First USA, Reader's Digest Launch Credit Card Mailing
The partnership also marks one of the largest forays into financial services marketing by Reader's Digest, which for the past two years has been seeking to expand its brand into several new channels and to leverage its database by offering its customers additional products and services.
Jeff Unkle, a spokesman for First USA, the Wilmington, DE-based credit card marketing division of Bank One Corp., Chicago, said the Reader's Digest database of more than 13 million subscribers makes it one of the largest groups it has ever worked with. First USA markets credit cards to thousands of affinity groups, which can reap incremental revenues from purchases made using the cards in exchange for providing access to their members.
Unkle declined to reveal what criteria were used to select the names for the mailing from the publisher's database of subscribers.
William Adler, a spokesman for Reader's Digest, said the two companies spent a lot of time defining the list of prospects.
"We spent four or five months doing a lot of analysis and testing to come up with a very targeted list," Adler said. "It's a small segment of our potential database. It's a small, focused group, and it's a very targeted group."
The Reader's Digest Platinum MasterCard has no annual fee and features an introductory annual percentage rate of 2.9 percent, followed by a variable rate of prime plus 4.24 percentage points. Other features include the opportunity to earn reward points on purchases redeemable for merchandise such as cameras, televisions and discount airline tickets. The users also will be able to earn free trial subscriptions to Reader's Digest magazines.
The same offer is being sent to all of the nearly 5 million prospects.
"We did a lot of testing with small groups and focus groups to gauge attitudes toward different potential packages," Adler said. "We wanted to do more than put our name on a card. We actually wanted to come up with a package that had a good reason to have the name and the relationship."
The company plans to follow the mailing with additional marketing efforts, including some telemarketing, Internet advertising and at least two additional mailings.
Neither Adler nor Unkle would reveal details about the companies' plans for the additional mailings.
Meanwhile, Reader's Digest also is preparing a test mailing in June to launch YouRxPlan, a prescription drug insurance program for older Americans that is being offered in conjunction with pharmacy benefits manager Merck-Medco. Adler said Reader's Digest identified 17 million consumers in its database who do not have health coverage and might be candidates for the offer. The company is planning additional mailings based the results from the test.