Magazine article American Banker

Issuers Eye More Profit from Their Best Cardholders

Magazine article American Banker

Issuers Eye More Profit from Their Best Cardholders

Article excerpt

Byline: Maria Aspan

Card issuers, which have spent the past several months tightening lending standards, are searching for ways to offset these pullbacks by making more money on their most creditworthy customers.

This week representatives from half a dozen major issuers filled a midtown Manhattan ballroom for a loyalty conference that promised strategies for banks to maintain and deepen their relationships with desirable cardholders.

"There's absolutely a shift in focus," Campbell Edlund, the conference chairwoman and the founder and president of EMI Strategic Marketing Inc., said Thursday. Instead of looking for ways to acquire new, and potentially risky, customers, "the issuers are very focused on retaining their good cardholders and maintaining their share of wallet, or growing it, as we go into 2009," she said.

Ms. Edlund said her firm, which designs marketing and loyalty strategies for issuers like Citigroup Inc. and Wachovia Corp., has seen its clients' interests shift from direct-mail to product cross-sales. "Overall, there is a downshift on acquisitions and an increased focus on retaining and selling more services to existing customers."

Almost 120 people attended the "Reinventing Loyalty" conference in New York on Monday - so many that organizers had to bring extra chairs into the room after a keynote address by R. Mark Ford, National City Corp.'s senior vice president of card products.

Mr. Ford suggested in his speech that more issuers need to develop rewards for revolving, but reliable, customers. Banks should reward customers for "paying on time, especially in this environment," he said.

In an interview after the speech, he said that such rewards would not conflict with issuers' tightening of credit standards. One possible type of reward would be a rebate for reliable customers who occasionally revolve but consistently pay more than the monthly minimum. …

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