How to Create a Co-Branded Card

Co-branded credit cards have become very popular recently. These cards usually carry the logo of a credit card company like Mastercard or Visa, as well as the logo of a retailer, airline, oil company or other business. The cards also usually offer rewards or other benefits to the cardholders who use them, and usually increase customer loyalty to the issuing organizations. If you're thinking about introducing a co-branded card for your organization, here are the steps you'll need to take.

Co-branded Card Development

1. Step 1

Define a value proposition that will be compelling to the cardholder. With many different co-branded cards already available, your card will need to offer the cardholder something unique. It should offer valuable benefits that are not widely available elsewhere, but that will still be economical and affordable for you to provide.

2. Step 2

Develop a list of potential issuing partners, e.g. banks or financial institutions that have experience with co-branded cards and are looking for new marketing opportunities. Contact these organizations to determine their level of interest and narrow your list to the most likely three or four prospects.

3. Step 3

Develop a marketing plan and budget for your card. The marketing plan should define the size and composition of your target market forecast the number of cardholders you expect to acquire in the first year after the card's introduction. The budget should include the marketing expenses you will commit to develop and introduce the card and and any additional operating expenses you expect to incur as a result of its introduction.

4. Step 4

Prepare a request for proposal (RFP) for your co-branded card, aimed at your list of potential card issuers and send it to them. Then meet with them to discuss your RFP. Determine the value that each can add to your program and the resources they are willing to commit to it. Discuss their existing co-branded card programs and credit policies, and determine the level of success they have had. Ask them to furnish you with formal proposal that includes a written description of the human and financial resources they would commit to your program.

5. Step 5

Review the proposals submitted by each potential issuing partner and determine which one brings the most to the table. Once you have made that decision, contact them and develop a formal contract that defines the roles that each party will have and the financial obligations that each will incur.Negotiate your differences, finalize, and sign the contract.

6. Step 6

Develop a card design and marketing materials. These should include a direct mail package that you will send to your customer base and "take-one" applications for the card that will be distributed in your stores or in other places where your existing and potential customers can easily obtain them. Prepare some print, radio and/or television ads to introduce your new card to consumers. Then, launch your new card by issuing a press release, sending direct mail solicitations and distributing the take-one" applications for the card. Analyze the results after 90 days and determine if they are meeting your expectations, and what, if any, changes to your program may be necessary.

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