April 10, 2008
Budweiser Offers Loyalty Credit Card
By Tom Ryan
Anheuser-Busch has partnered with U.S. Bank to offer a Budweiser Rewards Visa Platinum credit card in the U.S. While card members won’t be redeeming six packs, they will be earnings points that can be used to redeem apparel, gifts and other items from Budshop.com and Budweiser Genuine Collection catalogs.
The Budweiser Rewards card allots three points for every dollar spent on Anheuser-Busch products – including online and catalog merchandise, brewery tours, as well as theme parks tickets and resort stays at Busch properties (SeaWorld, Discovery Cove, Busch Gardens, Adventure Island, Water Country USA, Sesame Place and Aquatica). One point is awarded for each dollar spent elsewhere.
New customers receive 1,000 points as a first-purchase bonus. For every 2,500 points earned, card members are automatically sent a $25 Anheuser-Busch Merchandise Gift Card, which can be redeemed for the wide selection of apparel, novelties, culinary and sports items available at Budshop.com and through Budweiser’s catalogs.
The cards will be marketed on both the U.S. Bank website and Anheuser-Busch sites. Card applications will also be available in U.S. Bank branches and in Anheuser-Busch brewery gift stores.
“We have an existing relationship with Anheuser-Busch,” Jackie Sperl, assistant VP of retail payment solutions for U.S. Bank, told DMNews. “We have ATMs at [Anheuser-Busch property] Sea World currently, so it’s just adding to our partnership with them. This is something that Anheuser-Busch wanted to do, and we jumped at the opportunity to partner with them.”
Mr. Sperl said direct mail and e-mail might also be leveraged to market the cards by targeting existing customers of Budshop.com and the brewer’s merchandise catalogs.
Most major retailers along with airlines and hotels appear to have rewards credit cards programs, as well as some niche smaller chains. But it’s rare for a consumer brand to have one. Many of the sports leagues, particularly the NFL and MLB, have rewards cards around teams. Two of the most successful branded credit cards are from Starbucks and Walt Disney.
Discussion Questions: What do you think of the potential for rewards credit card programs from vendors? Is this an opportunity for just a few brands such as Budweiser or Disney or is it a much wider opportunity?
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Sure, national brands will cement their relationships with consumers via financial instruments and entertainment, bypassing traditional retailers in loyalty building. I think it’ll get interesting when the finances and the entertainment aspects are merged.
A while ago, there was a Marlboro Miles catalog, with Marlboro-logo clothing and some other Marlboro-logo items. There still is a Marlboro Classics clothing line, by Valentino, but it has no major American presence. Budweiser has a big problem: the alcoholic beverage industry is highly regulated, so every ad medium opportunity has to be considered carefully. Why not have a catalog, a licensed clothing line, and a rewards credit card? Is there any downside? Why was the Marlboro catalog dropped? My guess: the tobacco company was concerned about negative pr.
This isn’t such a surprise, only the time it took for a major brand marketer like Bud to pick up on the idea. Retailers have learned about the loyalty they can bring to their stores, vendors now will as well.
It would seem, however, tie-ins with other vendors like Frito-Lay or ESPN would also be appropriate.
Forget the ever-present “corrupting youth” brigade, this will certainly draw the ire of the “I’m not a prohibitionist but” prohibitionists; and as much as it pains me to admit it, I would be sympathetic to their arguments: anything which implicitly encourages you to drink more (by explicitly rewarding it) seems like a bad idea.
What, no NASCAR tie-in? This is just another credit card with an interesting graphic unless Bud correctly identifies and pursues the audience for this type of offering. This is the financial arena, and expecting Bud consumers to be Bud Card users is naive. Allowing users to be self-selecting, i.e., choosing a Bud Card over others, will be insufficient for driving volume. Instead, only an all-out promotion will work. Like tying in with NASCAR. Oh, wait, they have their own card. Well, one less marketing opportunity for the Bud Card.
I sincerely hope that this didn’t cost Bud a great deal of money. Intuition suggests that it did not, and is an effort on the part of the bank to expand its product development. Even if they only sign up the 50,000 estimate another panelist suggests, if they can get 20 CPG firms to participate, well, that’s 1,000,000 new accounts. And if the CPG firm does the advertising (for strategic and branding reasons, well, it probably costs the bank very little to implement this program.
The value to Bud? Nil. As noted, the only people this will appeal to are those already firmly in the Bud fold. Marketing to your core is important, and making them feel good about being in the core is critical to continuing to hold onto them. The worst mistake anyone can make is NOT marketing to their core sufficiently to retain it. Will this make a core Bud loyalist feel better about themselves? Very questionable.
