Banks are scrambling now to react to upcoming legislation and “try to replace more than $50 billion in revenue wiped out by new rules that clamp down on certain business practices.” A recent article in the Wall Street Journal focuses on the impact of new rules on credit card interest rates. New rules go into effect in February and “will limit some interest-rate increases, require more disclosure to customers, and prohibit banks from raising interest rates on current balances unless a customer is at least 60 days behind in a payment”.

As a result of these changes, credit card issuers are trying different approaches to generate revenue including account statement fees, watering down rewards programs, and fees for inactive accounts. The danger in all of these is that you risk losing customers. The challenge is in finding the customers where you can introduce these tactics without increasing risk of attrition. (more…)

Visa has changed its marketing message with its new “Currency of Progress” campaign. The new campaign is a huge shift from the prior “Visa: It’s Everywhere You Want to Be” campaign. Visa is already running these ads broadly and spent an estimated $1.4M on ad spots in October and November alone.

Before moving forward with such a fundamental shift in the marketing strategy, we would recommend running the new ad in a subset of markets. This would confirm whether the new ad is in fact more effective and more importantly show if some markets actually respond better to the current campaign than the new campaign.

To maximize the return on media investments, it is essential to know which message works best, the markets with the highest returns on media spend, and the optimal media mix. The only way to get these answers is to try different messages, spend levels, and media mixes; measure what happened; and determine what worked best.

Read an overview of APT’s Test & Learn approach