Use Telemarketing to Bolster Portfolio

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Since the beginning of the 1990s, the credit card market has become increasingly competitive, as offers have grown more sophisticated and targeted toward specific types of credit users.


As issuers' portfolios grow through aggressive acquisition efforts, it becomes more important to retain and build loyalty among existing customers to enhance portfolio profitability. It is the goal of every financial institution to increase card usage and the dollar amount of revolving balances. The question is what is the most effective way to increase portfolio productivity?


In all retention efforts, the goal is to provide a competitive, compelling offer that allows the financial institution to encourage use of its credit services. When applied with a targeted marketing strategy and developed using dependable, accurate market data, proven programs such as balance transfer initiatives, card upgrades, rewards programs and combinations of these initiatives can provide an effective lift to portfolio productivity.


One of the most successful long-term activation and retention devices has always been the balance consolidation opportunity. By targeting current cardholders and offering lower rates in conjunction with a balance transfer opportunity, the card issuer provides enhanced card value in return for higher revolving balances.


The industry has proved that cardholders are willing to move balances from one card to another to take advantage of lower interest rates and potential premium offers. This program is effective in not only retaining current customers but also providing them with additional value on their credit card account, thus initiating additional account activity. In addition to increasing profitability, an offer of this nature strengthens customer loyalty, thus decreasing the possibility of losing that customer to a competing card.


Since the mid-1990s, telemarketing has proved an extremely effective channel for obtaining balance transfer commitments, both at the time of card acquisition and during the continuing card member relationship. A balance transfer offer may be used effectively as an up-sell to acquisition, an activation mechanism, a call-to-action on a welcome call, a reward for loyal card membership or a win-back opportunity.


Telesales provide an effective customer contact in these efforts because, unlike direct mail and billing inserts, it affords the opportunity for live interaction with the customer. Through this interaction, the telesales representative can assist the customer in identifying potential balances to transfer and in determining the savings opportunity available. This consultative approach, combined with the convenience of transferring balances by phone, has produced millions of dollars in transfers for a variety of card marketers in a cost-effective manner.


To enhance these efforts, the ability of teleservices companies to gather statistical, analytical information has become increasingly important. Successful teleservices are a winning combination of experienced professionals, innovative capability, advanced technology and flexible, customized services. Discovering why customers would pay off their cards or move balances is of considerable importance, and finding the right teleservices agency to gather this information is also critical.


Profiling for Retention


Modeling and profiling lead lists have often proved effective in targeting acquisition efforts and are no less important to enhancing activation and retention initiatives. In addition to modeling files before and after calling, real-time response modeling can provide an immediate impact on calling efforts by analyzing responses and contact information as they are obtained through the course of calling.


By modifying traditional pure response modeling to profile based on the predisposition to transfer balances and by further analyzing profiles relative to transfer amounts, card portfolio managers can better target their balance transfer initiatives. Better targeting affords the issuer lower cost per contact, higher average balances transferred and the ability to eliminate nonrevolvers and unresponsive customers from the calling file.


Refining the Offer


Once a targeted strategy has been established, the offer presentation can also be analyzed to heighten performance. Using innovative scripting analysis is an excellent resource for tracking the motivation behind customer responses in telemarketing. Online scripting technology exists and can be used to track the screens and scripting components accessed by a representative during the course of each call. Unlike monitoring and focus group results alone, this type of technology tracks the order in which responses are accessed along with the corresponding outcome of each call.


Scripting analysis of this nature provides valuable information regarding the use of rebuttals, questions and answers and confirmation of the acceptance. It shows which questions are most commonly asked by customers, which rebuttals are used more often and which rebuttals are most effective. This information helps identify script weaknesses and additional areas of opportunity. In turn, this information is useful in training, script evaluation and script redesigning.


Furthermore, credit card clients can use quantitative script analysis to gain insight regarding the effectiveness of offer components and to adapt future marketing offers accordingly. By scientifically analyzing the customer response to various scripting aspects and test offers, the client can define which offer components were most compelling. Also, by analyzing scripting along with various rate tests, card issuers can more clearly determine the optimum rate at which the customer is likely to accept the offer.


In using a complex script package, analysis is critical to determining which offers work best and how various offers relate to the information provided by the customer. Extensive customized data are available, including the following reports:


* customer satisfaction;


* reasons for a large payment;


* details on which calling file segments received which offers.


With this information, the client could make the following important marketing assessments:


* Which offer was used most often?


* Could offers be standardized across calling segments?


* What new credit products and offers might be developed to provide further customer satisfaction?


* How could existing scripting be changed or modified to provide representatives with a more effective presentation of the offer?


With today's professional teleservices companies, you can obtain a great deal of information through Web sites, company materials or phone inquiries. The use of real-time modeling and script analysis, as well as other unique, proprietary capabilities, can enhance the effectiveness of your campaign.


The adage "work smarter, not harder" has never been more meaningful for our industry. As trends in teleservices and telesales continue to change and a greater focus is placed on maintaining customer loyalty, the tools that have been effective in aggressive acquisition efforts can be employed to make existing accounts more productive for the issuer. You'll find that partnering with a reputable, professional teleservices company will help you do what you do best, only better.

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