Capital One - marketing
| Author: Clariman | Created: 18/09/2007 |
Capital One - masters of targeting different segments
In our main article on Capital One, we discussed the fact that they are very smart at targeting different segments of the credit card industry. We can see that in their current offerings, but we can also see their track record of doing this over recent years. Indeed, this careful market segmentation is not at all new for Capital One. Some years ago when many card issuers were reducing their cashback levels or doing away with them altogether, Capital One kept on their 1% cashback Circle card for a long time. It was not publicised widely but it was there for the savvy consumer who sought it out. Clearly they didn't want to actively promote it at the time, but they knew some savvy consumers were looking for such a product so they maintained one.
There was an even better example of how smart (and devious?) Capital One can be, back in September 2004. At that time they launched a huge advertising campaign for a card that had "the UK's lowest flat rate card" which they were presenting as a very innovative product. There were billboard ads and a major TV ad campaign which was all backed up by 'research' saying,
New research from Capital One has revealed that although 8.2 million Britons (18%) have moved outstanding credit card balances to other cards to take advantage of introductory offers and low balance transfer rates, 46% of all credit card holders would be happy to stick with one provider if they were offered a low long term interest rate.
That was a sensible message to be taking to the market to promote their new flat rate card. However, despite this research, the next year Capital One offered the longest 0% balance transfer deal that there had been before or since - a fantastic 18 months. So much for constant flat rate cards then! Even better - within weeks of making this showstopping offer, they were back to touting the long term low rate offers again, backed up by yet more research
People who switch credit cards for interest-free deals are costing the industry £1 billion a year, researchers have concluded. Report author Professor Merlin Stone, of Bristol Business School, said some credit card providers could not afford to continue to offer such deals. He said flat rates of interest are likely to be introduced as a result. The report, commissioned by Capital One credit card, also found many consumers were becoming tired of switching.
On one hand they were saying that card issuers could not afford to offer interest-free deals, yet on the other they were offering the best interest-free deal that any of us had ever seen! This is fairly typical of how Capital One segment the market, have big advertising campaigns and tries to back all horses in the race. They are smart in my opinion.
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