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Loyalty Programs in Financial Services - US - November 2013

“Loyalty programs need to address consumers’ desire for financial security and fiscal responsibility that has continued since the financial crisis of 2008. Loyalty program providers need to think differently about what might appeal to the customer, and go beyond the traditional program features in order to differentiate themselves from their competitors.”

– Susan Menke, Senior Financial Services Analyst

This report looks at the following areas:

  • Regaining trust
  • Social media can be a blessing or a curse
  • Some of those with rewards cards need help managing their rewards
  • Deploy all marketing strategies that can continue to strengthen the relationship (ie, social and mobile)
  • There has been some activity in the white space – that place where gains can be made by differentiation

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Direct marketing creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                  • Companies mentioned in this report:
                    • Generations
                    • Executive Summary

                        • The market
                          • Competitive landscape
                            • Brand awareness and usage
                              • Figure 1: Brand usage and awareness of loyalty programs, September 2013
                            • Marketing strategies
                              • Figure 2: Key social media performance indicators, October 2013
                            • Consumers have passion for Chase and Amex
                              • Figure 3: Online mentions, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                            • The consumer
                              • Six in 10 are enrolled in a credit or debit card rewards program
                                • Figure 4: Type of credit and debit card loyalty program enrolled in, overall, September 2013
                                • Figure 5: Percent enrolled who accumulated rewards in past year, September 2013
                                • Figure 6: Percent enrolled who redeemed rewards in past year, by gender, September 2013
                              • Two in three are enrolled in other types of rewards programs, most likely grocery and drug store
                                • Figure 7: Other types of retail loyalty programs enrolled in, September 2013
                              • Cashback-only cards receive the highest satisfaction from users
                                • Figure 8: Satisfaction with financial rewards programs enrolled in, September 2013
                              • The best part of a rewards card is finding the one with highest percentage of cashback
                                • Figure 9: Most important features of a loyalty/rewards program, September 2013
                              • Because of rewards cards, consumers are shopping with different priorities in mind
                                  • Figure 10: Attitudes and behaviors regarding loyalty programs, by age and gender, September 2013
                                • What we think
                                • Issues and Insights

                                    • Regaining trust
                                      • The issues
                                        • The implications
                                          • Social media can be a blessing or a curse
                                            • The issues
                                              • The implications
                                                • Some of those with rewards cards need help managing their rewards
                                                  • The issues
                                                    • The implications
                                                      • The issues
                                                        • The implications
                                                          • Deploy all marketing strategies that can continue to strengthen the relationship (ie, social and mobile)
                                                            • There has been some activity in the white space – that place where gains can be made by differentiation
                                                            • Trend Application

                                                                • Trend: FSTR HYPR
                                                                  • What’s it about?
                                                                    • What we've seen
                                                                      • Market application
                                                                        • Trend: Many Mes
                                                                          • What's it about?
                                                                            • What we've seen
                                                                              • Market application
                                                                                • Mintel Futures: Access Anything, Anywhere
                                                                                  • What it’s about
                                                                                    • What we’ve seen
                                                                                      • Market application
                                                                                      • Market Size

                                                                                        • Key points
                                                                                          • Very slight improvement in consumer credit outstandings
                                                                                            • Figure 11: Revolving consumer credit outstanding, 2008-12
                                                                                            • Figure 12: Major types of revolving credit outstanding, by holder, 2010-12
                                                                                        • Market Drivers

                                                                                          • Key points
                                                                                            • Figure 13: Unemployment and underemployment rates, January 2008 to September 2013
                                                                                          • Incomes down from prerecession levels
                                                                                            • Figure 14: Median household income, 2007, 2011 and 2012
                                                                                          • The shape of household debt has changed
                                                                                            • Figure 15: Total household consumer debt (excluding housing), Jan. 1, 2000 - Sept. 1, 2013
                                                                                            • Figure 16: Average credit card borrower debt, Q1 2008-Q2 2013
                                                                                        • Competitive Context

                                                                                          • Key points
                                                                                            • Outstandings in decline for three largest issuers
                                                                                              • Figure 17: Credit card outstandings at top issuers, 2010-12
                                                                                          • Leading Companies

