Wachovia Corp. is testing the power of Visa U.S.A.’s Visa Extras rewards program to attract new customers and increase loyalty.
It is offering 5,000 Visa Extras points for customers who enroll their Wachovia debit cards in the program. The promotion started Jan. 1 and runs through March.
Wachovia spokeswoman Mary Beth Navarro said the Charlotte banking company believes Visa Extras, which it has offered since August 2004, helps it land new customers and encourages those already on the rolls to sign up for the debit card and use it for everyday purchases.
Visa Extras “gives us a competitive advantage marketing our check card,” Ms. Navarro said. It is “not only a relationship product for us, it’s also profitable with the interchange fees.”
The enrollment promotion is aimed at a “mass market” and uses print and radio advertisements, Ms. Navarro said.
Though Ms. Navarro said it is too early to gauge the success of the current promotion, she said customer response to Visa Extras has been “really significant.” At yearend 10% of Wachovia’s 8 million debit cards had been enrolled.
John Bartold, a contributing editor to Colloquy, a quarterly on loyalty marketing, called Visa Extras an attempt to “create a currency that has great perceived value that draws more business to the bank over all.”
He said it is similar to but falls short of the Thank You program started by Citigroup Inc. last April. With Thank You, Citi customers earn points for all their banking activities. They must have a Citi checking and debit account to enroll, but they do not acquire points unless they have at least one other Citi banking product.
“More and more” companies will offer rewards for banking activities, Mr. Bartold said. “I think you are going to see a lot of toe-dipping, like what you’re seeing right now.”
He said those most likely to respond to Wachovia’s offer are customers enrolled in Visa Extras at other banks, and those who use their debit cards frequently.
He said it is hard to say how effective Wachovia’s enrollment bonus will be, since Visa Extras is not well established. He said Wachovia is trying to increase awareness of the product. “I think they’re looking to create even just a blip on the radar screen.”
