Credit Card Marketer Shifts Target Online With PeoplePC Agreement

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A new partnership between FirstUSA, Wilmington, DE, the largest issuer of Visa cards, and PeoplePC, a marketer of free personal computers, illustrates FirstUSA's recent efforts to both move away from traditional direct mail and to target online shoppers.


PeoplePC Inc., San Francisco, offers name-brand computers at no charge to customers who agree to sign up for Internet access at $24.95 per month for three years. When customers apply for credit to join PeoplePC, the company notifies them if their credit qualifies them for Platinum membership, which allows them to apply for a PeoplePC-brand Visa card from FirstUSA.


"We're checking their credit anyway because we're sending them a pretty expensive piece of equipment," said Gretchen Wolfe, a spokeswoman for PeoplePC. "So we just notify them if they qualify for Platinum membership."


The card is similar to FirstUSA's e.Card, which offers users discounts at various online shopping destinations, including Amazon.com and eToys.com. In addition to the benefits received from using the branded Visa card, PeoplePC members also can receive discounts at several other online merchants.


"That's a big part of PeoplePC membership is that we give members discounts on our partner sites, and that includes everyone from E*Trade to 1-800-Flowers to a host of online and offline retailers," Wolfe said. "Ultimately, really what we are is an aggregated online shopping club. We're able to take the base membership that we have and negotiate better deals."


By partnering with PeoplePC, FirstUSA is able to reach an audience that is likely to be interested in online shopping and possibly in using a credit card that was designed for such use.


PeoplePC also plans to position a separate icon on the user's computer screen that will link consumers directly to WingspanBank.com, the online banking arm of Bank One Corp., Chicago, parent company of FirstUSA. James W. Stewart, president and CEO of WingspanBank.com, also is heading up the FirstUSA-PeoplePC partnership.


Meanwhile, FirstUSA is partnering with FreeMac, Santa Monica, CA, in a similar marketing arrangement in which Visa cards will be offered to customers who sign up for that company's free Apple-brand computers. A FirstUSA spokesman said he expects marketing to support that partnership to begin soon.


The deals with PeoplePC and FreeMac are two of several that First USA has pursued during the past few years that steer it away from traditional direct mail offers.


"Competition within the credit card business has been very intense since 1994," said FirstUSA spokesman Jeff Unkle. "The direct mail channel is the primary channel everyone uses. We for a long time have looked to other avenues, whether it be telemarketing or events or the Internet to approach customers with an offer that's going to be of interest to them."


Unkle said the credit-card industry is expected to mail about 3 billion direct mail pieces this year. Although Unkle said FirstUSA was still "aggressively using the direct mail channel," alliances such as the one with PeoplePC allow it to reach potential customers by taking slightly different avenues in which it rides along as a piggyback to other offers. n
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