                                                                                            • Key points
                                                                                              • Chase leading bank, followed by BofA
                                                                                                • Figure 18: Revenues and profits of leading commercial banks, 2010 and 2012
                                                                                                • Figure 19: Credit card revenues at large banks, 2010-2012
                                                                                              • JPMorgan Chase
                                                                                                • Bank of America
                                                                                                  • Discover Card
                                                                                                    • Capital One
                                                                                                      • Citi
                                                                                                        • American Express
                                                                                                        • Innovations and Innovators

                                                                                                          • Key points
                                                                                                            • American Express rewards points in NYC Taxis
                                                                                                              • Discover Card cashback for holiday spending
                                                                                                                • Capital One Rewards Card co-branded with GM
                                                                                                                  • Capital One Quicksilver Rewards Card
                                                                                                                    • Bank of America’s MyCruise Rewards Card
                                                                                                                      • Bank of America and Virgin Airlines Elite Card
                                                                                                                        • Chase Sapphire Rewards at Sundance Film Festival
                                                                                                                          • Chase launch of AARP Cashback Rewards Card
                                                                                                                            • Morgan Stanley Amex cards
                                                                                                                            • Marketing Strategies

                                                                                                                              • Key points
                                                                                                                                • Overview of the brand landscape
                                                                                                                                  • Online initiatives
                                                                                                                                    • Citibank
                                                                                                                                      • Figure 20: Citibank website homepage, November 2013
                                                                                                                                    • Bank of America
                                                                                                                                      • Figure 21: Bank of America website homepage, November 2013
                                                                                                                                    • Chase
                                                                                                                                      • Figure 22: JPMorgan chase website homepage, November 2013
                                                                                                                                    • Wells Fargo
                                                                                                                                      • Figure 23: Wells Fargo website, November 2013
                                                                                                                                    • Capital One
                                                                                                                                      • Figure 24: Capital One Venture card webpage, November 2013
                                                                                                                                    • Discover Card
                                                                                                                                      • Figure 25: Discover card website, November 2013
                                                                                                                                    • American Express
                                                                                                                                      • Figure 26: American Express website, November, 2013
                                                                                                                                    • Credit card loyalty rewards programs
                                                                                                                                      • Online banner ads
                                                                                                                                        • Figure 27: Citi Thank You Preferred card online ad, 2013
                                                                                                                                        • Figure 28: Capital One Venture card online ad, 2013
                                                                                                                                        • Figure 29: Chase Visa Signature card online ad, 2013
                                                                                                                                        • Figure 30: Chase Sapphire Preferred credit card, online ad, 2013
                                                                                                                                        • Figure 31: Fidelity Rewards American Express card, online ad, 2013
                                                                                                                                        • Figure 32: Discover card, online ad, 2013
                                                                                                                                        • Figure 33: BankAmericard Travel Rewards credit card, online ad, 2013
                                                                                                                                        • Figure 34: American Express Serve card online ad, 2013
                                                                                                                                        • Figure 35: American Express Platinum Edge credit card, online ad, 2013
                                                                                                                                      • Direct mail and email ads
                                                                                                                                        • Figure 36: Wells Fargo Rewards credit card, email ad, 2013
                                                                                                                                        • Figure 37: American Express Blue Sky credit card, email ad, 2013
                                                                                                                                        • Figure 38: Key Bank Rewards MasterCard, direct mail ad, 2013
                                                                                                                                        • Figure 39: Capital One Quicksilver credit card, direct mail ad, 2013
                                                                                                                                        • Figure 40: Bank Americard Better Balance Rewards MasterCard, direct mail ad, 2013
                                                                                                                                      • Debit Card Loyalty Rewards Programs
                                                                                                                                        • Figure 41: PNC Purchase Payback credit or debit card program, online ad, 2013
                                                                                                                                        • Figure 42: Delta SkyMiles check card from Sun Trust Bank, direct mail ad, 2013
                                                                                                                                        • Figure 43: Disney Visa debit card from Chase, direct mail ad, 2013
                                                                                                                                      • Television advertising
                                                                                                                                        • Capital One
                                                                                                                                          • Figure 44: Capital One Quicksilver card TV commercial, 2013
                                                                                                                                        • Citi
                                                                                                                                          • Figure 45: Citi ThankYou Preferred card – Lunch TV Commercial, 2013
                                                                                                                                          • Figure 46: Citi ThankYou Preferred card – Katy Perry TV Commercial, 2013
                                                                                                                                      • Loyalty Programs and Social Media

