Maybe the things that money can buy are pretty cool, after all.
For more than a decade, MasterCard Inc. has been preaching the value of things that "money can't buy." In an iconic series of heartwarming television commercials, the credit card company has performed a nifty trick, encouraging people to buy stuff and services with its card while also quietly insisting consumption is really just a way of helping create an environment for the "priceless" moments in our lives.
But as MasterCard rolls out a new promotional campaign in Canada that grants VIP access to rare experiences for its high-value cardholders, as well as a mix of discounts and privileges for everyone else, it is playing up the exclusivity of its offerings.
In doing so, it is making an aggressive move into marketing territory largely occupied by American Express, which has boasted for decades that "membership has its privileges," especially through programs such as its popular Front of the Line VIP access for live entertainment. MasterCard is also hoping to use the promotion to create a direct line of communication with its cardholders for the first time, rather than depending upon the banks and institutions that issue its cards.
"We think there's an opportunity for us to actually touch the consumer," said Lilian Tomovich, head of marketing at MasterCard Canada. "Certainly in the new age of digital and social media, there's no reason for us to be once-removed, and rely on that issuer."
Priceless Cities, which rolled out in New York last July and in London last month and which will launch in Toronto on Monday, offers MasterCard cardholders special access to products, services, and experiences in six categories: sports, culinary, retail and shopping, attractions, travel, and arts and culture. Cardholders deemed "high value" by the company – that is, people who carry its World Elite card – are able to book a shopping weekend at London's posh Goring Hotel (£750), or seats in the National Ballet of Canada's Royal Box for a performance of Romeo and Juliet ($300).
Non-elite cardholders may also book unusual activities, such as a "PGA Player Tour Experience" at the TPC Myrtle Beach golf course (for $779 U.S.) or a ticket to London's Brit Awards, or access a variety of discounts at local theatres and stores. Some are free, such as the Toys "R" Us Times Square Ferris wheel, and a children's movement class at American Ballet Theatre.
Because of limitations in technology, offers are currently restricted to residents of the individual countries, but MasterCard intends to make them available to all, providing an additional service for its cardholders who travel frequently.
The promotion comes as part of MasterCard's consumer-oriented evolution from a non-profit association to a publicly traded company in 2006. Until now, it has been handcuffed by the fact that its relationships with cardholders are mediated by banks and other issuers, presenting a major challenge in communicating with customers and – most importantly in this data-driven age – to learn anything about them and then use that information for marketing purposes.
It has always had access to aggregated data on its customers – it tracks the segments where people are spending their money, the average transaction size, and the frequency of transactions – but the Priceless promotion, whose first leg runs until the end of the year, is the company's initial step on a long road of gathering individualized information.
"That is a first for us, because we do have strict privacy laws in Canada. We're asking for permission to have an ongoing dialogue directly with them," Ms. Tomovich said.
"When they go on our website, they'll identify what experiences and offers they're interested in – culinary, sports, etc. – and then we'll serve them up, on a monthly basis, offers that are relevant to their preferences. Then, as we see the utilization of these offers – how many take them up and how many of them continue to spend in those categories – we'll continue to provide targeted, relevant offers to them in those segments."
All of which is relatively crude compared with the information that American Express has been compiling on its cardholders, and the levers that company can pull. For the moment, Amex says it is entirely unconcerned with the threat of competition, particularly for its high-end customers whose spending gives the company its highest margins.
"I don't even think about it," said David Barnes, the vice-president of advertising and communications at American Express Canada. "The tools we have at our disposal will be very difficult to replicate."
"We get to know [Centurion and Platinum cardholders]personally," he said. "Those people are calling in to the call centre, not just for transactions on their card, but to talk about things they want to do in their lives – whether it's taking a trip, getting tickets to a show, or us putting together [exclusive]events and offers. We're able to tailor them based on a very precise understanding of the things that our members like to do."
"You can't do that by guessing, or by doing broad-scale research and hoping you're hitting the button. It comes from experience over time of having that closer interaction with the customer."
Ms. Tomovich acknowledges there is no research explicitly supporting the belief that the Priceless program will translate into more affinity for the card. But she has some strong anecdotal evidence.
Last month, she said, MasterCard worked through its bank partners to find high-value customers who were interested in fashion, and invited a small group of them to Fashion Week in Toronto. "We had women in the front row [at the fashion shows]saying, 'This is reserved for World Elite members, and I'm not moving!' You'd better believe they're going to feel more in love with the MasterCard brand, and be more likely to spend on the card in the hopes that they continue to get invited to things like this."