Credit card issuers have been seeking new ways to drive cardholder loyalty and engagement as their market share has been under threat from both debit cards and emerging payment types (such as mobile wallets and apps), according to Auriemma Consulting Group, whose latest research reveals that social media could be a significant channel for improving cardholder engagement.
The company's survey found that 71.7% of credit cardholders already use social media, and its usage is increasing daily among younger and higher-income cardholders. However, despite strong cardholder penetration of social media across the board, only 13.8% of consumers said they were subscribed to their credit card issuers' Facebook pages, and 68% of the cardholders who had done so said they had not yet interacted through the channel (i.e. responded, replied, or shared a message). Card issuers have clearly yet to solve how best to use social media to drive increased engagement and loyalty.
The research also showed that consumers feel they need to see clear and tangible value in order to subscribe and engage with credit card social media pages. Consumers were most interested in the ability to contact customer service through social media (34.1% incidence rate), redeem exclusive rewards/special offers (32.5% incidence rate), and sign up for cardholder subscriber events (30.1% incidence rate). These benefits would provide clear and compelling reasons for consumers to engage through social media channels.
"Social media is a huge opportunity for issuers, given its strong cardholder penetration", said Matt Simester, managing director for ACG. "Social media provides a way to drive increased engagement and usage amongst cardholders, and is best suited as either a mass servicing or marketing channel, as one-on-one interaction remains difficult to accomplish. To drive stronger interest and engagement with social media, exclusive and frequent offers are key, which will also serve to differentiate issuers from the competition in an increasingly competitive marketplace. Issuers need to start spending as much time on engagement through this channel as phone and branch based services."