Loyalty programmes have been
standard marketing fare for banks for many years but few
initiatives have proved as big a hit as Citi’s ThankYou programme.
To mark the pioneering scheme’s fifth anniversary, Citi is
rewarding ThankYou’s 13 million members with bonus points and extra
benefits, reports Douglas
Blakey.
Introduced in July 2004, initially for the bank’s credit card
clientele, Citi’s Thank-You rewards programme highlighted the
bank’s belief in loyalty as a central plank of its marketing and
branding strategy. But the decision in April the following year to
extend ThankYou to the bank’s entire retail banking client base,
with the aim of rewarding customers for ‘everyday banking’, upped
the ante in terms of rewards-based loyalty programmes and remains
one of the most significant bank marketing initiatives of the
decade.
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While Citi was not the first bank to launch a
debit card-based loyalty scheme, it could claim to have blazed a
trail by offering a programme that crossed most banking products
and spending behaviour.
Specifically, ThankYou pioneered the concept
of rewarding customers with additional points based on their
account package in combination with the number of Citigroup
products and services they have, including checking accounts,
savings/money market accounts, certificates of deposit, debit
cards, online bill payment, direct deposits, personal loans,
mortgages and home equity loans. ThankYou Members can also get
points by booking travel at Expedia.com, and by shopping through
the ThankYou Bonus Center, a virtual shopping mall with 400
selected retailers.
That marketing strategy remains a popular tool
today, evidenced by the July re-launch of Standard Chartered’s
cross-product loyalty scheme for its Priority branded mass affluent
customers (see RBI 616).
Five years after launch and ThankYou can claim
to be one of the world’s largest loyalty schemes, with membership
at 13 million. Other major schemes include Clubcard from the UK’s
largest retailer Tesco, which also boasts around 13 million
customers, and Germany’s Payback scheme, which says that 60 percent
of the country’s households are members.
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By GlobalDataCiti’s proprietary ThankYou website
(www.thankyou.com), which offers comprehensive information about
the scheme as well as a place to redeem points, is also among the
most substantial of its type. Nancy Gordon, executive
vice-president for Citi’s ThankYou Rewards programme, told
RBI: “ThankYou.com is a high-volume website, with millions
of unique visitors during our busiest season. We generally see a
high conversion rate for all of our promotions.”
A customer with a mid-range Citi EZ Checking
Account who also has a debit card, has their salary credited to the
account as well as a Citi personal loan and mortgage and who spends
$1,000 a month on their debit and credit cards, will earn 1,725
ThankYou points a month or 20,700 a year.
A balance of 20,700 points would qualify for
redemption by way of gift or prepaid cards of $150 – just about
covering the monthly $7.50 fee for the EZ Checking Account (the fee
is waived if $1,500 is maintained in the account or if two bills
are paid online per month). The same suite of products held by
CitiGold customers – a free account aimed at the $100,000, mass
affluent segment – who spend $2,000 on each of their debit and
credit cards each month, would result in around 3,900 Thank-You
points per month or 46,800 points per year.
The occasion of the scheme’s fifth anniversary
has resulted in one of ThankYou’s biggest promotions, which kicked
off at the end of July and is scheduled to run until 30 September,
offering members new opportunities to earn and redeem points,
including five promotions:
• Deal of the Week: a 40 to 50 percent
discount on a selected rewards each week;
• Bonus Centre: five times the normal Thank
You Points when shopping at selected merchants in the ThankYou
Bonus Centre;
• Citibank Promotion: members with a Citibank
checking account can earn 500 Bonus Points by setting up their
username and password on the website;
• Travel Promotion from Expedia: double points
for booking hotel reservations or a package at www.expedia.com;
and
• Discounted reward promotions.
In an attempt to keep the programme fresh,
Citi enhanced the scheme last year by introducing rewards from
leading online retailer Amazon.com, offering members more choices
for their points as well as introducing a Visa-branded prepaid gift
card and extending rewards to cover mortgage payments due to any
bank, not just Citi, as well as the option to redeem points to
cover student loan repayments.
Paying off loans and
mortgages
According to the bank, the current economic
downturn has served only to heighten interest in the programme,
with consumers using their points for a wide range of practical
rewards, such as statement credits and cash as well as the latest
option to pay off student loan payments and mortgages.
“Consumers in general are spending less and
saving more, which has slowed ‘earn velocity’. We are introducing
and promoting more rewards at lower-point prices to appeal to those
with lower point balances,” Gordon added. “At the same time,
members are telling us that they like to use points to treat
themselves, probably for items that they would not now want to use
cash on,” he said. Such customers are catered for via the ThankYou
website’s ‘Your Wish Fulfilled’ feature, offering the option to
customise reward redemptions.
By the most crucial business measurement,
ThankYou has paid off for Citi: it has, said the bank, reinforced
loyalty. “Network members are more engaged than non-ThankYou
Members,” said Gordon.
|
REWARDS |
||||||
|
Citibank – points credited per |
||||||
|
Number of |
Access |
Basic Banking |
EZ Checking |
Citibank Account |
Everything Counts |
CitiGold |
|
3 |
25 |
25 |
50 |
100 |
100 |
150 |
|
4 |
25 |
25 |
75 |
200 |
200 |
300 |
|
5 |
50 |
50 |
150 |
400 |
400 |
600 |
|
6 |
75 |
75 |
225 |
600 |
600 |
900 |
|
7+ |
100 |
100 |
300 |
800 |
800 |
1,200 |
|
Source: Citi |
||||||
