"Top of wallet" status

In card issuing, as in hiking, there is often more than one way to the top. But there are signposted trails for good reason.

 

Cardholders, like hikers, generally set out on their customer journey from a base point and then follow a trail. At any point on the hike, one of two things happens: the cardholder either continues to follow the trail as planned, or they veer off.

Card issuers refer to the start of the climb as “early month on book” (EMOB), which covers a cardholder’s first 90 days. The term “customer retention” then refers to the inherent challenges on the way up and how to prevent any veering off.

If a card is to reach “top of wallet” status, the cardholder needs to keep transacting by staying on trail. But card issuers have often struggled to balance both their EMOB and customer retention strategies. Sometimes, they are not aware of any veering until it is too late and the profitability of the card portfolio is already eroded.

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Awareness of the value of EMOB and the challenge of customer retention is nothing new. Frequent engagement with new cardholders over the first 90 days can make their long-term value up to three-times greater, according to a McKinsey analysis from 2016.

Yet eight years on, the question remains: How to engage and retain cardholders to keep them transacting?

The answer comes from the transaction data itself.

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