This week I had three interactions with three banks and it became clear that Chase knows how to motivate me because Chase knows how rewards programs work, why is it so hard for everyone else?
It’s Not Just Credit Cards
My relationship with banks, like other consumers, is not limited to credit cards. I am a mortgage owner (I don’t say homeowner because the bank owns it), I have checking accounts, investment accounts, savings accounts, and while I don’t have any at the moment, I like to get CDs from time-to-time.
Some banks have great credit card programs but don’t extend this to other areas of their customer’s financial lives. Checking accounts are one area where I see this often. BankDirect (which I left) offers an American Airlines Mileage earning checking account as did Sun Trust with Delta. Citi, who have both their own currency (Thank You Points) and a long-standing relationship with American Airlines (among others) offer targeted bonuses but put credit card type rules in place to limit abuse and participation.
Most banks are not using their relationships to their fullest. Bank of America once offered Alaska Airlines miles for a new checking account but don’t do so anymore. Other banks don’t seem to utilize their reward points as sweeping as Chase has with Ultimate Rewards.
Total View of the Customer
Chase has been so good for our credit card experience that we moved other aspects of our financial lives to the bank. We have had a number of banks that could have competed for a larger piece of our business, only Chase has really sought it out. Our previous mortgage holder offered no incentives (despite us reaching out to them) to win our next mortgage. As a result, we left them completely for Chase.
By building a deeper relationship with us and making aspects of a greater relationship aspirational (like Private Client) we gave them an opportunity before other banks. The bank matched a competing mortgage interest rate (after some pushing) but we ultimately chose them because of an Ultimate Rewards bonus and also because it is easier to keep everything in one place.
By selecting the levers that have driven our past behavior, they have found a way to drive our current and future behavior.
Imperfect but Better
For some customers, Ultimate Rewards points (though they can be c0nverted into these currencies) might not draw customers the same way 75,000 United miles or Hyatt points might. I’d argue that depending on how they transfer into a traveler’s account, 75,000 well-timed Southwest Rapid Rewards points could be worth far more if they put participants within striking range of Companion Pass.
Others Just Don’t Understand
Citi is perhaps the worst at using intelligence to market to their customers in my experience. Citi doesn’t engage me in offers for which I am eligible. Barclays sends me offers for higher than average transfer fees and very poor spending bonuses. They don’t engage me and haven’t earned my business.
American Express offers me a personal loan at just under 8% for up to $25,000 every single time I log in, but I will never take it – why? Because every other bank sends me checks that offer 0% for 12-24 month and between 1-3% transfer fee. American Express knows what is competitive and they clearly don’t want my business as bad as others. I have taken that offer up with other banks from time to time, it can make sense around big purchases (you make X amount of points but pay over time for 1% charge.)
Chase isn’t perfect, but they do a better job than any of the others at driving customer behavior and rewarding customers for doing business across their portfolio. We could be missing out on great service with Citi, Bank of America, or others but without giving us a reason/incentive to do business with them, we won’t find out.