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Andrew Davidson 
Susan Menke 
Susan Wolfe 
Lisa Hronek Archive for June, 2010
Oil spill hurting travel industry on Gulf Coast
As the oil spill continues to wreak havoc on the Gulf Coast and BP’s reputation, business owners along the gulf coast are already seeing business drop dramatically as travelers determine different vacation plans to avoid a leisurely beach stroll over globs of oil and tar.
With the Memorial Day past us, and children about to be out of school for summer, businesses are struggling with how to deal with an issue they can’t control: the oil spill.
A recent article on CNN discussed how hotels, rental, resorts and motels have seen a decline in inquiries and bookings over the last few weeks, as individuals anticipate the worst case scenario from the spill. Businesses fear that travelers assume the oil spill has hit land and created an unpleasant environment for vacationing. Because of this, many hotel owners are encouraging families to post pictures of their trip to show family and friends that the oil has not hit land yet, and some are hoping to put live video feeds of the beach so individuals can see for themselves how the area looks.
What approaches have you seen businesses take to try and encourage travel to the area? What would you recommend be done to salvage travel to the gulf coast?
I’ll keep you posted if we see any direct mail or email in the Comperemedia database pertaining to travel, the oil spill and the Gulf Coast.
Changes to Medicare direct marketing may be coming
There are rumors that Medicare is going to experience significant marketing changes.
According to a report from a CMS User Call, the Annual Enrollment Period (AEP) will remain unchanged this year, from November 15, 2010 to December 31, 2010, for enrollment effective January 1, 2011. However, next year this will be changed to October 15, 2011 to December 7, 2011, for 2012 enrollments.
There is no indication that the window for marketing to Medicare participants will change. Currently that window opens on October 1.
Additionally, the Optional Enrolment Period (OEP) is going to be replaced with an Annual Disenrollment Period (ADP). With this conversion, the consumer will only have the option to change or drop their Medicare Advantage program. If they drop, they may enroll in original Medicare and elect a qualified prescription drug plan (PDP). This begins on January 1, 2011, so,no longer will there be a need to market after the December 7th date.
What will all this mean for marketing efforts? It seems there is going to be a very short, intense recruitment period at the end of the year.
In the past several years, Mintel Comperemedia has tracked significant growth in what has been a six month, October to March, Medicare mail period during AEP and OEP. Last year continued a pattern of large mail volume increases by posting a 24 percent increase over the same period the year prior.
Have you made plans to adjust your marketing campaigns for Medicare, especially if the marketing period shrinks?
To learn more about Medicare marketing, contact www.comperemedia.com. We can use our database of direct mail, email, print and online advertising—combined with expert insight—to help you understand and anticipate marketing trends.
Q&A from “One Year Later: The Impact of the CARD Act”
Thanks to all who listened in on my webinar with Nielsen’s Brian Schlessinger last Thursday (June 10). We experienced audio issues during Brian’s portion of the webinar, so I apologize for any inconvenience.
To make the recording better quality, we’ve re-recorded the webinar (minus the Q&A session). You can access the new recording and the slides here: http://tinyurl.com/2duguqf.
We did have many great questions asked during the webinar and I’ve responded to all of them below. Please contact me at ADavidson@Mintel.com or visit www.comperemedia.com if you have any questions.
Q. I’m curious as to how “Revolvers” were defined by Mintel.
A. Revolvers were defined as those who typically carry a balance from month to month on their primary credit card.
Q. What triggered consumer suspicion about a decrease in teaser rate offers and balance transfer offers? What was different in actual CARD Act that negated those concerns?
A. The new payment allocation rule in which payments, above the minimum due, are allocated to the highest APR balances first caused many to suggest that the industry would not be able to make money from teaser rates and we would see a reduction of teaser rate offers in the mail. This didn’t materialize and, in fact, most offers tracked by Comperemedia promote either a teaser rate for purchases or balance transfers. Issuers have navigated the payment allocation rule by increasing fees for balance transfers with many now charging 4% or 5% of the check amount. They have also increased APRs for purchases despite the low prime rate.
Q. Once these new regulations are fully digested, what do you see as new potential loopholes issuers may take advantage of?
A. In its relatively short history, the card industry has adapted to change successfully. We have already discussed the increase in go-to purchase APRs and BT fees. During the past two years, the industry as a whole scaled back to focus on only the most profitable customers. As competition increases, card issuers will need to continue to be creative to find new ways to promote their products while increasing revenues. Comperemedia will be assessing how they do this in direct mail, email, online and print advertising during the coming months. (Learn more: www.comperemedia.com.)
Q. What do consumers need to watch out for?
A. Consumers will start seeing more offers in the mail as the competition heats up. Terms are more transparent and it is easier to compare one offer with another due to the new Schumer Box format. If they are looking to transfer a balance, they should pay close attention to BT fees and not just the duration of the intro period. In a post-CARD Act world, the better the offer, the higher the BT fee.
Q. What has been the impact of the CARD Act on Small Business cardholders, considering those cards are exempt?
A. Small business cards are exempt and there was some speculation last year that issuers would redirect their efforts towards the small business market. This didn’t happen on a significant scale and volume levels remained comparatively low. Activity did start to pick up towards the end of the year although the pattern in business cards lags behind what we see in consumer. Capital One has been a key driver in recent months along with Chase and American Express. At some point we may expect legislation regarding small business cards.
Q. What forms of media would be best to get the positive PR about the CARD Act out to consumers?
A. Education needs to be on-going and some media are better at communicating on-going messages than others. More recently, financial institutions have turned to blogs to develop an on-going dialogue with consumers. Citi established a new blog (http://new.citi.com) to help rebuild its image in the wake of the financial crisis. Wells Fargo has been cautiously navigating the Wachovia integration through various tools including a dedicated blog (http://blog.wellsfargo.com/wachovia). A more traditional format is newsletters. Statement inserts should also play a key role. As a result of the CARD Act, more consumers are paying attention to their statements and this presents an opportunity for dialogue.
Q. What is the estimated financial loss to the credit card industry as a result of the CARD Act?
A. This will be difficult to calculate. The new regulations came at a time when the industry was already at a low point due to the recession. Signs indicate a return to profits for many industry players.
Q. Will mail volume continue to grow related to the CARD Act?
A. Yes. The recent increase in mail volume is being driven primarily by Chase. Some issuers, such as Bank of America and Discover, are still mailing at relatively low levels which means there is plenty of slack to be taken up. We anticipate acquisition mail volume reaching 3-4 billion this year, up from around 2 billion last year, but still much lower than the 7-8 billion seen during the boom years.
Season finale of “Lost” or Verizon advertising event?
Recently we saw the end of an era for ABC with the series finale of Lost. However, it seemed to be what Verizon hoped for with a marketing blitz focused on the company’s wireless network and a variety of smart phones.
The night started off with a pre-show and Verizon using Lost-themed commercials to air farewell messages from Verizon customers who wanted to say goodbye to the show and its characters. I thought this approach was a very creative way to strengthen loyalty with customers and to provide an outlet for the many Lost fans saddened by the show’s end.
When the series finale started, there was a shift in ad focus as spots were more likely to promote the network and specific smart phone products such as the HTC Droid.
At the end of the night, I think I saw as much of Verizon as I did Lost itself. I kind of wish I took the time to count the number of commercials that aired (maybe I should find someone who has it on DVR and watch it again?)
Did any of the Verizon ads convince you to switch providers or upgrade? Let me know your thoughts.