Competitive Credit Marketing
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Pulsar Marketing
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By Pulsar Marketing
Published on 08/21/2007
The competitive credit marketing strategy used by card issuers and loan lenders.
Credit Marketing to Bad Credit Consumers
In a previous article about credit card marketing, Pulsar Marketing presented its opinion on fairness policies and for the disclosure of credit terms. In that opinion, Pulsar Marketing stated: "...lenders relax their policies, terms and conditions in order to compete against the other lenders who are doing likewise".
What did Pulsar Marketing mean by that statement?
Credit is a competitive market. Lenders and card issuers have to battle against other lenders and card issuers to attract your attention and to secure you as a customer. Given the hurried attitude of many consumers, the lenders and card issuers who present the best 'offer' via a general declaration (without all the jargon, explicit terms, conditions, etc), will typically gain the customers.
Look at it this way... There are two hot dog vendors; side by side, on a street corner. Both vendors sell the exact same type of hot dog and at the exact same price. Which would you buy from?
Although both hot dogs are exactly the same, the first one sounds better because it uses 'less revealing' disclosures.
The first ad uses Latin for 'insect' and for 'rodent hair'. It's disclosure about its protein and value are also less revealing. It merely says that it's protein and cost-per-pound value is "not equivalent" to higher grade meats.
The second ad uses direct, easily understand terminology. It clearly states it may contain insect parts and rodent hairs, and even shows how it's value is far less than higher grade meats.
The reason advertisers prefer to use less revealing terminology about their short-comings is clear. Not only does it make their product/service sound more appealing to consumers, but also because other advertisers are using these marketing methods. Hence, for competitive marketing, they must resort to the same tactics as other advertisers in order to gain your business. And face reality... do you really, really want to know what goes into the food you eat? Do you aggressively seek a hot dog with rodent hair? Of course not. And so advertisers present you with what you are looking for. You want a tasty hot dog, and that's what they offer (plus some extra ingredients).
Creditors are no different. Bad credit consumers go online to find bad credit cards and bad credit loans. To attract those customers, they have to key on what the consumer wants. If they do not use any language such as 'bad credit' on their websites, then consumers won't be directed to them via search engines like Google. Instead, they'll be directed to those creditor websites which do have the words 'bad credit' on them. Since consumers do not search for a 'bad credit card with only a $300 credit limit', creditors do not focus on those advertising words, no more than a hot dog vendor would focus on the advertising words 'hot dog with rodent hair'.
Is it the responsibility of hot dog manufacturers to blurt out "this hot dog may have insect parts in it!" just before each consumer takes a bite? Of course not. They are responsible only for listing such on their packaging. And if it's unclear, consumers have the right not to buy. Credit is much the same. Creditors will disclose the terms and conditions, and it's up to consumers to understand those terms and conditions. Additionally, consumers must be cognizant that creditors must compete against other creditors. The competition may impact the terminology each uses, and that those word choices are often to match current consumer desires.
What did Pulsar Marketing mean by that statement?
Credit is a competitive market. Lenders and card issuers have to battle against other lenders and card issuers to attract your attention and to secure you as a customer. Given the hurried attitude of many consumers, the lenders and card issuers who present the best 'offer' via a general declaration (without all the jargon, explicit terms, conditions, etc), will typically gain the customers.
Look at it this way... There are two hot dog vendors; side by side, on a street corner. Both vendors sell the exact same type of hot dog and at the exact same price. Which would you buy from?
Although both hot dogs are exactly the same, the first one sounds better because it uses 'less revealing' disclosures.
The first ad uses Latin for 'insect' and for 'rodent hair'. It's disclosure about its protein and value are also less revealing. It merely says that it's protein and cost-per-pound value is "not equivalent" to higher grade meats.
The second ad uses direct, easily understand terminology. It clearly states it may contain insect parts and rodent hairs, and even shows how it's value is far less than higher grade meats.
The reason advertisers prefer to use less revealing terminology about their short-comings is clear. Not only does it make their product/service sound more appealing to consumers, but also because other advertisers are using these marketing methods. Hence, for competitive marketing, they must resort to the same tactics as other advertisers in order to gain your business. And face reality... do you really, really want to know what goes into the food you eat? Do you aggressively seek a hot dog with rodent hair? Of course not. And so advertisers present you with what you are looking for. You want a tasty hot dog, and that's what they offer (plus some extra ingredients).
Creditors are no different. Bad credit consumers go online to find bad credit cards and bad credit loans. To attract those customers, they have to key on what the consumer wants. If they do not use any language such as 'bad credit' on their websites, then consumers won't be directed to them via search engines like Google. Instead, they'll be directed to those creditor websites which do have the words 'bad credit' on them. Since consumers do not search for a 'bad credit card with only a $300 credit limit', creditors do not focus on those advertising words, no more than a hot dog vendor would focus on the advertising words 'hot dog with rodent hair'.
Is it the responsibility of hot dog manufacturers to blurt out "this hot dog may have insect parts in it!" just before each consumer takes a bite? Of course not. They are responsible only for listing such on their packaging. And if it's unclear, consumers have the right not to buy. Credit is much the same. Creditors will disclose the terms and conditions, and it's up to consumers to understand those terms and conditions. Additionally, consumers must be cognizant that creditors must compete against other creditors. The competition may impact the terminology each uses, and that those word choices are often to match current consumer desires.