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Share of Wallet Case Study
Share of Wallet Case Study
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Challenge

A well-known bank wanted to refine their credit card acquisition campaign strategies. 

Solution

The bank used Argus’s Customer “Share of Wallet” Modeling, which is a comprehensive customer-level view of a specific card’s share of wallet.  The bank received depersonalized credit card transaction data collected from the Argus Credit Card Payment Study (CCPS), combined with depersonalized full file credit bureau information. 

Results

By incorporating a suite of three “Share of Wallet” modeled scores  (Spend Propensity Score, Revolve Propensity Score, and Product Preference Score) into their acquisitions strategies the bank was able to reduce their 11mm mail base by 4mm for each prospect campaign, saving them roughly $2mm in mail costs per campaign.  

The bank also experienced twice the response rate when compared to the control cell.  Additionally, once the accounts were booked, the performance of the higher scoring accounts resulted in 50% higher revenue (driven by higher spend and balances) relative to the lower scoring accounts over the first 12 months.

Today, credit card issuers are not only competing to gain qualified customers, they are competing to be their customer’s primary provider of payment services. As a result, financial institutions need to make some compelling offers to get more of their customers’ business. This is not an easy task if an issuer lacks insight about what’s happening in their customer’s wallet.

Argus has created a unique cross-issuer solution that provides the full view of a customer’s credit card wallet. This information has been used by financial institutions to determine what “share of wallet” their credit card commands.

Share of wallet information affords issuers’ an understanding of what percentage of card activity is being captured by their card(s) at a customer level.  Insights from this “share of wallet” data help issuers increase efficiency and refine their acquisitions and existing customer marketing strategies.  Response rates and profitability increase, by focusing marketing investments on consumers most likely to become cardholders, and cardholders who are most likely and willing to increase their business with an issuer.

In addition, the Argus Client Delivery team, which is comprised of industry experts and quantitative modeling specialists, can easily transform the customer share of wallet data into descriptive reports, MIS, analysis, and models, including:

  • Quarterly indicators and trends on “share of wallet” metrics (ie, spend, revenue, category of spend, payments, behavior)
  • Customer Share of Wallet benchmarking reports (ie, spend by customer by MCC category, revolving balances by customer, spend by customer on the other cards in their wallet)
  • Unique customer “share of wallet” analysis (ie, on-line spend share analysis)

Our solution can answer:

  • What is the “off-us” spend and revenue opportunity for the customer? What types of usage behavior is the customer exhibiting on her/his other cards?
  • What type of product, pricing, and value-proposition are driving the customer’s “off-us” usage behaviors?
  • What competitor actions (promotions and offers) are driving “on-us” account attrition — silent and closure? 
  • How effective are the balance-generation and usage programs (investments) in capturing incremental spend and revenue share at the customer level?
  • Are the customer’s payments a fair representative of the customer’s capacity to pay? If not, what are the drivers?