Credit Card Portfolio Services

What happens when our credit card portfolio services provide only the highest card member satisfaction?  Nothing but good things.  For example, when we have better service levels and remember we are in the “Yes We Can” business, our card members become and remain more loyal to our enterprises.

What can that mean?  It can mean lower card member attrition and higher active rates and higher credit utilization rates.  All of these translate into higher ROA/ROE.  It is always less expensive to do right by our card members and provide a highly satisfying set of experiences than it is to find and approve a new card account.  We should test for this satisfaction index by online surveys, polling and focus groups. What’s a good response rate for these card member satisfaction testing tools?  Remember, though, on the front end of the consumer credit life-cycle process:

Only about 0.25% – 0.50% (on a good day) of new card applicant solicitations result in a completed application; pretty dismal by historic card industry standards…  

Back to surveys.  We once sent out a card member feedback survey, randomly sampled from our portfolio, and got a 45% response rate.  We sent those surveys to a subset of card members who had any direct communication with us in the past 30 days (customer service, collections, fraud, etc.); to make sure we were doing right by them, treating them with respect, and giving the best credit card portfolio services level possible.  What we learned from their responses in this survey and other sentiment testing tools was then put into action in our business model going forward.  Nice results, so we thought at the time.

The second example of customer satisfaction testing comes to us from another industry with and even better feedback response rate.  There is a local grocery chain we routinely shop at. Their parent company asks every customer at check out to complete an online survey, with the simple instructions how to do so on every sales slip.  Next, every time you check out, all of the checkers at this store personally ask their customers to complete the online form telling them how they are doing, and circles the simple store feedback process on your sales slip. In addition there is a drawing from among the customers who complete the 5-minute online survey, and the monthly winner receives a cash reward.  So, they are doing at least three things to call you to action.   Pretty savvy.

Credit Card Portfolio Services Results

The results: last month this particular store received positive survey feedback from 90% of their customers.

The lesson for us in the credit card portfolio services business is very important.  First, they actively seek the customer’s feedback, not just buried in the fine print on their transaction slips. Next, they take action on what the customer is saying (read, adjust their business model as needed, in the customer’s eyes).  Then, they reward the customer with only the highest service levels, in every department.  Moreover, they do all this every day with every customer.  That’s a true “commitment to excellence” (importantly, defined by their customers).

Contrast that with our experience at other local markets, who all also have sales slip information for online surveys.  Not one other store in our area actively seeks the shopper’s feedback.  That, as opposed to the local market described above with stellar results; never once have their checkers failed to ask us to complete the survey.  Never once.  It’s the polar opposite of every other market in town.  No surprise that this enterprise is always #1 in their market area, and in their loyal customers’ eyes.

Check Your Own Card Member Sentiment Feedback Process

So, if you think your card member feedback produces impressive results, good for you. Your P/L earnings probably reflect that. For a suggestion on how to improve no matter how high a result you may presently get:  I would put two of the newest MBA ”fast track” employees on the case and have them develop a higher responding online card member feedback tool we can use to see how we are doing.

Why someone new to the company?  Because they just don’t yet know what can’t be done; they come to work every day “thinking outside the proverbial box they have yet to get to know.”

I’d give them (and their assigned mentor in the company) the authority to talk to anyone in any department of the company whose works touches card members directly, and give them 60 days to come up with a better feedback plan of action for us to pursue, presented to the Managing Committee, with weekly progress reports during the two month project to their mentor.

This is a pretty fair new employee training tool, as well, to familiarize them with the various operations in our card company.  See of it might produce better results for you, too.  Any other ideas out there?

Bob Hammer is Founder and CEO of R.K. Hammer and Card Knowledge Factory®