Are You Reaching These 6 Key Cardholder Segments?
By Nicole Jass, Vice President of Data Products, Worldpay.
Credit unions are known for their loyal members. But that doesn’t mean your members are always using your card as their preferred form of payment. To get placed top of wallet, you need to develop a deep understanding of your cardholders and their purchasing habits.
As a merchant acquirer, Worldpay has visibility into the purchase activity of 161 million credit and debit cards, representing 82 million U.S. households. Armed with this huge cache of data, we are able to isolate and analyze differences in cardholder shopping trends between credit unions and national banks.
One trend we’re watching closely is the growth of recurring payments. As more cardholders load and save their cards with online subscription services, this becomes an increasingly desirable category.
Although credit unions grew recurring payments as a percentage of total volume by 65 percent in 2017, national banks did even better at 80 percent. The result? National banks increased their market share in this category, and now hold nearly 75 percent share versus credit unions.
So, what can credit unions do to help capture more recurring payment activity? Look to your cardholder data for clues.
With Worldpay's Vivid Data EngineTM, we can analyze 12 billion annual transactions across 82 million households to isolate and better understand the range of cardholder demographics and behaviors. From this data set, Worldpay has developed a set of 26 unique shopper profiles. The results are eye-opening.
For example, credit union cardholders are generally more affluent as compared with national bank cardholders. That is good news! On the other hand, credit union cardholders tend to skew older. Interestingly, credit union cardholders overlap nicely with several of the prime shopper profiles for card not present (CNP) and mobile wallet behaviors.
We recommend focusing your credit union’s marketing efforts on these six cardholder profiles:
3 to engage:
Credit unions already have these three types of cardholders in their member base. The key is creating campaigns to reward and incent recurring payment behaviors, such as loading your card in their online merchant profiles. Once a cardholder sets up a specific card for recurring payments, it is usually “set and forget,” and that card will be their preferred form of payment to that merchant for a long time. The three shopper profiles to engage with are:[3
1. Big spender parents—These cardholders average 45 years of age and earn $174K per year. 96 percent have kids at home. They enjoy traveling, give to cultural organizations, and have active hobbies.
2. Chic society—Members of this group are executives without children at home. They average 59 years of age, and with average incomes over $171K, they have disposable income to spend.
3. Doing well & donating—These cardholders are typically middle-aged parents, with average incomes of $181K. At an average age of 52 years, the heads of these households are in their prime earning years, purchase high-end goods over the internet, and donate regularly to charitable organizations.
3 to acquire:Worldpay has found that CNP and mobile wallet behavioral segments spike within the 30 to 50-year age group. However, this is below the average age of the typical credit union member, so credit unions should focus on reaching out to the following groups, representing young, affluent families, and pre-family cardholders. The three shopper profiles to acquire are:[5
1. Feathering the nest—At an average age of just 32 years, these are young, high-income, well-educated homeowners with kids. They spend a good portion of their $180K income on their children, as well as on electronics and media.
2. Go-go families—These are highly mobile, educated, high-income households. 96 percent of this segment has kids at home, and they are active online and retail shoppers.
3. Just sailing along—With an average age of 36, these largely childless households are still early in their careers. They have college degrees and are typically renters. They are highly active and fit, and also purchase the latest electronic gadgets.
By targeting the above groups with highly-focused marketing and loyalty campaigns, you can ensure your credit union won’t get left off the recurring payment train.
Worldpay is the NAFCU Services Preferred Partner for ATM, Debit Card & Gateway Processing; Credit Card Processing & Servicing. More information and educational materials are available at nafcu.org/worldpay.