                                                                                                                                        • Key points
                                                                                                                                          • Key social media metrics
                                                                                                                                            • Figure 47: Key performance indicators, October 2013
                                                                                                                                          • Market overview
                                                                                                                                            • Brand usage and awareness
                                                                                                                                              • Figure 48: Brand usage and awareness of loyalty programs, September 2013
                                                                                                                                            • Interaction with brands
                                                                                                                                              • Figure 49: Interaction with loyalty programs, September 2013
                                                                                                                                            • Online conversations
                                                                                                                                              • Figure 50: Online mentions, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                            • Where are people talking about loyalty programs?
                                                                                                                                              • Figure 51: Mentions, by page type, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                            • What are people talking about online?
                                                                                                                                              • Figure 52: Selected American Express Twitter Mentions, October 29, 2013
                                                                                                                                              • Figure 53: Mentions, by type of conversation, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                            • Brand analysis
                                                                                                                                              • Chase
                                                                                                                                                • Figure 54: Chase key social media indicators, October 2013
                                                                                                                                              • Key online campaigns
                                                                                                                                                • What we think
                                                                                                                                                  • American Express
                                                                                                                                                    • Figure 55: American Express key social media indicators, October 2013
                                                                                                                                                  • Key online campaigns
                                                                                                                                                    • What we think
                                                                                                                                                      • Citibank
                                                                                                                                                        • Figure 56: Citibank key social media indicators, October 2013
                                                                                                                                                      • Key online campaigns
                                                                                                                                                        • What we think
                                                                                                                                                          • Bank of America
                                                                                                                                                            • Figure 57: Bank of America key social media indicators, October 2013
                                                                                                                                                          • Key online campaigns
                                                                                                                                                            • What we think
                                                                                                                                                              • Capital One
                                                                                                                                                                • Figure 58: Capital One key social media indicators, October 2013
                                                                                                                                                              • Key online campaigns
                                                                                                                                                                • What we think
                                                                                                                                                                • Consumer Usage of Card Rewards Programs

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Enrollment in credit card and debit card loyalty programs
                                                                                                                                                                        • Figure 59: Enrollment in credit and debit card loyalty programs, September 2013
                                                                                                                                                                        • Figure 60: Types of credit and debit card loyalty programs enrolled in, by gender, September 2013
                                                                                                                                                                        • Figure 61: Types of credit and debit card loyalty programs enrolled in, by age, September 2013
                                                                                                                                                                        • Figure 62: Types of credit and debit card loyalty programs enrolled, by age by gender, September 2013
                                                                                                                                                                        • Figure 63: Credit card and debit card loyalty programs enrolled in, by household income, September 2013
                                                                                                                                                                      • Credit/debit rewards accumulation
                                                                                                                                                                        • Figure 64: Percent enrolled who accumulated rewards in past year, September 2013
                                                                                                                                                                        • Figure 65: Percent enrolled who accumulated rewards in past year, by gender, September 2013
                                                                                                                                                                        • Figure 66: Percent enrolled who accumulated rewards in past year, by age, September 2013
                                                                                                                                                                        • Figure 67: Percent enrolled who accumulated rewards in past year, by age by gender, September 2013
                                                                                                                                                                        • Figure 68: Percent enrolled who accumulated rewards in past year, by household income, September 2013
                                                                                                                                                                      • Redemption of credit and debit card loyalty rewards
                                                                                                                                                                        • Figure 69: Percent enrolled who redeemed rewards in past year, by gender, September 2013
                                                                                                                                                                        • Figure 70: Percent enrolled who redeemed rewards in past year, by gender, September 2013
                                                                                                                                                                        • Figure 71: Percent enrolled who redeemed rewards in past year, by age, September 2013
                                                                                                                                                                        • Figure 72: Percent enrolled who redeemed rewards in past year, by age by gender, September 2013
                                                                                                                                                                        • Figure 73: Percent enrolled who redeemed rewards in past year, by household income, September 2013
                                                                                                                                                                    • Other Loyalty Rewards Programs

