Customer Loyalty Engagement Index

Transcription

1 Customer Loyalty Engagement Index 2007 Category Report: Credit Card Prepared For: Discover Financial i Services Second Quarter Update

2 Orientation to Brand Keys, Inc. The proprietary research methodology developed by Brand Keys, Inc. identifies the most important drivers of customer loyalty y in a given product or service category. These category drivers represent the attributes, benefits and customer values that determine the real choices that real people make when they are considering the various brands in any category. A Brand Keys assessment identifies, on a brand-by-brand basis, the factors that define a brand s equity and powerfully bond customers to the brands they use. The four key drivers of category loyalty that are identified describe the way in which customers view your category, evaluate brands within the category, and ultimately buy within the category. Moreover, we have considerable evidence that Brand Keys data provides leadingindicator assessments of a brand s future performance in the marketplace. Brand Keys, Inc

3 Description of the Customer Loyalty Engagement Index The Customer Loyalty Engagement Index (CLEI) is a syndicated service that provides a portion of the insights and learning available through a full, custom Brand Keys study. The CLEI was initiated in Utilizing our proprietary psychological assessment questionnaire, respondents rate: Their Ideal Brand in the category. One brand in the category that they personally use. Respondents also rate the importance to them of a battery of category-relevant product and service attributes, consumer benefits, and consumer values (ABVs). Rigorous statistical analyses (proprietary factor, regression, and causal path analyses) produce the leading-indicator metrics and insights that are provided by a Brand Keys analysis. Brand Keys, Inc

4 Ideal Credit Card The Brand Keys method produces 3-dimensional metrics that quantify: Ideal Brand in Category Discover Each Credit Card Competitor These 3 levels, or dimensions, of assessment include: 1. Loyalty Driver Order of Importance. 2. Loyalty Driver Percent-Contribution t ti to Overall Customer Decision (trial, re-purchase, and long-term loyalty). 3. Loyalty Driver Level of Customer Expectation. Brand Keys, Inc

5 The Three Dimensions : Ideal Credit Card (Summary Chart Data to be Explained Later) 1. Loyalty Drivers in order of importance. 2. % contribution to future purchase/loyalty. 3. Customer Expectation level for each Driver. Ideal 3 r Expectation Le evels Custome Rewards & Services = 29% Highest 1 Ease & Speed of Interactions = 25% Loyalty Drivers Od Order of Importance Fees & Flexibility = 24% Precision & Protection = 22% Lowest Brand Keys, Inc

6 Ideal Credit Card: Importance of Brand Loyalty Drivers The four most important drivers of brand loyalty in the credit card category, along with their respective percentages of contribution to overall loyalty for the first two quarters of 2007, are as follows: 1Q 07 2Q 07 Rewards & Services 29% 30% Ease & Speed of Interactions 25% 25% Fees & Flexibility 24% 23% Precision & Protection 22% 22% As can be seen from the above, there have been no meaningful changes in importance from the first to the second quarters of 2007, indicating short-termterm stability on this measure. Brand Keys, Inc

7 Discover vs. Ideal Credit Card 130 # 128 # r Expectation Le evels * 109 # 108 Custome Rewards & Services = 30% Ease & Speed of Fees & Flexibility = Interaction = 25% 23% Loyalty Drivers Order of Importance Ideal Discover-1Q '07 Discover- 2Q '07 Precision & Protection = 22% Highest # = Significantly higher than the category Ideal at the 95% level of confidence. Also, an instance of Core Brand Equity (i.e., score equal to or higher than that of the Ideal). * = Significantly lower than the category Ideal at the 95% level of confidence. Lowest 7

8 Highlights of Second Quarter Update On a very short-term basis, that is, over the first two quarters of this year, the data are highly stable for both measures examined: 1. Loyalty Driver Importance: From F the first tto the second quarter, none of the top four brand loyalty lt drivers fluctuated by more than one percentage point. 2. Discover vs. Category Ideal: Similarly, customer perceptions of the Discover Card have not changed versus Q1 07: The Brand Still significantly outperforms the Category Ideal with respect to Fees & Flexibility, but falls significantly short of the Ideal on Precisions & Protection. Brand Keys, Inc