In the latest in a series looking at consumer attitudes to finance brands, Rebecca Jennings, senior client advisor at international benchmarking firm Global Reviews, sets out findings from a recent benchmark survey on credit card brands. The findings reveal how consumers discover credit card brands and make their final choice.
A new survey from Global Reviews has found that the nation’s joint favourite credit card providers are Tesco and Barclays. But the survey wasn’t about finding winning credit card brands. Instead, it took a deep dive into 'shortlisting behaviour'. It asked how consumers search for credit card providers, how they make a shortlist of brands to investigate further, and how they make their final selection. And the surprising result is that many credit card brands get onto a consumer’s shortlist, but don’t make it any further. In short, the credit card brands get themselves shortlisted, but they don’t convert the opportunity. At present, consumers rely on comparison sites to help them take a view of the entire market, and then narrow down a shortlist of providers for further investigation. Few card brands manage to convert more than a third of users who place the brand on their shortlist, suggesting that the market is highly fragmented and that few brands are managing to clearly differentiate their offerings. The credit card industry can do much more to encourage initial selection and final conversion. The Global Reviews survey, conducted in October 2012, tasked 200 UK consumers to find a new credit card provider. The survey found that consumers spend an average of 3.5 hours spread over four days doing their research and typically look in depth at between four and six providers. Consumers flock to comparison sites
Do people use comparison websites? Absolutely yes. The majority – 69 per cent – went to a comparison website during their search. A noticeably lower percentage – 47 per cent – visited a card provider’s own site. Among those who visited a comparison site, 73 per cent said this was because the sites reveal a range of deals from several providers. But only 40 per cent think a comparison website is where they will get the best deals.
But card sites are poorly rated
This preference for comparison sites is unsurprising. A previous Global Reviews survey revealed that only 28 per cent of potential customers would recommend the sites of credit card providers. Worse than that, 40 per cent would actively discourage friends or colleagues from visiting credit card sites. Only a fifth (20 per cent) of users think that card websites make it easy to find products that suit their needs. Those findings translate into an overall negative Web Promoter Score* of minus 12 per cent for the eleven providers in this survey.Tesco and Barclays top shortlists and final preferences
Amex and Barclays/Barclaycard topped the list of known card providers when users were asked – unprompted – to name up to five card providers. But neither received visits from more than 39 per cent of consumers. In fact Amex were only the eighth most visited site, attracting just 14 per cent of consumers, behind Barclays, Tesco, Halifax, Lloyds TSB, NatWest, Capital One and Santander.When asked which brands they would 'shortlist' as good places to spend research time, respondents cited Tesco, Barclays and Capital One as their top three. These preferences continued through to the final selection stage, with 19 per cent of consumers selecting Tesco as their preferred provider and the same percentage selecting Barclays. Just three per cent made their final selection decision in favour of Amex.
Tesco successfully leverages existing relationships
When consumers were asked why they made their final choice, responses varied strongly between brands. For example, 61 per cent of those who chose Tesco as their preferred credit card provider said they had an account/loyalty card with Tesco and that this was a factor in their decision. But just 14 per cent of those who chose Barclays for their credit card were influenced by this sort of ‘existing card’ relationship. Leading brands lose two thirds of consumers who shortlist them
So which brand converted people from shortlist to final selection most successfully? It was Barclays, which persuaded 50 per cent of respondents who shortlisted them to go to the next step of selecting them. Most brands failed to convince even a third of users who placed them on a shortlist to make them the final selection.
Final selections were driven largely by the brand “deals and offers”. But 47 per cent cited “reputable brand” as being an influence (the second most important reason cited). The reputation of the credit card brand – and trust in that brand – were especially important for the 40 per cent of consumers who started the process with no initial pre-research brand preference.Note: Web Promoter Score (WPS): measures willingness of visitors to recommend websites. It subtracts the percentage of visitors who dissuade others from going to a website (detractors) from the percentage who would recommend it (promoters). Example: 70 per cent recommend a site; 20 per cent advise against = WPS of 50 per cent (70 per cent minus 20 per cent).This article is part of a series looking at consumer attitudes to financial brands.