With competition fierce, winning a top-of-wallet position for your financial institution’s debit card can be a challenge. Based on data from Experian, we know that most Americans hold four or more payment cards. While there is no simple formula guaranteed to catapult your card over others, the PULSE marketing team has seen exciting results from Debit & Win It, a promotion that gives cardholders an opportunity to be rewarded for making debit their preferred card when making purchases.
Debit & Win It is a card-usage sweepstakes for Discover Debit issuers. The idea is simple: the financial institution offers prize drawings – promoting them through email, social media statement stuffers and on-premise signage – and cardholders receive one sweepstakes entry for every debit purchase during the contest period.
“The key to breaking through the information clutter is to support this contest with prizes that resonate with cardholders,” said Steve Sievert, Executive Vice President of Marketing and Brand Management with PULSE. “Due to the pandemic, we adjusted our strategy from offering experience-based incentives to awarding cash prizes, which turned out to be a great incentive for debit users. The cash prizes were deposited into the cardholders’ accounts, which helped spur additional debit card spend. This approach generated significant engagement in the campaigns, and the winners shared their stories on social media.”
As each financial institution’s goals vary, the seasonal timing and duration of each issuer’s campaign need to be aligned with the incentives. Based on learnings over the nearly three years since Debit & Win It was launched, the PULSE marketing team recommend targeting months when debit spending typically wanes. In terms of duration, some issuers have run the promotion for one week, while others have run it for several months.
One Discover Debit issuer launched Debit & Win It in July 2020. In July, August and October, they awarded three monthly $500 winners, and in September they awarded five $100 student winners. The institution’s debit program saw gross dollar volume (GDV) increase 19% during the contest period compared to July through October 2019. In October 2020 alone, GDV jumped 26% over October 2019.
“As interested as we are in the increase in volume during the campaign, we are also curious about whether cardholders continue using debit at increased levels following the campaign,” said Sievert. “In this case, they did. The issuer saw a 22% year-over-year increase in November and a 19% boost in December. Once Discover Debit secured that coveted top-of-wallet position, cardholders kept us there, demonstrating durability effects of the campaign.”
Boosting Debit’s Impact
One of the headlines from the upcoming 2021 Debit Issuer Study is that key performance indicators (KPIs) related to debit were mixed in 2020. While debit spend was up and penetration held steady, active rate and usage declined slightly. A promotion like Debit & Win It can be a great way to entice cardholders to use their debit cards more often, which can improve an institution’s active rate and boost transactions per active card.
The first step in exploring these opportunities is to understand the performance of your debit portfolio, which is easy with the services and support PULSE offers, like Debit Dashboard®. There is a wide disparity in KPIs between best-in-class issuers – defined in the Debit Issuer Study as the top 25% of issuers in each performance measure – and the rest of the pack.
“The important thing to understand is that there are a few simple things you can do to grow your debit program,” said Sievert. “Promoting the use of debit should be one element of an integrated debit marketing program that starts the moment a new account is established.”
That first interaction with an account holder is when issuers can boost penetration through instant card issuance. We’ve also seen that active rate can be improved by fully explaining debit’s features to new cardholders, and highlighting the benefit of using debit for recurring payments. Every institution – even the best-in-class issuers – have cardholders with little or no debit card activity. Be sure to identify and reach out to this cardholder segment periodically to remind them where and how debit can be used – online, in stores, for bill pay and loaded into digital wallets and apps.
Some issuers are also offering “digital first” issuance, enabling the debit card in a mobile wallet prior to issuance of the physical card. This can be an especially appealing option for younger and more tech-savvy account holders.
To increase usage, give cardholders tangible reasons to use debit cards through promotions such as Debit & Win It. Such programs support debit volume goals, drive cardholder confidence and encourage cardholders to expand their relationship with your institution.