi-tech website the bank describes as an interactive
online magazine, Citi’s Asia-based customers are being hit with a
number of products in an effort to get them to use their Citi cards
more.
As Asia’s highly competitive cards markets get ever more
aggressive, particularly when and where banks are targeting
affluent segments, spending-based rewards programmes have become a
major tool to entice cardholders to use a specific bankcard at the
point of sale.
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By GlobalDataCard issuers are no longer solely interested in just card numbers,
but in getting people to spend more on their cards to increase the
profitability of their portfolio.
Marketing campaigns include instalment payment plans at 0 percent
interest in partner retailers, reward programmes focused on
specific segments, giveaways based on transaction size or
frequency, automatic cashback refunds credited to the card and
attractive discounts.
Rewards programmes are becoming ever more popular, driven by
statistical data that show such programmes increase card spend.
Some market data indicates, for instance, that credit cards with
loyalty schemes show an increase in spending of up to 90 percent
compared with one without rewards.
Rewarding cardholders for repayments
Australia’s ANZ recently released a credit card that
rewards cardholders for repayments – on interest, fees, cash
advances and balance transfers – instead of direct spend
(see RBI 583). Each dollar
repaid earns one point and the 13.99 percent interest rate is lower
than most reward card rates.
Maybank’s Singapore subsidiary ran a highly successful rewards
programme for its platinum cardholders. In an interview with
Cards International, a sister publication to RBI,
Helen Neo, head of consumer banking in Maybank Singapore, said:
“Maybank introduced an exclusive Porsche reward programme for its
Platinum card customers in July 2007 to increase utilisation and
recruit new cardmembers.
“Card customers only need to charge S$6,000 [$4,150] to their
credit cards to redeem one-day free usage of either a Porsche
Boxster of Porsche Cayenne… We are seeing more than 20 redemptions
every week and… the Porsches are fully booked up until March
2008.”
Looking to up the ante, Citi, the most significant pan-Asian card
issuer, has now launched a regional online rewards portal, http://www.citirewards.com/,
which is promising easier, flashier access to an extensive range of
products and other rewards for its cardholders.
The importance of Citigroup’s non-US cards franchise was
highlighted in its third-quarter results, published at the end of
October. The group reported overall net income of $2.21 billion, a
decline of 60 percent from the prior-year quarter (see table
below).
At its International Cards unit, however, revenues grew 88 percent,
primarily driven by higher purchase sales and average loans, up 37
percent and 52 percent, respectively, and improved net interest
margins.
The largest geographic spread
Citi’s website has been rolled out in Singapore,
Malaysia, Thailand, Indonesia, the Philippines and Australia, and
other markets around Asia-Pacific will follow suit – Citi boasts
the largest geographic spread of any international card player,
with a presence in 36 markets.
In eight of the 12 Asian markets in which it operates, the bank is
a dominant issuer. As of November 2007, Citi had over 13 million
cards across Asia-Pacific.
Via its new portal, cardholders across the region can view rewards
online and access related links within certain categories: someone
redeeming cooking utensils will also be able to download recipes
provided by Citibank’s partners, for example. The bank is rolling
out the programme over the next seven to nine months.
The new site, which uses hi-tech moving images to create a very
modern online experience, has been designed to serve as an
e-magazine, says the bank. Apart from a detailed listing of
available rewards, Citi¬Rewards.com features several sections
including updates on restaurants, fashion, travel, culture and
sports. There are several rewards categories, including glamour,
culture, well-being, family, and charity.
“As the leader in innovation for retail banking in Asia, Citi is
pleased to introduce the industry’s most novel and creative
customer rewards website,” said Surath Chatterjee, Citi’s
Asia-Pacific regional head of card products, at the launch in
Singapore on 29 November. “Other rewards programmes today are
commoditised and generic, with identical items being offered
through similar processes. At Citi, our goal is to make our
cardholders feel truly rewarded. We want to engage with our
customers at a personal level and provide value-added services that
match their lifestyles. The CitiRewards selection should inspire
new ideas on how to plan a party, help a favourite charity or make
the most of a vacation.
“For example, a tent isn’t just a tent if it gives you the
opportunity to plan a trip, connect with nature and spend quality
time with your loved ones. The holistic, encompassing lifestyle
experience is what we strive to offer our Citibank
cardholders.”
Chatterjee sees a big gap between query and transaction in the
online space and seeks, he said, “to capture customers as they come
through the net and interact with us. This is a big step for us, to
create a common and consistent way of addressing consumers.
“CitiRewards.com will often have the same offerings across all
markets; everyone gets the same choice… What we are offering is a
more efficient way to reach out to customers.”
According to the bank, the CitiRewards programme is the
widest-ranging Asia-Pacific card rewards scheme and has almost
3,000 products available for redemption. The group has partnered
with over 500 establishments across the region in effort to provide
cardholders with the most extensive range of reward choices.
At the CitiRewards website launch in Malaysia, Vipin Agrawal,
business director for cards and personal loans, said that in
Malaysia there are already 60 merchants involved in the scheme and
300 rewards items being offered to its cardmembers for 2008. He is
targeting to double customer’s online redemption transactions to 40
percent from the current 20 percent in the next 18 to 24 months.
Citibank Online has close to 350,000 registered users in Malaysia,
he added.
Stay for Sure
Market-leading Citibank Malaysia has rolled out a
number of rewards-focused campaigns to increase card use. Stay for
Sure gives away free hotel stays to cardholders who make a minimum
spend of MYR8,000 ($2,400) in three months.
With the success of Stay for Sure, Agrawal extended the programme
to Fly for Sure, guaranteeing free flights for a minimum spend of
MYR50 in a single transaction ten times a month for three
consecutive months. Cardholders can fly on a budget airline to
popular holiday destinations nearby such as Langkawi and
Phuket.
But Agrawal said: “Feedback from our customers [has] indicated that
a large number of them would participate in a campaign that offers
guaranteed rewards instead of contests. With this programme, we are
not only encouraging customers to consolidate all their purchases
on Citibank credit cards but we are also rewarding existing loyal
customers.
“People may carry several credit cards in their wallets. But with
Citi’s focus on loyalty and usage, the incidence of use of a Citi
credit card is certainly higher than that of others. From an
industry-wide perspective, Citi also tends to give higher credit
lines to customers. With attractive usage promotions and merchant
offers, we will continue to make the Citi credit card the primary
card in customer’s wallet.”
There are plans to extend the online reward redemption to other
products across the bank but, at the moment, only customers with a
Citi card can access the portal. Singapore will remain a test-bed
for the bank’s pilot launches due to its relatively developed
consumer market and multi-racial mix, which provides good initial
insight into consumer behaviour across the region.
“Innovations that succeed in Singapore translate into bigger
innovations in other markets,” said Chatterjee.
In terms of future expansion into the key Chinese market,
Chatterjee added that the bank does not have plans to issue its own
cards in the foreseeable future and said it will continue on the
partnerships that it has built with local banks such as Shanghai
Pudong Development Bank and Guangdong Development Bank.
