EDITORIAL: This Is Loyalty?
Needless to say, many cardholders probably aren't feeling loyal anymore, and at least one will be canceling his card. The company didn't replace the program, instead saying, "In the months and years ahead, we will continue to look for innovative ways to make your card benefits more rewarding." Or, basically, "Screw you. Go sign up with one of our competitors." Richard G. Barlow, president of Frequency Marketing Inc., Cincinnati, told me that he recommends a minimum of six months to discontinue a program. He also offered four keys to a graceful exit: setting limits, timing it right, communicating clearly and practicing targeted generosity (being nicer to top customers who spent more). It's obvious that First USA didn't talk to Barlow. And with market oversaturation killing response rates for credit card mailings, it wouldn't seem wise to scrap one program without introducing an alternative.
A year ago, First USA knew that acquiring new customers was far more expensive than retaining old ones. Not only did its officials forget this, but they also have soured many consumers' opinions for life, Barlow said. A representative said Extraordinary Rewards was discontinued because the company had too many programs and was working to consolidate them. Consolidate and shut down are two different things, however, and to the customers dreaming of the sandy beaches of Hawaii, it means one thing: Go fish.