Credit Cards CONJOINT

Directions for the development of new products and adjustment of the existing propositions

The Challenge:
Our client has requested a market research study in order to provide directions for the development of new products and adjustment of the existing propositions of credit cards.

The Client wanted to fine-tune credit card acquisition strategy aimed at attracting new customers and at the same time boosting the loyalty of the current ones via offering best total value offer for credit cards.

The research objectives were to identify which are the most important factors influencing the customer choice of credit cards and to understand what is the relative importance of each factor, to evaluate the partial utility of card attribute levels, to identify the card offer which best performs within different target groups and to identify opportunities for current credit card improvement based on the total utility score.

The Approach:
We designed a quantitative survey – CONJOINT / Discrete Choice Analysis:

to calculate the choice data, main effects and joint effects as well as relative preference (how many times a concept including that level is chosen, divided by the number of times a concept including that level appeared in the choice task).

to determine the best combination of items.

The Outcome:
When directly questioned, there was no clear preference with regards to monthly vs. annual interest rate regardless of respondent profile by card usage and personal income.
By calculating the CONJOINT relative factor importance, however, the standard interest rate was much more significant with almost double importance compared to all other factors. The annual fee, interest promotions and cash-back were in a group of second most important factors
Different types of insurances and grace period have low relative importance.

We outlined the offer that generates the highest reach if launched alone. In addition it has participated in all wining coalitions as a main donor if portfolio of two or three cards is considered. It presents a monthly instead annual interest rate – thus, a conclusion can be made that monthly interest rate drive higher preference.