Though other card issuers are “slicing and dicing” their portfolios to make up for economic hardship and the effect of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, Discover Financial Services is promoting in a new print ad its heritage of offering rewards, good customer service and no annual fees.
After posing several questions about issuers charging fees for rewards, use and other card fees, the tagline of the ad states: “It pays to switch. It pays to Discover.”
The ad, which is running in several major print publications including Newsweek, People and Oprah magazines, launched March 15 and is running indefinitely, Julie Loeger, Discover senior vice president of brand and product management, tells PaymentsSource, noting Discover likely will build on the print campaign but has no plans yet to do so. The ad complements Discover’s other ads that promote its 5% Cashback Bonus rewards, she says.
“The premise of the ad is simply to bring the Discover brand to life and identify what the brand has stood for for 25 years: rewards, service and value,” says Loeger. “The message is basically reinforcing our commitment to consumer value.”
Other card companies are introducing new fees, she notes. “We have chosen not to [add fees]. It’s been in our brand DNA since day one, so it’s really easy for us,” Loeger says.
Discover says it is able to take this mass-marketing approach because its product has remained consumer-centric and equal for all consumers, Loeger says. With other card issuers that have split up portfolios to add fees, “not every relationship is treated as equal,” she says. “There’s a lot of back and forth with fees, whereas Discover continue to offer rewards on every purchase and has no annual fee.”
The ad sends a powerful brand message to consumers who have had a lot taken away in terms of increased interest rates and fees to make up for lost issuer profitability in the current market, one analyst says. Despite the boom of rich and highly segmented credit card products that many issuers introduced between 2005 to 2007, Discover has always stuck to its core product, and this is serving them well today, says Megan Bramlette, managing associate of Westbury, N.Y.-based Auriemma Consulting Group.
“Discover has always focused on its core value proposition and has built its product to support the mass market that can withstand all different kinds of conditions and remain profitable,” she says. “This advertisement is an exclamation point on their historic brand that they are still doing what they set out to do, and it will resonate with consumers.”
Bramlette notes that, while the ad may not be a direct acquisitions tool, she expects Discover to follow with more pointed marketing to get new consumers to apply for the Discover card.
