Invisible Brand

As a forty-year growth market is rapidly approaching maturity, Sean Ingram – Deputy Chairman of cchm:ping – asks whether today's credit card marketers regard growth as the natural state of things? How well are they prepared for tougher times? Have they used brand to give themselves an enduring compe

Most financial transactions are clandestine. As other taboos have fallen away, we are still more likely to discuss vasectomy or hysterectomy than our funds portfolio or our pension provision. Yet the credit card remains the exception – as evidenced by its use, full frontal, in supermarkets, shops and restaurants daily throughout the land. Have marketers taken full advantage of this visibility to flaunt and develop distinctive brands?

In the broadest terms, the answer is ‘no’. Credit Card providers have had it good and, in their ambition to optimise margin, this prolonged ‘purple patch’ may have left them a little short sighted. You can tell card providers don’t hold much truck with the science of economics. They have constantly violated Gresham’s Law, which states that Bad Money Drives Out Good. Or to put it more prosaically, most serious attempts at brand building have been derailed by me-too cut-throat promotional strategies that have commoditised the products and undermined their values.

Brand vacuum?
In ownership and transactions, credit cards are one of capitalism’s great triumphs. There are more cards than people in the UK: two thirds of the population has one or more and we can choose from hundreds of alternatives. As a category, they’re classless. Advertising spend on the leading cards is around £250m. There are many household names among them, but are they brands? When we take them out of our purse or wallet are we pleased, even proud, to show that our credit is good with this prestigious, blue-chip institution; or that the curved cut-off corner proves to our peer group that we are hip?

So if cards are, to some extent, a classless commodity, can brands have a role? American Express is the world’s leading financial services brand. Its initial positioning as the upmarket international traveller’s charge card served it well for several decades. As the market grew, the company expanded beyond the niche it dominated, to embrace credit cards for the young spender. It has retained a prestige which enables the company to charge merchants a higher rate than any other card.

A break-through brand
However, it took the alliance of an American-owned bank, HFC, and British Gas to show the industry how to create a new brand from scratch. Just two years after its launch, only American Express and Barclaycard scored higher awareness than Goldfish. Within four years it had become the seventh largest card with over one million cardholders.

What did they do that was different? They recognised the unusual visibility of cards and hired Wolff Olins to break the mould. Can you imagine the meeting at which the designers suggested that the brand values might best be symbolised by a fish? Wolff Olins explained their choice in terms of ‘colour in a grey world,’ an observation which has valuable lessons for the wider financial services community.

In hindsight it can be seen as building on the success of Orange and as a forerunner of those cheeky, irreverent e-brands. The timing was perfect. When customers were ready for a second card or an alternative to their bank or building society card, here was one that promised to be different. It had something positive to say about the cardholder – that you had broken away from Mum or Dad’s bank. PwC has described the prime target group as ‘Savvy’ – young, affluent professionals; independently minded.

Hesitant progress
Branding has been put into play in other ways in the cards market – most conspicuously through affinity cards which tend to promote personal allegiances rather than the card provider: “I’m a Man U supporter”; or which make a statement about the holder’s personal values: “I look after Oxfam every time I use my card”.

A number of attempts have been made to create card brands that, like Goldfish, offer lifestyle commentaries about their holders. The biggest obstacle they have encountered is the incompatibility of a ‘cool’ image with the necessity to shout a good story about rates and discounts, factors that are undeniably important to the younger audiences targeted.

All that glisters
What about the colour of the card? Does this in some way help to define the brand promise?

At the premium end of the market, colour still matters, although it has undeniably lost its shine: “First there was gold, then there was platinum, then there was black”. Datamonitor’s recent report ‘Lessons from US Credit Card Issuers’ might equally have been entitled ‘How to create a commodity market.’ In the States, the remorseless Weimar-style inflation continues. For the latest metal to be forged in the white heat of the card market the issuers have gone to NASA and the tennis and golf club manufacturers. Titanium is the new platinum.

Me-tooism can harm even inspired marketing. American Express Centurion deserves to be a case study. The product was innovative, the company wasn’t ashamed to charge a super-premium price, the launch package (with which this agency was associated) impressive. When the Sultan of Brunei sends his pilot and private plane half way round the world to pick up his new card, you know the launch has been a success.

It was a measure of the lead stolen by American Express that it was three years before the new black currency came under pressure. But the imitators won’t be put off for ever. Reporting in 2002 on the launch of copycat black cards, Precision Marketing concluded, “The key factor is whether this new wave of high street black cards represents enough of an alternative to the numerous devalued platinum and vanilla gold offerings to justify their existence. If not, in four years’ time we could all be wondering what the new black is.

Ahead of time perhaps, we can say that the new black is purple. Coutts World is an invitation-only super-premium card. British menswear designer Ozwald Boateng has chosen purple to “communicate a new modernity and supreme elegance.”

Coming of age
Perhaps now is the time for the credit card business and its agencies to become more serious about the different roles brand can play when segmenting and targeting new audiences in this still fast-growing but now hyper-competitive market.

Thomas Gresham, the merchant and banker, would have regarded the first forty years of the credit card as “easy money.” Now the tougher times are with us. There are hundreds if not thousands of card options in the UK alone – market saturation by any other name, yet still ripe with possibility when you consider the inroads possible on some of the largest, longest-standing market shares. But as PwC notes: “Anyone can win market share, but generating value for shareholders is more difficult.”

Lateral thinking is now the name of the game. The successful marketers will be those who use brand and targeting to achieve their goals, and trade in their matchlock musket for the rifle.

We look forward to more science on the cards in the next forty years. a solid return on their database investment.