Credit Card Customer Satisfaction: Effective Acquisition and Retention Strategy Must Focus on Multiple Facets of the Relationship

Published by: Javelin Strategy & Research

Published: Jul. 1, 2008 - 47 Pages

Table of Contents

Overview

Primary Questions

Findings and Analysis

Methodology

Executive Summary

Top Issuers Demonstrate Strong Cardholder Satisfaction Rates

Relative Satisfaction for Certain Features Varies by Demographic and by Issuer

Protection Against Identity Fraud: Perception versus Reality

Importance of Security by Generation Emerges as Key Differentiator

Address Gaps between Importance of Security and Satisfaction Levels Directly

As Fear of Data Breaches Rise, Security at Purchase Increases in Importance

Boomers More Concerned with Protection at the Point of Sale

Gaps in Security Satisfaction on an Issuer-by-Issuer Basis

Online Features Drive Retention and Efficiency in the Cardholder Relationship

Consumer Satisfaction with Online Features Levels Exceed Expectations

Online Features Not Critical Differentiator in an Acquisition Strategy

Online Features Factor into Card Choice at the Point of Transaction for Gen Y

Customer Service: Consumers Depend on Issuers to Fix their Problems

American Express Cardholder Satisfaction Exceeds Importance

Customer Service by Generation: Valued More by Baby Boomers

Customer Service Satisfaction Trails among Younger Generations

Grace Period as a Differentiator: Potential for Top-of-Wallet Card Creation

Some Consumers Rate Grace Period Important when Selecting Issuer

Leverage Grace Period Satisfaction and Importance Equivalence to Structure Offerings

Cardholder Satisfaction with Grace Period by Major Issuer Exceeds Importance

Rewards: Focus on “Dissatisfaction” Leads to Acquisition Opportunities

Surprisingly, Importance of Rewards in Issuer Selection Less Important Overall

Affluent Consumers Show Extreme Preference for Rewards as Top-of-Wallet Feature

Satisfaction with Rewards Corresponds with Importance by Income Group

Rewards Dissatisfaction among One of Four Leaves Door Open for Competitors

Demographic Breakdown of Satisfaction Levels for Various Features

How Do Rewards Compare with Other Desired Features in Choosing an Issuer?

Baby Boomers Value Security and Service

Gen X - Security, Interest Rates and Service

Gen Y - Interest Rates, Security, Service, and Rewards

Interest Rates Resonate for all Decisions—Issuer and Purchase Alike

Some Cardholders Dissatisfied by Interest Rates

Appendices: Additional Consumer Data and Data Cuts

Preferred Features for Card Usage Differ Slightly: Different Acquisition and Usage Generation Strategies

Must Be Employed

Different Card Portfolios Reflect Rewards Importance

Issuers’ Rewards Cards Range from 40% to 90% of Base - According to Cardholders

Most Consumers Earn Rewards Points: Relatively Insignificant Generational Differences

American Express and Discover Cardholders Expect Specific Reward Types

Non-online Shoppers Skew Somewhat toward Cash Back Rewards

Non-online Shoppers Show Slightly Higher Satisfaction with Credit Card Rewards

Variation in Importance of Rewards on an Issuer-by-Issuer Basis

Online Features Satisfaction Steady among all Generations

Focus on Gap Between Satisfaction & Importance for Rewards Strategy

Related Research

Companies Mentioned

Table of Figures

Figure 1: Importance of Security in Choosing an Issuer by Generation

Figure 2: Security Satisfaction versus Importance by Generation

Figure 3: Security Importance at the Point of Transaction by Generation

Figure 4: Security Importance and Satisfaction Levels by Issuer

Figure 5: Online Features Importance and Satisfaction by Issuer

Figure 6: Online Features Issuer Importance by Generation

Figure 7: Online Feature Purchase Importance by Generation

Figure 8: Customer Service Importance and Satisfaction by Issuer

Figure 9: Customer Service Issuer Importance versus Satisfaction by Generation

Figure 10: Grace Period Issuer Importance by Generation

Figure 11: Grace Period Satisfaction versus Importance by Generation

Figure 12: Grace Period Importance and Satisfaction by Issuer

Figure 13: Rewards Issuer Importance by Generation

Figure 14: Rewards Importance at the Point of Transaction by Income

Figure 15: Rewards Satisfaction versus Importance by Income

Figure 16: Rewards Satisfaction by Generation

Figure 17: Important Features by Generation

Figure 18: Interest Rate Importance by Generation

Figure 19: Rewards Purchase Importance by Generation

Figure 20: Rewards Purchase Importance by Issuer

Figure 21: Rewards-earning Cardholders by Issuer

Figure 22: Rewards Types by Generation

Figure 23: Rewards Types by Issuer

Figure 24: Rewards Types by Online/Non-online Shoppers

Figure 25: Rewards Satisfaction by Online/Non-online Shoppers

Figure 26: Rewards Importance by Issuer

Figure 27: Online Features Satisfaction Levels by Generation

Figure 28: Rewards Satisfaction by Income

Abstract

• What card features resonate with cardholders in selecting an issuer?
• How can issuers alter acquisition strategy to more effectively cater to cardholder desires?
• What drives consumers to use a particular card for purchases?
• How can issuers retain existing cardholders based on various card features?
• How can issuers target cardholders for more effective and profitable relationships?

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