Should a financial institution’s credit card portfolio slip into a status quo position, often the best way to initiate change is to engage an outside perspective. SAC Federal Credit Union did just that when it found itself managing a credit card program that had been virtually untouched for seven years. TMG and its SmartGrowth™ team of portfolio strategy experts were the resources SAC needed to review its credit card program and reveal opportunities for achieving the cooperative’s growth goals.
Upon completing a portfolio review, financial institutions would do well to consider developing their strategic next steps based on the five categories of the cardholder lifecycle. Those categories consist of:
- Product – Cards teams should design a compelling product that takes into account the features, terms and conditions offered by those issuers going after the same segment(s) of consumers.
- Account Generation – Choose the best channels to drum up new business.
- Activation/Usage – Card activation typically occurs within the first 60 days of a new account, as does the best chance of earning top-of-wallet status.
- Account Management – The goal in this stage should be to stimulate purchase activity and balance growth.
- Service – Cards teams can’t overlook the importance of consistent and friendly cardholder service.
Upon receiving the results of its portfolio review from TMG, SAC developed a five-pronged plan to execute the recommendations. Each piece of the plan included strategies for optimizing the consumer experience. Executing simple initiatives like revising its pre-approval criteria, deploying an annual re-activation campaign and empowering cardholder service personnel to make in-the-moment decisions helped SAC move the needle on its card portfolio. With TMG’s SmartGrowth team, SAC experienced 75 percent portfolio growth and nearly quadrupled penetration.
