Synovate's Mail Monitor® reports record 1.4 billion offers fueled by rewards and rebates
14 July 2005
CHICAGO, IL — The 1.4 billion credit card offers mailed in the 1st quarter of 2005 is the largest quarter in history according to Mail Monitor®, the direct mail offer tracking service from Synovate. This represents an 11% increase from this time last year, which was a record breaking year. The record high mailings coincide with increasing promotions of bankcards with issuer proprietary reward and rebate programs, which made up 27% of all bankcard mailings in the quarter, up from 16% in the prior year.
Issuer proprietary reward and rebate programs are developed by the card issuer and are not affiliated or co-branded with another company or organization. American Express and Discover have offered proprietary reward and rebate programs for years and have historically accounted for the majority of offers for such programs.
"In the past year we have seen some incredible changes in the issuer proprietary reward/rebate offers," said Brent Stratford, Vice President of Competitive Tracking Services for Synovate's Financial Services Practice. According to Mail Monitor® the 1st quarter of 2005 was the first time more offers mailed for bankcard proprietary reward and rebate programs than either co-branded reward programs or non-bank card programs such as American Express and Discover. "Proprietary programs tend to offer consumers with more choice," said Stratford, "because card holders can use their points for different travel options or just on merchandise, or sometimes cash back, rather than being tied to a particular airline."
Not only are offers for bankcard proprietary reward and rebate cards increasing, they are also becoming more competitively priced. In the 1st quarter 2005 43% of these cards offered a low introductory APR, usually 0.0%, up from 21% the previous year.
With the record high mail volumes, the response rate to credit card offers also reached a record low of 0.4 percent. "As the mailbox of U.S. households become more cluttered with credit card offers the response rate continues to drop", said Stratford. "As the competition to cut through the clutter continues the consumers will be able to choose from a wide range of reward and rebate programs at very attractive prices," Stratford added.
"The data seem to indicate that issuers are looking to recover their card holder acquisition costs quicker", said Stratford. According to Inside Track®, the credit card owner behavior and communication tracking service from Synovate, reward card holders spent more than twice as much as non-reward card holders in the first quarter. "The spending behavior on reward and rebate cards make those consumers more attractive to issuers," Stratford added.
About Mail Monitor®
Mail Monitor® is part of Synovate's Financial Services Practice which provides marketing research, competitive intelligence and consulting services to the banking and payments industries. More information on Synovate can be found at www.synovate.com.
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Contact(s) for this press release
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Brent Stratford
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222 South Riverside Plaza |
Telephone: +1 914-332-5300 |
Synovate, the market research arm of Aegis Group plc, generates consumer insights that drive competitive marketing solutions. The network provides clients with cohesive global support and a comprehensive suite of research solutions. Synovate employs over 6,000 staff across 62 countries.
For more information on Synovate visit www.synovate.com.