Loyalty Truth

I’ve always admired great writers and Rick Ferguson, the Editorial Director of COLLOQUY, is on my list of the best.

I had the opportunity to co-author an article for COLLOUQY with Rick on the changing nature of card rewards programs in this challenging economic environment. If you would like to have a quick read, it is available via download from COLLOQUY or the Resource Section of Hanifin Loyalty.

Rick has followed up on the topic with a clever take on what credit and debit card issuers should be considering as they balance the current profitability of their card portfolios with the needs of the majority of their most loyal customers. The Rewards Cardholders’ Bill of Rights is worth reading, especially in light of the volume of negative press about how card issuers are handlling the transition in prepartion for enactment of the Credit Card Act of 2009.

Rick’s Bill of Rights is on target and some points he makes should apply to the broader market:

• The “fundamental right to privacy and data protection” affects all loyalty program sponsors. The responsibility to use data with integrity is inherent on the sponsor. The absolute need to protect it from prying eyes is a heightened priority that affects any consumer facing company with sensitive data on file. The moment consumers lost trust in data protection standards will be the time at which the data faucet begins to shut down.
• Transparency in communications of program rules will engender loyalty. There is still too much fine print associated with this industry in particular and marketing in general. Live by the Loyalty Asterisk™ and you may perish by the same.
• The “right to good customer service” does seem fundamental. As loyalty is increasingly defined by the aggregate of CVP (consumer value proposition) and the customer experience, organizations will be judged on the perceived level of recognition as articulated by the customer service experience. Invest in associate training now.

Maybe the comment in Rick’s Bill of Rights that sent chills up my spine was highlighting of the “love-hate” relationship that exists between card issuer and cardholder. He quoted a Creditcards.com survey that said:

• “82% of Americans believe that credit cards provide a valuable service”, while
• “73% believe the government should regulate the credit card industry more closely”

Every credit card marketer and payments executive needs to push back just a little on the risk managers. One day the economy will be a little brighter and it will be at that time when consumers begin to hold more power. Card issuers should protect themselves for today while planning for tomorrow.

Read the Bill of Rights and let me know what you think.