Bill Hanifin
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In a word association game where the question is “bank loyalty”, the answer has to be “card rewards”. Co-branded credit cards with rewards are the staple of the credit card industry joined by brands own by the banks themselves (Citi ThankYou, Chase Freedom, Capital One No Hassle Rewards, Discover Cash Back are just a few examples).
Rewards on debit cards on the other hand have had a tortured history and after 2-3 distinct lifecycles, were proclaimed “dead” by most industry pundits following passage of the Durbin Amendment two years ago. While credit cards have multiple revenue streams through which to support the rewards budget (interchange, fees, interest on revolving debt), the debit card had only the first two and interchange rates were drastically slashed (in the range of 75%) at the hands of the Durbin Amendment.
In this bleak landscape, the revitalization of the Delta SkyMiles World Check Card turns heads. At its launch in 2009, the card was remarkable as the first and, at that time, only debit card to award airline miles. Not only did the offer go against the grain of the “merchant funded” trend driving most debit card rewards programs, but the reward offered was the most expensive of all that could be collected – the airline mile.
The Delta Debit Card (as it is marketed by the airline) was relaunched over the past month or so and the benefits of the card are significant.
The key to the relaunch is the participation of SunTrust, which is positioning the card as the trigger to acquire new deposit account relationships for the bank. There are conditions for customers to become eligible for this card and new customers must select from one of several premium checking packages including Balanced Banking, SunTrust Solid Choice Banking, or Signature Advantage Banking. The idea is right here and SunTrust should be given high praise for recognizing that we live in an age where most of the population is carded and consumers have an abundance of choice in the market. The cost of switching banks is high as people must unwind payroll deposits, pre-authorized debits, and overdraft protection services to move between banks. The banks have done a good job creating high switching cost and consumers must have a strong reason to make a change.
For the right customer, the Delta SkyMiles World Check Card would represent reason enough to consider switching banks. One impediment to making the switch is the fuzzy description of checking accounts available to qualify for the card on the SunTrust website. When I dug in to the SunTrust site and read the description of each product, there appeared to be a suite of three packages with graduated benefits. From my reading, I learned that Balanced Banking was “especially created to help you better manage your money”, that Solid Choice Banking offers “even more time and cost-saving features than a basic solution”, and that Signature Advantage Banking is “ideal for clients who have a relationship with SunTrust and want to take advantage of all our services”.
I had planned to write about the differences between the packages and wanted to highlight minimum balance requirements to show how SunTrust was creating significant and valuable consumer deposit relationships with this Delta Debit Card as a teaser, but gave up as I could not find the information I was looking for on the site. Maybe its just a matter of needing more precise copywriting on the site, but somewhere there should be a comparative grid that makes it easy for consumers to identify themselves in an individual product. This is an example of a Loyalty Asterisk which SunTrust should address.
The Delta / SunTrust relationship has produced a creative offer for consumers that stands above other debit card rewards loyalty programs, and should serve as an effective acquisition tool for deposit accounts. Most importantly, the card and its FFP (frequent flyer) value proposition is positioned as the cornerstone of a bank relationship, not just another plastic card beckoning consumers with rewards. With a little punch-up of copy on the SunTrust website, scores of consumers may find it easier than ever to switch banks in the near future.