Tempest in a teapot. Loyalty programs are supposed to actually reward your best customers, not attempt to turn them into walking brand statements.
Good news–branded merchandise reinforces brand affinity.
Bad news–branded merchandise limits appeal to anyone but hard core brand enthusiasts.
Net result–warm fuzzy feelings for current brand buyers (and there is nothing wrong with that!) but not much in the way of new users and increased business.
Have I got this right? Your REWARD for paying good money to buy Bud is the right to WEAR their advertising material???!!! Now that’s what I call loyalty.
Americans are besieged with credit card offers. Add this card from AB to the thousands of affinity cards that already exist. In these economic times, it will be interesting to see how many Bud drinkers will opt to show their loyalty to the brand by carrying this card.
Loyalty programs are a great way to connect with your customer and track their spending habits. Bud’s offering of points for merchandise may be a little weak as the type of customers that wears Bud apparel is specific but they should consider expanding the program for redemption at its amusement properties as well. That would open up the target customer base considerably.
Great move–now they need to extend it to beyond just the cardholder base as I suspect US Bank will get maybe 50,000 members in this program…but the idea of being a ‘card carrying member’ of the Bud Army is appealing to a pretty attractive demographic. But Bud needs to figure out what Starbucks learned; that a PLCC (private label credit card) only-approach to loyalty isn’t today’s answer for getting to any sort of critical mass of membership….
What’s interesting will be what age restrictions are placed on the card. While minors cannot purchase alcohol, many (under 21) have at least one credit card. The strategy could be a youth marketing campaign in disguise…and if that’s the case, expect the “Bud Card,” at least for minors, to go the way of Joe Camel and tobacco rewards programs, once youth advocate groups and others get involved.
Going through my wallet I found loyalty cards for 3 sub shops, 2 coffee shops, 3 grocery stores, 2 hobby shops, 2 drugstores, and 3 bookstores. I don’t need another loyalty card, I’m just not that loyal of a consumer. If I am forced to take one to get a sale price at the register (CVS, Petland, Albertsons, etc.) I will do so.
Two of my credit cards offer incentives or ‘rewards’. Every year or two I cash in points and get a couple of giftcards or a promotional APR reduction. I prefer keeping a low balance on a low APR card and paying debit or cash whenever possible. I don’t shop around for cards and my current unused credit line on the cards I do have could pay off my house.
Aside from Sony and Diet Coke, I have little brand loyalty. A Chrysler rewards Visa didn’t entice me. Neither did a Ford Visa. I drink Budweiser, but it wouldn’t look very professional pulling that Visa out of your wallet to pay for the boss’s lunch.
This is about brand buzz, not building revenue. It is neither unique or creative. It’s SOP by by dozens of other brands. But, let’s not be too critical.
It reinforces their most loyal drinkers or wannabe drinkers. It may also create an additional revenue stream, and it further enhances their data bank. The opportunity to market the card to those too young to buy the product makes for an interesting proposition.
Nice idea for the hard core loyalist. A big yawn for the rest of us.
Serious brand loyalists already drink the same beer every day, and probably already have the t-shirt and keychain to prove it.
“How about that 18 year old with the new credit card from Budweiser…”
If Budweiser pays millions for 30 second ads, it seems the credit card ad would be a better investment. And if kids are old/responsible enough to have a credit card, they’re pretty much old/responsible enough to have a beer.
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Sure, national brands will cement their relationships with consumers via financial instruments and entertainment, bypassing traditional retailers in loyalty building. I think it’ll get interesting when the finances and the entertainment aspects are merged.
A while ago, there was a Marlboro Miles catalog, with Marlboro-logo clothing and some other Marlboro-logo items. There still is a Marlboro Classics clothing line, by Valentino, but it has no major American presence. Budweiser has a big problem: the alcoholic beverage industry is highly regulated, so every ad medium opportunity has to be considered carefully. Why not have a catalog, a licensed clothing line, and a rewards credit card? Is there any downside? Why was the Marlboro catalog dropped? My guess: the tobacco company was concerned about negative pr.
This isn’t such a surprise, only the time it took for a major brand marketer like Bud to pick up on the idea. Retailers have learned about the loyalty they can bring to their stores, vendors now will as well.
It would seem, however, tie-ins with other vendors like Frito-Lay or ESPN would also be appropriate.
Forget the ever-present “corrupting youth” brigade, this will certainly draw the ire of the “I’m not a prohibitionist but” prohibitionists; and as much as it pains me to admit it, I would be sympathetic to their arguments: anything which implicitly encourages you to drink more (by explicitly rewarding it) seems like a bad idea.
