Okay, it is April. But for the Barclaycard Ring team, this month marked the one-year anniversary since launching its radical “crowd-sourced” credit card. From inception, the Ring’s value proposition centered on creating an experience with cardmembers that was simple, collaborative, transparent and fair – a fundamental shift in how many consumers perceive and interact with their credit card company.
At the heart of the program is a community where members provide feedback to influence how the card is structured and managed; view the card’s financial performance; and share in the resulting profits. Cardmembers seemed to embrace this new ‘democratized’ construct. Customer retention improved 25% while complaints dropped by 50%. Barclaycard has found that customers who engage in the community are 70% less likely to close their account.
Forrester recognized Barclaycard Ring with a Groundswell Award in fall 2012. With such a promising first-year, we asked Jared Young, Senior Director Consumer Markets at Barclaycard US (and former ComBlu client) to share his insights on building this unique social program and give us a peek at what lies ahead.
CB: When you started down this path, it was pretty ground-breaking in the payments space. What were some of your biggest concerns going in?
Jared: Honestly, the biggest unknown was would people ‘engage’ around a credit card. This isn’t Oreos or running shoes. We were pleasantly surprised by just how much they did engage. There’s a lot of ask-and-answer activity. Members have started discussions on debt management, financial resources, and budget tools, among other things. And they step up pretty consistently with ideas and feedback – on the card, on the community itself, on how profits are allocated in our Giveback Program. Benchmarking against Lithium’s community health index shows our engagement has been strong and growing – jumping 15% in the last six months.
CB: Community crowdsourcing was core to this program. What kind of decisions have cardmembers effected so far?
The first major product decision has been to vote in a change to our late fee policy. What was really interesting is that nearly half the members weighed in on that decision. (To put that in perspective, only about 60% of Americans voted in the last Presidential election.) Each month, we open a discussion on different card features. Since the beginning of the year, we’ve talked about an “always on” grace period, rewards and even the card design. Our current topic is a hot one – fees.
Members have also made several recommendations – a number of which we’ve executed — on how the community works. For example, we adjusted the dashboards that detail how the card is performing to reflect their feedback. In total, I believe we’ve had upwards of 70 substantive ideas floated that other cardmembers have actively engaged around.
CB: Speaking of performance, talk about the Giveback Program.
If the card performs well, cardmembers share in the profits. In essence, it incents members to make good card decisions – like paying on time, going paperless and evaluating cost-benefit trade-offs in how the card’s structured. One of the coolest things is that members can choose to take the profit themselves or allocate it to a charity that the community has selected for that giveback period. Members nominate different causes; the community votes up its favorite. The current Giveback beneficiary will be Shriner’s Hospital for Children.
CB: So what’s next?
In Year One, it was all about innovation, the cool factor. This year, education is at the heart of our content strategy. We’re about to kick off a yearlong financial literacy series to help members with financial management and planning for different stages of their lives. In addition to sharing our point of view, we’ll feature other experts, articles and tools we think would be helpful in reaching their goals.
We’ll also be extending the community platform to other Barclaycard products. Later this spring, we’ll rollout a new Travel card with its own community. Our Ring cardmembers have been invited to get a sneak peek at the new site and give us their feedback.
CB: What advice would you give other marketers who are embarking on their own community journey?
One of the key lessons we’ve learned is to keep the customer at the core of the program. Your advocates are out there and willing to engage with you and share their feedback. Be ready to listen and act on that input.
Community is about creating an authentic relationship. That may take stepping out of your comfort zone and being more transparent. In our case, we spend a lot of time explaining how a card makes money – not something that most banks are willing to do. Those P&L blogs are among the most highly read.
A solid gamefication strategy is also essential. It incents consistent engagement and helps you identify your most important advocates. We tap into our best advocates regularly – and then thank them for their extra efforts. Last month, we sent a small token to our Gold and Platinum community members and got a great response.
Cardmember Philip Huff acknowledged Barclaycard Ring’s ‘superuser giveaway’ (thank you) in his blog. Do your advocates do that?
Simple. Collaborative. Transparent. Not words that immediately leap to mind when talking about consumers’ relationship with their credit card companies. But that’s exactly the association that Barclaycard US (a ComBlu client) is trying to build with its introduction of ‘the first social credit card’ driven by cardmember community input.
Low interest rate (8% vs. the industry average 15%), low fees and simple terms are certainly a big part of the equation. But the social elements at its core are what could make the Barclaycard Ring a game changer in the payments space. It centers on an ability to provide cardmembers with:
Here’s how the brand describes its social offering.
Effecting change in this environment is no small task. Consumer trust in banks has continued to decline. In recent studies, the Reputation Institute and Edelman Trust Barometer count financial sector firms among the least trusted by consumers. In this environment, incrementalism won’t do. Through its community construct, the firm looks to “put the power back in the hands of customers,” a fundamental shift that strives to change how consumers see and interact with their credit card company, according to Paul Wilmore, Managing Director for Consumer Markets at Barclaycard US.
Rolled out at social mecca SXSW this week, there’s been lots of buzz about the concept, considered ‘revolutionary’ in a highly regulated industry not known for its willingness to embrace social.
In an onsite interview with genConnect, Wilmore explains the importance of giving cardmembers ‘a seat at the table’ to help build this new kind of relationship — one that synchs with regulators’ drive for greater simplicity, clarity, transparency and fairness. As Barclaycard Ring becomes available to consumers later this spring, this will be a community to watch.