Chang Hwee’s Blog

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Understanding our customers

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Like any other businesses, one of the many challenges a marketeer would face is stimulating constant usage of their product or services. So, how does a marketeer plan to ensure its credit card customers continue to use its card rather than other brands?

We have to understand the credit card psychology of consumer spending;

  1. Consumers tend to overspend on credit cards because it’s so convenient to use and they don’t see the money spent until it goes away.
  2. When it comes making purchasing decision, important factors to consider are a) the need to purchase b) the benefits of the need c) the price

From a product perspective, the credit card has tackled Point 1 but the purchasing decision (i.e Point 2) remains unsolved and this is where the ingenuity of a marketeer comes in. Let’s explore the purchasing decision factors further

The Need
This is the starting point of making a purchasing decision. What creates the need to purchase? This is where we have to understand the profile of the customers that we want to talk to. One key trigger is major life events. To a average human being, our major life events are graduating, getting a job, starting a business, getting married, owning an asset, health, etc etc.

Let’s take owning an asset as an example which is purchasing a property and we are targeting customers who have just bought a property and are moving in or just moved in. As new home owners, we tend to want to make our home as beautiful and comfortable as we can. And this requires renovation and buying household items. Buying household items is something a marketeer can relate to the usage of credit cards.

Next step is to work with as many household merchants/partners to help design an attractive discount program for this customer group. Once the program is established, we can then proceed to communicate with these customers and thus, creating a need for purchase with their preferred credit card.

The Benefits

Now that they have a need and we have convince them to use our cards by offering a selection of attractive discounts, the next step is to persuade them further to spend more. There are many ways to do it;

  1. Extraordinary discount rates. This is the ultimate killer but the degree of difficulty is high. If you choose this path, think about how to convince your merchant/partners to willingly give such discounts.
  2. Sense of urgency which can be done by placing expiry date on your promotions.
  3. The “Buy More Get More” syndrome. The key point here is to reward customers who spend more with a low value but highly perceived product or services. Cash vouchers is a no-no. Reward points can be considered.

All these points will unconsiciously explain to the customers on why they should spend using your card and not everyone else. Improve on these points to strengthen your marketing program’s value proposition.

The Price

This is the most sensitive reason of all. Price. From where we stand as marketeers, we want to do as little possible on pricing but focus more on creativity and innovation on ways to create benefits or values for our customers. That’s the sole purpose of our existence.

So, when it comes to price,don’t fret too much about it because there’s nothing much we want to do and if we do get an attractive pricing, it’s a bonus rather than marketing skills.


Identifying the need of our customers is vital to kickstart a successful usage program and creating its benefits is vital in determining successful results of the usage program. Without a clear direction on these points, it may not be viable to conceive a usage program at all.

Therefore, in our example of targeting customers who are new home owners, what we should do is;

  • Work with household appliances/furniture brands like IKEA,MACY and your major local stores.
  • Negotiate for a good offer
  • Choose the communication medium. Direct mailing and e-marketing would be ideal.
  • Communicate the benefits by expressing the offer value and creating sense of urgency
  • It must be value led, not price led.
  • Finally, track the results

Written by changhwee

January 14, 2009 at 7:25 am

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