Leveraging a Consumer Database in a Slumped Economy

As more Americans experience a loss of confidence in the economy, reduction in household wealth and shaky employment statuses, some credit card database managers claim their cardholders are keeping their credit in good standing.

In an economic slump, consumer-facing companies may be able to leverage the loyalty they’ve promoted and nurtured through rewards-program databases. It seems frequent, automated communications through database tools encourage responsibility from consumers who are familiar with the retailer. They may not generate many new sales, but the relationship may mean reliable revenue streams nonetheless.

“Co-branded credit cards have loss rates significantly lower than the industry average because people feel very good about those cards and maintain them in good standing,” said Steve Jacowitz, a director at Auriemma Consulting Group.

The Motiva database by Discover is one rewards database not built around a product marketer or retail brand. It is the only credit portfolio in the United States that offers its cardholders account savings for making minimum monthly payments. Perhaps that’s because cardholders in the Motiva portfolio tend to be those who want to keep on top of their finances and manage their credit better than the average American, said Julie Loeger, senior vice president of product management at Discover. They spend smarter, manage debt better and save more, she said.

Further, Discover cardholders are awarded an interest-free month if they have made regular minimum payments for the preceding six months. Through statement reminders about this award, Discover communicates with its database members…


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