Cards increase VIP experience programs
By Fred Williams
"You're boring," his date says, "boring!"
So the guy in the Citibank ad uses his Citi card and the company's "Private Pass" service to get tickets to an Alicia Keys concert, where he meets the singer backstage. Take that, Ms. Bored.
Citi and other card companies are stepping up special offers for cardholders, using their leverage as event sponsors to give ordinary customers VIP-type perks.
Such unique experiences, termed "experiential rewards," can be enriching, but the good times come with an asterisk, budget experts say: Remember that these pitches, unlike points deals and travel discounts, usually help you spend money, not save it.
"If it's something you would have done anyway, it makes sense," said Sandy Shore, consumer finance expert with Novadebt, a nonprofit credit counseling agency. But you should question the impulse to spring for an event just because it is available through a special offer, she added.
Some other examples of experience-related card offers:
- MasterCard unveiled its "Priceless Cities" program for exclusive events in 2011, starting with New York. The program is open to MasterCard holders, with a separate tier of experiences available for World Elite card holders.
- Visa's "Visa Signature" benefits program, aimed at affluent customers, offers perks "beyond the points, miles or cash back you already earn" with participating cards. Currently highlighted are complimentary wine tastings at vineyards around California's Sonoma County.
- Chase's premium travel rewards card Sapphire won a 2011 award from the Public Relations Society of America for boosting its "experiential awards" program with once-in-a-lifetime experiences. Offers include golfing with pros like Stewart Cink and lodging and ticket packages for the Sundance Film Festival, for rewards points or cash. Coming up is a chance to "rub elbows with celebrities" at the taping of the Annual American Giving Awards in Los Angeles.
And Citi's Private Pass service, launched in 2008, is offering VIP packages, preferred seating and other perks to holders of Citi cards, with thousands of events annually, spokeswoman Emily Collins said. The Alicia Keys concert portrayed in the ad had its basis in an event for Citi AAdvantage cardholders, Collins said, where some seats cost more than $100 each, and several concert-goers did get to meet the performer. Coming up are pre-sale tickets for a Gregg Allman show in New Orleans and the band Maroon 5 in Detroit.
Kevin Maltz, a pediatric dentist in Connecticut, doesn't have much in common with the jilted guy in Citi's ad. But he and his wife do enjoy getting backstage access to the 24 Hour Plays experience through Private Pass. The event involves writers, directors and actors -- sometimes marquee names such as Demi Moore and Kevin Spacey -- who conceive, write and perform six short plays under a 24-hour deadline. The New York audience watches the performance at the American Airlines Theatre. Wth special access through Private Pass, plus a fee of about $5,000, the Maltzes get a much closer look, joining the initial meet-and-greet that kicks off the event, then seeing the creative process unfold.
|A 'KEYS' PERK FOR CARDHOLDERS|
Credit card issuers are ramping up their offers of VIP "experiential rewards" to attract and retain customers. Citi, for example, boasts in an ad (screenshot above) that some of its Private Pass members got a chance to meet singer Alicia Keys. (Click image to enlarge.)
"They treat you like one of the cast and crew," says Maltz, who has participated in four of the events since 2007, three in New York and one in Los Angeles. "To watch something go from nothing to a performance in 24 hours is amazing." The fee benefits a charity that provides arts programs in underserved schools, taking an edge off the expense.
Events through other card programs can also impose a hefty pricetag. MasterCard holders in Chicago can pay $2,000 to have the observatory atop the John Hancock building all to themselves for an after-hours "Midnight Toast" through Priceless Cities-Chicago. The romantic view might be a good setting for getting on one knee and popping the question, the company suggests.
Enticements with special events are not a new way to build customer loyalty. American Express, with its roots in travel services, claims to have pioneered the strategy before charge cards or credit cards were even around. It offered members an exclusive around-the-world cruise back in 1922. Deals on travel and hotels are a longtime staple of card perks.
"We like to say it's in our DNA," AmEx Public Affairs Director Elizabeth Crosta says. When offered apart from points programs, exclusive events don't generate usage of cards and the subsequent revenue. What they do, Crosta said, is strengthen ties with customers, building loyalty. "Typically we charge enough to cover the cost of the event, but not make a profit," she said.
American Express is known for its ultra-exclusive services for affluent users. Its Centurion card comes with vaunted concierge service and entree into invitation-only events, such as seats on a yacht to watch the start of the America's Cup. This tier of exclusivity, with events restricted to about 50 people, remains beyond the reach of mainstream cardholders. You don't apply for a Centurion card, Crosta said; like the events, the card is by invitation.
But as cards broaden their event programs, you don't need to be part of the 1 percent to get access to things that not everyone can enjoy. AmEx has tiered experiences open to Gold Card members and others for all members offering "behind the velvet rope" experiences, company materials state. Costa herself is looking forward to seeing the hot show "The Book of Mormon" from second-row seats, with an assist from her Gold Card.
At Citi, there is no application needed for Private Pass -- Citi card members just check the website for events, some of which are free. "We want to offer something for everyone in our broad and diverse customer base," Collins says. And you may already have access to Visa's Signature program, if your card is from one of the dozens of issuers that are enrolled -- check the front of your card, Visa recommends.
A few glitches
That said, not all experiences are as slick as they look in a TV ad. Online critics gripe about glitches, such as problems booking pre-sale tickets through online ticketing sites. But some cardholders are pleased enough with their experience to give it raves as well. Joe Marrow, a music lover in Rochester, N.Y., crowed about getting scarce concert tickets for both Rihanna and Lady Gaga through Private Pass.
There's a way that being seen is more valuable than money.
Consumer psychology expert
unique experiences highly, and can prize them more than long-lasting objects, marketing experts say.
"There's a way that being seen is more valuable than money," says Kit Yarrow, chair of the psychology department at Golden Gate University in San Francisco and an expert on consumer psychology. Having sideline seats for a sporting event is not just an exclusive perk, but a highly visible one. The beneficiary gets the added boost of seeing star players close up -- and perhaps rubbing shoulders with other stars in nearby seats.
Having special access is "the last frontier in exclusivity," she says. "It's today's version of the Dior handbag."
Some retailers are also using events to build loyalty, holding wine-and-cheese parties for top customers. While status-conscious shoppers may be satisfied with swinging a designer purse, luxury brands are more widely available than they used to be, Yarrow said. Moreover, exclusive events are safe from imitation by knock-offs that dilute their cachet. "People increasingly want to be a star," she said.See related: Rewards points auctions offer once-in-a-lifetime experiences
Published: November 20, 2012
- 7 tips for using online alternative business lenders – When banks turn them down for loans, small businesses are increasingly turning to online "alternative" lenders. The loans they provide can be a lifeline, but higher interest rates mean you should proceed with caution ...
- 'Green' your spending with eco-friendly cards – A handful of banks offer socially conscious credit cards that donate a percentage of your spending to environmental causes ...
- Alternative lenders offer cheaper loans for more of your data – If you're looking for a low rate loan, new startups are filling that gap, but require more data than what's on your credit report ...