Auriemma Launches Co-Brand Cards “Checkup” Service For Retailers

LONDON--(BUSINESS WIRE)--Credit card and pre-paid co-branding remains a critical income line for retailers. But with the increasing challenges of the credit crunch, banks are reigning in marketing investment and reducing the value of the proposition to consumers, meaning this income is under pressure just when retail sales are dropping.

“Deals made in more benign times are seeing value erosion, reduced card usage, less profit for the retailer, and a poorer value proposition for consumers”

In response, the Auriemma Consulting Group (ACG) has launched a “health checkup” service for retailers to help them evaluate co-branded card programme performance and identify options for improvement. It builds on a service that has been utilised by the vast majority of card issuers in the recent years.

“Deals made in more benign times are seeing value erosion, reduced card usage, less profit for the retailer, and a poorer value proposition for consumers,” said Matt Simester, ACG director in London. “A co-brand check up makes sure the programme is performing, and that the rewards remain competitive in the marketplace.” Co-brand cards are an important channel to drive more retail traffic to the merchant’s own stores or online, as well as being a revenue generator in their own right. With consumer spending on the decline, retailers need every advantage to increase sales, Simester said.

A co-brand checkup is a focused strategic analysis of the programme. ACG consultants examine contracts, acquisition performance, and revenue sources and determine if the deal is achieving the goals that were envisioned at the outset. Using insight gained from over 24 years in the co-branded cards market, ACG measures performance against comparable programmes. The rewards package is evaluated in light of changed market conditions to ascertain if the customer value proposition is still competitive and appropriate. ACG also forecasts the future financial value of the deal.

If changes are recommended, ACG can assist brand partners and issuers through the contract renegotiation and renewal process. It also assists retailers looking to launch pre-paid or credit card programmes. For example, ACG helped salvage a one-sided co-brand partnership by renegotiating the agreement midstream to the satisfaction of both parties, while minimising disruption to the programme. Afterward, the portfolio grew dramatically, the contract was subsequently renewed multiple times, and the partner realized a £33 million profit improvement annually.

Over three decades, ACG has developed more than 125 alliances for companies such as Harrods, British Airways, and Marks & Spencer. ACG is one of the few consultancies that can evaluate co-branded deals from the perspective of all three main participants in the programme: the merchant partner, the bank card issuer, and the cardholder.

About the Auriemma Consulting Group

Since 1984, ACG has offered comprehensive management consulting, consumer research, and industry roundtable and benchmarking services to the financial services industry. ACG clients include credit card issuers, commercial banks, vehicle and mortgage lenders, merchants, networks, and industry vendors. Areas of expertise include alliance development, marketing, collections, operational effectiveness, customer service, risk management, knowledge management, strategic planning, financial strategies, benchmarking, and litigation support. With offices in New York and London, ACG offers actionable solutions to help clients make important business decisions to maximise their efficiencies and revenues.