integrative solution for bmo credit card
DESCRIPTION
TRANSCRIPT
BMO Credit Cards: An integrative solution
Tatjana | Jen | Ramanan | Andrew | Pramod
Team 28
Salient Features:- ability to customize credit card-additional marketing
Salient Features:-variety of reward programs-core competency
Issuing Institution
Customers Master Card Partners
How can BMO improve efficiency and customer service?
BMO FLEX
MasterCard®
Flex Card
Causal Model: Customer Retention & Acquisition
Snob Value
EMOTIONAL NEEDS
SECONDARY NEEDS
BASIC NEEDS
• Exclusivity
• Dealing with trustworthy party• Control/track expenses
• Reward/loyalty program• Convenience of shopping
• Conduct transactions• Delay actual cash outflow• Short term loan
Elite Cards
Multiple cards
Snob Value
EMOTIONAL NEEDS
SECONDARY NEEDS
BASIC NEEDS
Causal Model: Customer Retention & Acquisition
Emotional Needs
• Cherry pick/add/drop rewards• Dealing with trustworthy party• Control/track expenses
Elite Cards
Credit Card Application & Usage Process Flow: Decomposition
1. SEARCH- Review alternatives &
identify the best fit
Model 2
2. APPLY- Branch / Kiosk /
Online
Model 1/2
3. APPROVAL PROCESS
- Issuing institution
Model 1/2
4. USE- If approved: Start
using the card
Model 1/2
5. REDEEM POINTS
Model 1
6. MODIFY PLAN- Opportunity to update the plan
Model 1
Step 2: Application Process
FIRST STAGE – Model 2
- User is matched with most suitable plan
- Interface fields are prepopulated with default information
SECOND STAGE – Model 1
- Allocation units are used to customize the plan
- Units: base amount + reward for credit card loyalty + reward for additional products with BMO
BMO Flex Card InterfaceTotal Allocation Units: 1,000 Additional Cost: $0
SPEND: EARN:
- Grocery Points: þx 1 ☐ x 2
- Air Miles: ☐x 1 ☐ x 2 + Car Rental Insurance+ Road Side Assistance- Interest rate:
- þ Market research- Receive
promotional offers (emails):
þ10/month ☐20/month
Grocery points: 2,000Air Miles: 24,000
POINTS STATUS:
19%
Steps 3 & 4: Approval & Use
• Similar to Model 1 & 2 process• The applicant is either approved or rejected3. Approval
• Model 1 & 2: If approved - start using the card• Model 1: 2-weeks grace period: opportunity to
modify the plan4. Use
Steps 5 & 6: Redeem Points & Modify Plan
• Similar to Model 1 process• Close match with the reward system• Rewards are useful & can be redeemed quickly
5. Redeem
• Builds on Model 1 customization• Opportunity to modify the plan after one year• Customers have different needs during different
stages of life• No need to switch to a different card
6. Modify
What are the barriers to the integrative solution?
Set-up costs are sustainable
What would have to be true
for the proposed model to work?
No loss of customers due
to complications
Partners can accommodate
annual changes
Customers will not perceive
new process as complicated
BMO
Partners
Customers
How to determine if the statements hold true?
• Identify any existing interfaces that can be used for the Flex Card
• Obtain quotes for additional development and assess development time
• Assess cost of training employees• Complete cost benefit analysis
Testing the interface set
up
• Conduct a pilot project and invite selected existing customers for trial
• Maintain feedback loop to allow customers to comment on service
• Invite new customers to sign up for the service and begin phasing out existing cards
Testing complication
of process
How does Flex Card Create Stakeholder Value?
Customer
Issuing Institution
MasterCard
Partners
Model #1Branded
Proposed SolutionFlex Card
Model #2Bank Issued
How does the Flex Card Add Value to BMO?
• Easy to bring new features/rewards to market• Marketing and promotion• One card replaces multiple cards
Increased Efficiency
• Incentive for customers to use Flex Card• Increased card loyalty• Revenue from new partners
Higher Profits
CUSTOMERSPARTNERS