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Enrollment in other retail loyalty rewards programs
                                                                                                                                                                          • Figure 74: Other retail and bank/credit union loyalty programs enrolled in, September 2013
                                                                                                                                                                          • Figure 75: Other retail and bank/credit union loyalty programs enrolled in, by gender, September 2013
                                                                                                                                                                          • Figure 76: Other retail and bank/credit union loyalty programs enrolled in, by age, September 2013
                                                                                                                                                                          • Figure 77: Other retail and bank/credit union loyalty programs enrolled in, by age by gender, September 2013
                                                                                                                                                                          • Figure 78: Other retail and bank/credit union loyalty programs enrolled in, by household income, September 2013
                                                                                                                                                                        • Rewards accumulated in the past year
                                                                                                                                                                          • Figure 79: Percent enrolled who accumulated rewards in past year, September 2013
                                                                                                                                                                        • Other types of programs – accumulated rewards
                                                                                                                                                                          • Figure 80: Percent enrolled who accumulated rewards in past year, by gender, September 2013
                                                                                                                                                                          • Figure 81: Percent enrolled who accumulated rewards in past year, by age, September 2013
                                                                                                                                                                          • Figure 82: Percent enrolled who accumulated rewards in past year, by age by gender, September 2013
                                                                                                                                                                          • Figure 83: Percent enrolled who accumulated rewards in past year, by household income, September 2013
                                                                                                                                                                        • Rewards redemption
                                                                                                                                                                          • Figure 84: Percent enrolled in loyalty programs who redeemed rewards in past year, by gender, September 2013
                                                                                                                                                                          • Figure 85: Percent enrolled who redeemed rewards in past year, by age, September 2013
                                                                                                                                                                          • Figure 86: Percent enrolled who redeemed rewards in past year, by age by gender, September 2013
                                                                                                                                                                          • Figure 87: Percent enrolled who redeemed rewards in past year, by household income, September 2013
                                                                                                                                                                      • Attitudes about Credit and Debit Card Loyalty Rewards Programs

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Satisfaction with credit/debit card programs
                                                                                                                                                                            • Figure 88: Satisfaction with financial rewards programs enrolled in, September 2013
                                                                                                                                                                            • Figure 89: Satisfaction with financial rewards programs enrolled in, by gender, September 2013
                                                                                                                                                                            • Figure 90: Satisfaction with financial rewards programs enrolled in, by age, September 2013
                                                                                                                                                                            • Figure 91: Satisfaction with financial rewards programs enrolled in, by age by gender, September 2013
                                                                                                                                                                            • Figure 92: Satisfaction with financial rewards programs enrolled in, by household income, September 2013
                                                                                                                                                                          • Most important program features
                                                                                                                                                                            • Figure 93: Most important features of a loyalty/rewards program, by gender, September 2013
                                                                                                                                                                            • Figure 94: Most important features of a loyalty/rewards program, by age, September 2013
                                                                                                                                                                            • Figure 95: Most important features of a loyalty/rewards program, by age by gender, September 2013
                                                                                                                                                                            • Figure 96: Most important features of a loyalty/rewards program, by household income, September 2013
                                                                                                                                                                          • Usage behavior
                                                                                                                                                                            • Figure 97: Credit card loyalty program usage behavior, by gender, September 2013
                                                                                                                                                                            • Figure 98: Credit card loyalty program usage behavior, by age, September 2013
                                                                                                                                                                            • Figure 99: Credit card loyalty program behavior, by age by gender, September 2013
                                                                                                                                                                            • Figure 100: Credit card loyalty program usage behavior, by household income, September 2013
                                                                                                                                                                          • Paying bills with cards to earn rewards
                                                                                                                                                                            • Figure 101: Attitudes toward loyalty programs, by gender, September 2013
                                                                                                                                                                            • Figure 102: Attitudes toward loyalty programs, by age, September 2013
                                                                                                                                                                            • Figure 103: Attitudes toward loyalty programs, by age by gender, September 2013
                                                                                                                                                                            • Figure 104: Attitudes toward loyalty programs, by household income, September 2013
                                                                                                                                                                          • Attitudes toward loyalty programs in general
                                                                                                                                                                            • Figure 105: Attitudes toward credit card loyalty programs, by gender, September 2013
                                                                                                                                                                            • Figure 106: Attitudes toward credit card loyalty programs, by age, September 2013
                                                                                                                                                                            • Figure 107: Attitudes toward credit card loyalty programs, by age by gender, September 2013
                                                                                                                                                                            • Figure 108: Attitudes toward credit card loyalty programs, by household income, September 2013
                                                                                                                                                                          • Rewards programs – effect on shopping behavior
                                                                                                                                                                            • Figure 109: Attitudes and behaviors regarding loyalty programs and shopping, by gender, September 2013
                                                                                                                                                                            • Figure 110: Attitudes and behaviors regarding loyalty programs and shopping, by age, September 2013
                                                                                                                                                                            • Figure 111: Attitudes and behaviors regarding loyalty programs and shopping, by age and gender, September 2013
                                                                                                                                                                            • Figure 112: Attitudes and behaviors regarding loyalty programs, by household income, September 2013
                                                                                                                                                                        • Impact of Race and Hispanic Origin

