Co-branded credit cards can be an imperative part of a retailer’s business. They attract customers who otherwise would not be interested in a normal store credit card. Typically, these cards offer discounts, points, rewards, and other perks. The incentives often accrue when using the card at its sponsoring retailer and are too enticing for customers to pass up. Small businesses can benefit greatly from implementing co-branded credit cards because they attract new customers. As a small business owner, you may be wondering if co-branded credit cards are right for your brand. Read on to discover how to determine the best co-branded credit cards for small business.
Consider Your Customer Base
Thinking about your consumer base is one important factor in determining the best co-branded card for your business. Simply the presence of the card often leads to substantial increases in customer loyalty. Your customers know they can reap better rewards when they purchase from you instead of a competitor. Additionally, your company name on the card will help you build brand identity. The perks offered by the card will also serve as a form of marketing, because they may be the reason someone chooses you over a competitor. Surely, considering your customer base is one way to determine the best co-branded card for your small business.
Set Co-Branded Program Goals
Determine whether co-branded cards are right for your business by setting program goals. Your card should be seen as a tool for streamlining your marketing and loyalty efforts. It is also designed to reward consumers for continued patronage to your brand. Therefore, it is important to determine whether your business goals are oriented more towards revenue or consumers. If it’s the former, you may find yourself at odds with the card issuer. They do provide strong financial inputs, but they are intended to keep your program competitive. If it’s the latter, a co-branded credit card is a prudent financial decision for your small business.
Calculate The Consumer Spending Minimum
The magnitude of consumer spending is an additional factor in determining whether a co-branded credit card is right for your business. Consider your consumer demographics and how much they spend with your business. Multiple cards with multiple levels of rewards may be best if there is great variation in consumer spending. In addition, there are many small business co-branded cards that require a certain bank balance to be met. If your customers are only spending here and there, it is possible they may not have enough types of working capital for one card to be a prudent idea. Absolutely take the magnitude of your consumers’ spending into account when determining if a co-branded credit card is right for your small business.
Create A Co-Branded Rewards Program
Creating a co-branded rewards program is also a thought in figuring out if a co-branded credit card works for your small business. Perks on these can be travel oriented, for example, and include things like free checked bags and no foreign transaction fees. Just these aspects will add up tremendously. In addition, they’ll be accruing miles on the card to use towards future travel. However, these cards tend to be more expensive in their rates and fees, so only consider them if they are flying frequently. If they are, then their travel frequency makes a co-branded rewards program a great idea that will keep them loyal by saving them money.
Track Your Sign Up Bonuses
Rewards and other perks offered by the card card processor are themselves another factor in determining your small business’s interest in a co-branded credit card. Issuers will pay your business a bonus for each new customer that signs up. You will also not have to pay a credit card fee whenever the co-branded card is used for purchases. In addition, your business will get a cut of any interest or late fees the consumer pays to the issuer. Additional fees in your favor can often be negotiated with the card issuer, as well. Indubitably, considering the rewards the card offers you and your business is a huge determination in whether a co-branded card is a prudent decision.
There are many factors in determining if a co-branded credit card is right for your small business. One such factor is your consumer demographics, as the card will keep them loyal. Another factor is your specific business goals and how the card will apply to them. Third, consider how much your consumers travel, as co-branded travel cards can save them a lot of money. Also consider the magnitude of their spending, as many cards have balance requirements. Finally, consider the benefits the card will bring to your business specifically. When trying to determine your small business’s eligibility for a co-branded credit card, take the above considerations into account.