What, no NASCAR tie-in? This is just another credit card with an interesting graphic unless Bud correctly identifies and pursues the audience for this type of offering. This is the financial arena, and expecting Bud consumers to be Bud Card users is naive. Allowing users to be self-selecting, i.e., choosing a Bud Card over others, will be insufficient for driving volume. Instead, only an all-out promotion will work. Like tying in with NASCAR. Oh, wait, they have their own card. Well, one less marketing opportunity for the Bud Card.
I sincerely hope that this didn’t cost Bud a great deal of money. Intuition suggests that it did not, and is an effort on the part of the bank to expand its product development. Even if they only sign up the 50,000 estimate another panelist suggests, if they can get 20 CPG firms to participate, well, that’s 1,000,000 new accounts. And if the CPG firm does the advertising (for strategic and branding reasons, well, it probably costs the bank very little to implement this program.
The value to Bud? Nil. As noted, the only people this will appeal to are those already firmly in the Bud fold. Marketing to your core is important, and making them feel good about being in the core is critical to continuing to hold onto them. The worst mistake anyone can make is NOT marketing to their core sufficiently to retain it. Will this make a core Bud loyalist feel better about themselves? Very questionable.
Tempest in a teapot. Loyalty programs are supposed to actually reward your best customers, not attempt to turn them into walking brand statements.
Good news–branded merchandise reinforces brand affinity.
Bad news–branded merchandise limits appeal to anyone but hard core brand enthusiasts.
Net result–warm fuzzy feelings for current brand buyers (and there is nothing wrong with that!) but not much in the way of new users and increased business.
Have I got this right? Your REWARD for paying good money to buy Bud is the right to WEAR their advertising material???!!! Now that’s what I call loyalty.
Americans are besieged with credit card offers. Add this card from AB to the thousands of affinity cards that already exist. In these economic times, it will be interesting to see how many Bud drinkers will opt to show their loyalty to the brand by carrying this card.
Loyalty programs are a great way to connect with your customer and track their spending habits. Bud’s offering of points for merchandise may be a little weak as the type of customers that wears Bud apparel is specific but they should consider expanding the program for redemption at its amusement properties as well. That would open up the target customer base considerably.
Great move–now they need to extend it to beyond just the cardholder base as I suspect US Bank will get maybe 50,000 members in this program…but the idea of being a ‘card carrying member’ of the Bud Army is appealing to a pretty attractive demographic. But Bud needs to figure out what Starbucks learned; that a PLCC (private label credit card) only-approach to loyalty isn’t today’s answer for getting to any sort of critical mass of membership….
What’s interesting will be what age restrictions are placed on the card. While minors cannot purchase alcohol, many (under 21) have at least one credit card. The strategy could be a youth marketing campaign in disguise…and if that’s the case, expect the “Bud Card,” at least for minors, to go the way of Joe Camel and tobacco rewards programs, once youth advocate groups and others get involved.
Going through my wallet I found loyalty cards for 3 sub shops, 2 coffee shops, 3 grocery stores, 2 hobby shops, 2 drugstores, and 3 bookstores. I don’t need another loyalty card, I’m just not that loyal of a consumer. If I am forced to take one to get a sale price at the register (CVS, Petland, Albertsons, etc.) I will do so.
Two of my credit cards offer incentives or ‘rewards’. Every year or two I cash in points and get a couple of giftcards or a promotional APR reduction. I prefer keeping a low balance on a low APR card and paying debit or cash whenever possible. I don’t shop around for cards and my current unused credit line on the cards I do have could pay off my house.
Aside from Sony and Diet Coke, I have little brand loyalty. A Chrysler rewards Visa didn’t entice me. Neither did a Ford Visa. I drink Budweiser, but it wouldn’t look very professional pulling that Visa out of your wallet to pay for the boss’s lunch.
This is about brand buzz, not building revenue. It is neither unique or creative. It’s SOP by by dozens of other brands. But, let’s not be too critical.
It reinforces their most loyal drinkers or wannabe drinkers. It may also create an additional revenue stream, and it further enhances their data bank. The opportunity to market the card to those too young to buy the product makes for an interesting proposition.
Nice idea for the hard core loyalist. A big yawn for the rest of us.
Serious brand loyalists already drink the same beer every day, and probably already have the t-shirt and keychain to prove it.
“How about that 18 year old with the new credit card from Budweiser…”
If Budweiser pays millions for 30 second ads, it seems the credit card ad would be a better investment. And if kids are old/responsible enough to have a credit card, they’re pretty much old/responsible enough to have a beer.