Build It Right And They Will Come

Credit union credit card mavens dish at Card Forum 2018.

 
 

If you build it will they come?

Yes, if you did your homework.

If not, expect your new credit card product to be one of the 80% to 90% of new products that fail, warned Michelle Goeppner, director of credit product strategy at Alliant Credit Union ($9.7B, Chicago, IL) during a Card Forum 2018 session.

Goeppner cited the book Competing Against Luck by Harvard Business School professor Clayton Christensen for that statistic and credited a lack of independent, unbiased research into the product and the target market as two major reasons for the failure. She even offered two memorable examples in Crystal Pepsi and Google Glass.

 

 

“These were not positive disruptions,”  Goeppner told the audience of the credit union track at Card Forum 2018 taking place this week at the InterContinental Miami. “They didn’t meet expectations and they were putting products at the center rather than the user.”

The Alliant strategist advised attendees to ask members what they want, as her Chicago credit union did. When Alliant asked members why they weren’t using a certain card, the credit union received an unexpectedly large response — mostly about insufficient rewards — that helped inspire the creation of a new card that has won awards as well as usage.

The card provides 3.0% back the first year and 2.5% thereafter, with no caps or categories. There’s a $59 annual fee and now that the first year of signups are coming around, there’s been very little pushback over what Goeppner acknowledged is supposed to be “a cardinal sin.” 

She said a few members have tried to get the fee reversed but Alliant is holding firm. The fee is less than most competitors charge and it is easily covered by the rewards. Plus, it’s easy to use.

“Identify pain points and the jobs to be done,” Goeppner said. ““If you build it right, they will come.”

Learn more about the award-winning rewards programs of Alliant and Navy FCU in "3 Lessons From Top Credit Card Rewards Programs."

That’s also been the case at the world’s largest member-owned financial cooperative. Navy Federal Credit Union ($90.6B, Vienna, VA) targets its members with rewards that focus on gas and groceries.

“These are not Chase Sapphire card users,” senior vice president of credit cards and education lending Annie Sebastian said during a panel discussion earlier Monday.

She said her big shop knows that interest rates and rewards points are both important to attracting and keeping business. Another tactic that worked was cutting the interest rate on its Platinum card by 100 basis points. The increased spend more than made up the difference.

And, surprisingly, despite having one of the more mobile consumer bases in the financial services industry, mobile doesn’t matter that much. Sebastian said that less than 1% of Navy Federal’s credit card spend occurs through Apple Pay, Samsung Pay, and Google Pay.

She said that might change as time goes on, but that ease of use continues to be an issue. “They keep changing the form factor. People don’t know what they’re going to get when they walk up to a register,” Sebastian observed.

Also from Card Forum 2018: "People Helping People Need Data."

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