In April 2012, Barclays US launched Barclaycard Ring– a credit card whose policies, fees and rewards are co-created by card members. The credit card attracted early adopters and frustrated credit card users with its promise of straight forward fees, transparency and collaboration.
Barclays envisions the card will be “built on transparency, authenticity and a community,” and invites card members to “to start changing the credit card industry.”
Here’s a video in which Paul Wilmore, Managing Director – Barclaycard Branded Products, shares the story behind the card:
In his review on the card, financial blogger David Weliver highlighted the two way channel of communication:
“Barclay’s is calling this a “crowdsourced” credit card. According to the bank, they are “actively listening” to card members and will change the card’s features in real-time according to feedback.”
A blog post by the Unibul team highlighted the appeal of such a unique product:
“What I like most about Barclaycard Ring is its avowed transparency. Banks know better than anyone just how unpopular with their customers they’ve become and are looking for ways to reverse the trend (or at least some of them do).”
This comment on the Barclaycard Ring Facebook page reflects a similar sentiment:
Barclaycard Ring attracts people with its unique proposition and innovative Giveback rewards program; builds a community based on open communication; and keeps people engaged with a calendar of co-creation opportunities and financial literacy content, and by incentivizing participation.
Card members can access a private online dashboard which displays the different actions they can carry out, features or rewards they can vote on, and monthly performance of the community and the card. Card members can also ask & answer community questions.
Blogger Laura Edgar summarizes the opportunity for card members:
“As a Barclaycard Ring card customer, you’ll be able to go online and see how the company is performing through an online profit and loss statement. You’ll get to vote anytime Barclaycard suggests raising fees, changing the APR or altering the card’s terms and conditions. You’ll also get to weigh in on marketing ideas and website enhancements through online forums.
“Basically, if you have ideas or concerns, you’ll always be able to discuss them with other cardholders and a Barclaycard “community manager”, who has the dual role of customer service representative and forum moderator.”
Community managers regularly introduce new topics on the public blog, and direct card members to discuss these on a private member-only platform. Community managers also document the decisions and successes of the community on the blog, and share results of the card’s monthly performance.
Members can contribute to the health of the community by participating actively and to the health of the card by using their cards regularly, making regular payments, referring friends and opting for paperless e-statements.
Barclaycard’s Paul Wilmore shared the inspiration behind this model:
“We were inspired by the sense of community shared among credit union members, as well as the way social media is helping people learn from each other.
“Our online community allows for these two ideas to converge. Just like real-life circles of friends and communities of like-minded people, we’re building an online community that enables our card members to gather information, share knowledge, and have a role in the card’s future success.”
To prevent members from voting for features that would harm the financial performance of the Barclaycard Ring, Barclays introduced an innovative rewards program called Giveback.
As TIME’s Martha White pointed out:
“Since most consumers don’t care about a bank’s bottom line, Barclaycard US set up an incentive system to get customers to consider these costs. In lieu of a traditional rewards program, Ring cardholders will get periodic “givebacks,” in the company’s parlance, of profit the bank earns above a predetermined threshold.
“Customers will vote on whether they want that money distributed as statement credits, donated to a charity, or some combination.”
Giveback presents customers with a win-win situation, as CreditDonkey blogger David R noted:
“The novel, community-driven approach allows cardholders to vote on what benefits or features they want and share in the estimated profit of the community’s financial performance.”
“We accumulate the [Giveback] pool through two different programs: Barclaycard Ring returns and referrals from members. An individual card member is eligible to earn Giveback™ from both pools only if they participated in contributing to them.
“For example, you can only receive money from the referral pool if someone applied from your referral through the module on our website. And, you can only earn Giveback™ from the returns calculation if you actually used your card.”
Bad behavior, such as late payments, results in a portion of the member’s Giveback going to charity. The program also incentivizes ‘good community behavior,’ as financial blogger David Weliver noted:
“when account holders opt in for paperless statements and pay their bills on time, the community benefits; the card will kick back more of a reward to account holders.”
While some card members have earned rewards through the Giveback program, potential customers are skeptical of the benefits of this new model versus traditional rewards programs.
Card member Philipwhuf commented:
“I just [received] $90 back via the “Give Back” feature which will be applied to my statement and this was with moderate usage.”
A potential customer commented:
“This card has no reward points as I am used to but gives a profit sharing percentage back. I havent used the card yet and I am on the fence whether the profit sharing is better than rebate points.”
In addition to incentivizing good behavior, Barclays is using elements of gamification to encourage active participation and to reward active participants.
Fast Company’s Kit Eaton noted:
“It’s all about promoting active user involvement in adjustments and refinements to Ring’s ongoing financial design…
“If you actively participate to improve the Ring experience and performance, then you’ll be rewarded–using mechanisms that the community itself can adjust. That’s brilliant, as it could mean the users themselves are working to refine Barclaycard’s own design, for their own gain as well as Barclaycard’s.”
Card members can view their participation or ‘achievements’ online, as well as their latest community standing – depicted by the colors on their badge or “ring”.
Credit card analyst Jenna Herron explained how the badges work:
“The creators of Barclaycard Ring and the online community realized that part of social media is creating status. Think of Foursquare’s mayorship, Pinterest’s repins, Twitter’s retweets or getting dozens of “likes” on a Facebook post. So Barclaycard introduced “badges.”
“Cardholders earn badges by behaving in a way that helps the card’s community… Once you earn a badge, your online avatar receives a ring of color. The more colors, the more badges.”
The active channel of communication between Barclaycard Ring and the community helps the bank collect real time feedback around features. For example, in a blog post titled “Crowdsourcing the Design of Your Card,” Barclay’s Jared crowdsourced views on RFID chip enabled credit cards:
“The RFID chip – Is it worth the $1 per card? It seems to me like the community is pretty split over this one. Will mobile payments surpass RFID chip technology and make it obsolete, or will more merchants start accepting RFID making it a nice feature?”
In addition, the model of changing policies over time – with card member support – gives Barclays a great playing field to experiment with new policies, like getting rid of the 1% foreign country fee. Card members can choose to support the experiment and are equally responsible for its success or failure.
Another notable aspect of Barclaycard Ring is the culture of sharing information freely with card members. Community managers candidly explain the cost of various transactions and the monthly earnings from each transaction.
They also share overall performance results on a monthly basis along with an analysis of what worked and external events that impacted results – giving card members a better understanding of the impact of their decisions.
Thinkers, card members and the Barclaycard Ring team believe the Ring community has an opportunity to promote financial literacy amongst members.
“The number of active community members at this points is pretty small and conversations in the forums is mostly centered around questions and issues specific to the card, versus discussions around more personal financial matters. I am hoping that the conversations shifts from technical questions about the card to more in-depth conversations about financial learnings and financial health.”
And, Barclays too is exploring this space with the introduction of The Financial Planter series in honor of Financial Literacy Month:
“Starting in May we will be introducing a year-long series called “The Financial Planter.” We will spend a few months on each stage, using the 2nd week of every month for a specific topic related to that stage. An in-depth blog post will be published on Monday, then on Wednesday we will feature third-party articles, set up a Q&A or interview an industry expert to get another point of view. And, Friday will focus on “fun” with a variety of Do’s/Don’ts, videos, fun apps or other light-hearted materials to make you smile.”
Paloma Vega, Director of Consumer Practice at Andreoli MSL and member of the MSLGROUP Insights Network, highlights the important of financial literacy for consumers and banks alike.
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