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Crowdsourcing might work well for the likes of Starbucks researching which new iced coffee flavour to launch next, but for the financial services industry surely letting the public manage personal banking products would be crazy?
Not so, says Mike Schanker, VP Global Marketing at Lithium, who shared the results of the ground-breaking Barclaycard Ring card during Australia's recent Digital Financial Services conference. According to Schanker, it is precisely this approach to increasing customer engagement that has worked a treat – and is worth noting because, according to some estimates, engaged customers spend up to 40% more than their less engaged counterparts.
Launched in April 2012, Barclaycard Ring card is the first community-based credit card. With a business strategy based on transparency, authenticity & community-driven innovation, card members saw the monthly P&L, voted on product features and participated in profit distribution schemes.
What was striking about placing customers in a position of power was how differently they appeared to think when they had complete control over rule setting. For example, when asked to vote on allowing payment extension periods and waiving late fees, the majority vetoed the features that most of us would expect to be no-brainers.
It's a great example of empowered and engaged communities making self-regulated choices for the greater good as well as a showcase for what can happen when a brand that sees and understands the shift of power towards consumers – and chooses to harness it.
Barclaycard Ring is a stand out compared to banks looking to social networks like Facebook to engage with customers. As Schanker points out, social networks deliver reach, not engagement. Those of us marketing in the digital space must remember community is built around a shared interest and is useful to the brand only when a community is built on its own platform. And that's exactly what this new product did.
Barclaycard Ring took on the super-competitive credit card space and managed to create advocates and lower attrition than is anticipated in this sector. Following its success in the US, Barclaycard Ring card will roll out in the UK, using its first mover advantage to attract new customers to the brand – not to mention brand awareness and positive reviews from bloggers and media alike.
These types of innovation are not developed overnight and clearly require enterprise-wide infrastructure and communication to succeed. But it's a program that would not have seen the light of day had it not been for the CEO believing in the power of social media and online engagement.
It was this belief, Mike told me later, that was the secret to Barclaycard’s success. This type of leadership, which displays an appetite to learn more about what customers really want and a willingness to try what might initially seem a crazy idea, is what will enable the next financial services organisation to bring a compelling program to market here in Australia.
