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Ring: Barclaycard Turns Cardmembers into Company Stakeholders and Drives Up Customer Retention

 This is an entry in the B2C - Embracing category of the Forrester Research Groundswell Awards 2012. Visit the Groundswell site for more info

 

 

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Barclaycard Ring is the world’s first community-designed credit card.

 

Barclaycard has made a radical proposition with Ring: that being a cardmember means advising Barclaycard on how to administer the program and continuously improve its customer experience. To be approved for Barclaycard Ring is to join an inner circle of personal finance enthusiasts who can view Ring’s financial performance, influence company decisions with feedback and ideas, and share in the resulting profits.

 

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Ring community member Julia Roy says "I've been learning from other cardmembers every time I login to my account."

 

Convening regularly on the Ring website to use Lithium-powered social tools like idea-sharing and ask-and-answer, cardmembers are rewarded with points and status markers for advising Barclaycard and helping others. By structuring discussions in ways that help cardmembers weigh the tradeoffs involved with each business decision, Barclaycard helps community members think like the company stakeholders they are, making their advice and ideas more actionable. Barclaycard’s embrace of customer collaboration through a cardmember community has helped drive customer retention up 25% versus typical programs, and decreased customer complaints by 50%.

 

 

The Problem

 

There are things that banks don’t often do.

 

Banks don’t give customers transparency. It’s all fine print.

 

Banks don’t give customers a say in how the bank is run. The products are the products, and the rules are the rules.

 

Banks don’t give customers a share in the profits.

 

Banks don’t give their customers a social experience. You swipe your card, you check your balance on the website, you pay your bill… that’s it.

 

As a result, banks tend to have problems holding on to their customers. They’ve taught customers to jump ship as soon as they find a better rate.

 

And as a result, banks do not continually improve their products and policies. Their arms-length relationship with customers has kept them from learning what customers really want.

 

 

What Barclaycard Built

 

With Barclaycard Ring, launched in April 2012, Barclaycard is doing all the things that banks don't often do. While the card’s 8% rate is far more attractive than most credit cards, that’s not what has publications like Time calling Ring “radical” and Fast Company stating that Ring is “unlike any other credit card we’ve ever heard of.” Barclaycard has built a Lithium-powered community of Ring cardholders and enabled that community to congregate and connect using custom social tools at barclaycardring.com. While cardmembers discuss every financial topic under the sun at Ring’s social hub, the main purpose of the community is to assemble as product stakeholders to advise Barclaycard on what it wants from Ring.

 

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Community members who are passionate about personal finance frequently start new discussion topics in the Ring community.

 

As Barclaycard tells its customers: “It’s your card, why should we have all the say in how it works?” This is what makes Ring groundbreaking. It is, as Time writes, “an experiment in credit card democracy.”

 

 

How It Works

 

The mechanism that brings Ring cardmembers together and empowers them to influence business decisions is the social hub at barclaycardring.com. The Ring site is endowed with branded social tools such as:

 

  • gamification – points are earned for helping others with useful information, and badges are awarded for taking positive actions such as paying on time and going paperless
  • ideas – members submit ideas in a structured format that includes prioritization based on member voting, and status updates on what action Barclaycard is taking with an idea
  • ask-and-answer – members ask a variety of financial questions and receive useful answers from peers in minutes
  • discussions – members discuss timely personal finance topics, and award each other kudos for interesting insights
  • polls – members answer multiple-choice questions on card features such as fee structure and agreement terms, which, rather than merely being used as additional feedback, are considered to be votes in a final decision to shape these features
  • blogs and announcements – Barclaycard community managers and high-status members keep members up to date with the latest happenings in the community, including descriptions of how Barclaycard is taking action on members’ ideas and feedback

The member experience is enriched with visual indicators of member status. Each member’s avatar is displayed with a ring icon. As a member makes achievements in the community by contributing to the discussions and exhibiting positive behaviors like avoiding late payments, the ring icon is completed, section by section, with each section color-coded according to the type of achievement. Also key to the member experience are dashboards that show Ring’s overall performance. These dashboards, which show metrics like number of active accounts, average account balance, and questions answered in the community, help members understand the main drivers of Ring’s business. In these ways, Barclaycard is continually educating cardmembers on how their positive behaviors bring value for the entire membership, and how that value comes back to them in the form of shared profits.

 

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Visual indicators of community status help members see the connection between positive community behaviors and personal rewards.

 

Ring cardmember Julia Roy discusses in her popular blog how the Ring social experience has made her think differently about her use of a credit card: "Built into your online account is a community, blog and Giveback program. Because of this, I’ve been learning from other cardmembers and the Barclaycard Ring community every time I login to my account. A clear benefit for me so far has been that I actually get a good feeling when I pull the card out of my wallet to pay for something."

 

 

Keys to Success

 

Barclaycard closely manages its Ring community processes to ensure that customer ideas and feedback are being thoroughly evaluated and put to work in Barclaycard’s business. Several innovations and best practices have been important for maximizing success of the Ring community.

 

All cardmembers are financially incented to act in the best interest of the community, through their ability to share in Ring profits. As members discuss business decisions that will affect Ring’s financial performance, Barclaycard community managers remind them of the tradeoffs inherent in each decision. In some cases, these tradeoffs are explicitly built into the feedback-gathering process – for example, a community manager might ask members to discuss late fees, while setting the ground rule that Ring must impose some kind of disincentive for paying late, whether it be in the form of the fee or some other consequence. The notion that late payments hurt the community’s financial performance is further reinforced by the community dashboard, which shows the percentage of balances in good standing.

 

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Community members are given full transparency into Ring's performance, including metrics like purchases and balances.

 

Another key innovation has been the Giveback™ program, which gives individual members a choice between receiving their profit-share as a statement credit, or as a donation to a community-sponsored charity. Barclaycard recently held a community vote, where members chose the charities they would like to sponsor on an ongoing basis. By encouraging members to rally around a positive common cause, the Giveback™ program has further increased their emotional investment as community stakeholders. Giveback™ is part of Barclaycard’s overall strategy to align interests between cardmembers and the company.

 

The simplicity of the Ring product is also a success driver. This simplicity is evident in the interest rate of 8% (not 7.99% or 8.99%), and in the agreement terms, which number 1,038 words in contrast to the industry average of 7,125 words. But the simplicity is manifested in another important way: Ring was consciously designed to launch with a small number of features. This gives cardmembers a greenfield opportunity to shape the product with suggestions for new features.

 

 

Business Impact

 

The Barclaycard team has already taken action on over 50 crowd-sourced customer ideas, with many others being actively considered. Barclaycard has combined Ring with other voice of the customer initiatives to decrease customer complaints by 50%, and increase customer retention by 25%, resulting in an annualized benefit of over $10 million.

 

 

Paul Wilmore and the Barclaycard team endeavored to build a different kind of financial services customer experience.

 

"Barclaycard Ring is a fantastic example of how Barclaycard US drives to be a customer-focused company," says Paul Wilmore, General Manager of Consumer Markets, Barclaycard US. "Barclaycard Ring’s innovative levels of simplicity, transparency and service are impacting the way we do business across our products and services. We believe this is the way all companies will engage with customers in the future."

 

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Congratulations to everyone at Barclaycard for winning a Groundswell Award!  Check out the video they shared at the awards ceremony:

 

 

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