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Participation in loyalty rewards programs
                                                                                                                                                                              • Figure 113: Credit or debit loyalty programs enrolled in, by ethnicity, September 2013
                                                                                                                                                                              • Figure 114: Percentage of those enrolled who accumulated rewards in past year, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 115: Percentage of those enrolled who redeemed rewards in past year, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 116: Other retail and financial services loyalty programs enrolled in, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 117: Percentage enrolled who accumulated rewards in past year, by ethnicity, September 2013
                                                                                                                                                                              • Figure 118: Percentage enrolled who redeemed rewards in past year, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 119: Satisfaction with financial rewards programs enrolled in, by ethnicity, September 2013
                                                                                                                                                                              • Figure 120: Most important features of a loyalty/rewards program, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 121: Credit card loyalty program behavior, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 122: Attitudes toward loyalty programs, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 123: Credit card loyalty program behavior, by race/ethnicity, September 2013
                                                                                                                                                                              • Figure 124: Attitudes and behaviors regarding loyalty programs, by race/ethnicity, September 2013
                                                                                                                                                                          • Appendix – Social Media

                                                                                                                                                                            • Brand usage or awareness
                                                                                                                                                                              • Figure 125: Brand usage or awareness, September 2013
                                                                                                                                                                              • Figure 126: Citibank usage or awareness, by demographics, September 2013
                                                                                                                                                                              • Figure 127: Chase usage or awareness, by demographics, September 2013
                                                                                                                                                                              • Figure 128: Bank of America usage or awareness, by demographics, September 2013
                                                                                                                                                                              • Figure 129: American Express usage or awareness, by demographics, September 2013
                                                                                                                                                                              • Figure 130: Visa usage or awareness, by demographics, September 2013
                                                                                                                                                                              • Figure 131: Capital One usage or awareness, by demographics, September 2013
                                                                                                                                                                            • Activities done
                                                                                                                                                                              • Figure 132: Activities done, by brand, September 2013
                                                                                                                                                                              • Figure 133: Citibank – Activities done, by demographics, September 2013
                                                                                                                                                                              • Figure 134: Chase – Activities done, by demographics, September 2013
                                                                                                                                                                              • Figure 135: Bank of America – Activities done, by demographics, September 2013
                                                                                                                                                                              • Figure 136: American Express – Activities done, by demographics, September 2013
                                                                                                                                                                              • Figure 137: Visa – Activities done, by demographics, September 2013
                                                                                                                                                                              • Figure 138: Capital One - Activities Done, by demographics, September 2013
                                                                                                                                                                            • Online conversations
                                                                                                                                                                              • Figure 139: Online mentions, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                                                              • Figure 140: Mentions by page type, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                                                              • Figure 141: Mentions by type of conversation, selected loyalty programs, April 21, 2013-Oct. 20, 2013
                                                                                                                                                                          • Appendix – Trade Associations

                                                                                                                                                                            Companies Covered

                                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                                            Loyalty Programs in Financial Services - US - November 2013

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