Nov 7, 2005

Tod's leather goods

Tod's is a high end fashion leather goods store. Several banks are offering promotions at Tod's, for example the sign in this picture announces a 10% discount for Citibank cardholders. Interestingly, the store manager told us that most people pay with their American Express cards and get no discount. She thinks they prefer their American Express cards because of the Membership Rewards program.

With all this competition how does a bank stand out and get a better deal for its cardholders? Should the bank copy Citibank and compete on discounts? Or copy American Express and try to create a brand as powerful and known as Membership Rewards?

The Citibank and American Express promotions do not directly address Tod's marketing objectives, because they are purely issuer driven. Banks have another option. They can choose not to compete with either Citibank or American Express and instead offer completely different promotions right on the credit or debit card receipt, that link more closely to the retailer's marketing objectives, enhance the retailer's brand and generate business.

For example, "Spend 200,000 baht cumulative from today to December 31st, 2005, get a pair of shoes free. Spend 500,000 baht and get a free purse." This reinforces the quality and value of the Tod's brand, as opposed to discounts which damage the retailer's brand.

If you can get the merchant excited and involved, the merchant will actively promote your card and encourage customers to use it.

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