Posted by: Aadisht on: August 21, 2007
Mature (and maturing) credit card markets have a problem: they’re running out of metals to name their card brands. Silver has been used. So have gold and titanium. And now platinum. What’s next?
This is what happens when you have too many banks chasing too few customers. The cycle starts off when the market is first introduced to credit cards. A ‘Classic’ is offered to the mass market, ‘Executive’ or ‘Silver’ to the premium mass market (anyone with a better credit score), and ‘Gold’ by invitation only.
What happens next is simple: one particular bank will decide to ramp up marketshare. So it offers Silver cards to the Classic cardholders, Gold cards to the Silver cardholders, and a co-branded gold card with more features, or some entirely new metal to the old cardholders.
In the next stage of the cycle, all other banks do the same thing just to keep up with the competition. So eventually classic cards fall off the market, followed by silver, and then by Gold. I saw this up close in Singapore, where even Platinum now has so little exclusivity that you can ring up phonebanking and ask for a platinum card to be delivered to you the next day. India is not as developed a retail finance market, so Platinum still has some brand value. Platinum cards aren’t advertised. A platinum card is by invitation only. The invitation goes to select, obscenely wealthy customers. A platinum card has a whacking great annual fees (which will be waived if you’ve got enough assets under management, but I digress). It has brand value. It has a cachet.
Or rather, it had. Platinum cards are now going mass market in India too. It all started with HDFC bank advertising its Platinum Plus card (which, incidentally, is coloured deep green and not platinum) on hoardings of all things. Amex and StanChart’s product managers were probably cursing at the unmitigated brand dilution. The catch up cycle has now started. SBI has launched its platinum card. StanChart and Amex are still trying to maintain exclusivity, but Citi has succumbed and brought Platinum to the mass market.
And this act of Citibank is where the blogpost shifts gears and moves from putting learnings and fundaes about credit card marketing to describing my personal tragedy.
Barely a month ago, Citibank gave me a free-for-life Jet Airways Gold Card (a cobranded gold card being free for life is itself evidence of brand dilution). This card gives you Jet Airways miles instead of reward points (which is good, because Citi reward points can only be redeemed for totally crap stuff at indiaplaza.in). My monthly spend won’t generate enough miles to redeem for a ticket, but the card still has one invaluable advantage: it lets me check in at the business class counter even if I’m traveling economy. Anybody who’s faced the queues at Bangalore airport knows that this is not to be taken lightly.
Unfortunately, Citi got caught up with catching up, and launched the Jet Airways Platinum card. This is a card with the same features and miles benefits as the Gold card. And starting next month, the Gold card’s features will be downgraded to the features of the Jet Airways Silver Card. The upshot is, unless I swap to the Platinum card, I can no longer jump the check-in queue. As Ravages would put it, woe, fucking woe.
Brand dilution is immensely tragic.