I got one of those pre-approved credit card offers in the mail last week – or rather my wife did. Normally they go straight to the trash but this one caught my eye because it was for something called the Visa Black Card. Now, living in New York and LA over the past decade, I’ve been exposed to the American Express Black Card a few times over the years and this immediately struck me for the simple fact that it was so me-too in nature. Admittedly, I know very little about the Black Card but I am aware of the cache that it carries as well as its exclusivity, given that I can count on one hand the number that I have seen it. I have no idea if it has been a commercial success for Amex but I’m aware that it carries strong brand equity for those in the know. It tends to conjure up images of jet setting business moguls or Hollywood stars.
After seeing the Visa mailer, I did a little digging to learn more. It turns out that the American Express card often referred to as the “black card” is, in fact, called the Centurion card…which may explain why Visa chose the Black Card name. I also learned that the new Visa card is not nearly as exclusive (or expensive) as the Amex card. According to Wikipedia, the Amex Centurion card is by invitation only and the requirements are thought to include exceptional credit history, and holding a platinum card for at least one year with a minimum of $250k in spend. All of that and a discreet annual fee of, wait for it…$2500 – after the one-time $5000 initiation fee. Clearly not intended for people like me or my wife. The Visa black card, on the other hand, states that it is limited to 1% of US residents but only carries a paltry annual fee of $495. Nothing to smirk at, certainly, but hardly the gag inducing $7500 chez American Express. In case you were wondering, 1% of US residents is roughly 3 million people. According to this blog dedicated to the Centurion card, about 17,000 people currently hold Amex Centurion cards. Even if many more than that get invited, I doubt the number approaches anything close to 3 million. As it turns out the Visa Black Card is much closer to the Amex Platinum card both in terms of requirements and benefits – the notable difference being that both the Amex Platinum and Amex Centurion are charge cards (balance must be paid each month) while the Visa is a credit card.
But as this is a blog about branding, what I find most intriguing is the strategy Visa seems to take with this card. The business driver behind launching this card is presumably to capture a slice of the high-end market which presumably has either higher margins or lower risk or both given the income brackets of the target consumers. It is also safe to say that Visa does not currently have the market share in this segment that they desire while Amex is almost certainly the market leader (based on the fact that Visa is blatantly attempting to imitate their card.
As I’ve stated before, I’m not a fan of me-too strategies. If you can’t be the first-mover in a segment or market then you have to differentiate. If you are the number 2 brand in a market/segment then be the opposite of what the leader is (Al & Laura Ries do a great job of explaining this and giving examples in their book The Origin of Brands - see my review here - Chapter 12). Visa makes several missteps.
- they try to sell a similar product using the same positioning as the market leader
Anytime a brand takes this strategy it is usually going to be seen for what it is – a poor imitation of the real thing - they pick a name and color that is synomous with the market leader
Use orange, use blue, use red, use white for goodness sake. But if the market leader and first mover is known informally as the black card, whatever you do, don’t call yourself the Black Card. the market is high-end credit/charge cards…not black rectangular cards that fit in your wallet. Be innovative, be unique. Nothing about this card is innovative or unique. The rewards and benefits are virtually identical to what you’d get with Amex Platinum. The card is made of carbon which might seem different until you recall that the Centurion card is made of titanium. There are so many more interesting things they could have done: a different shape like trapezoid or more rounded or a card that folds. - they seem to forget they are marketing a luxury product and Visa is not exactly known as a luxury good.
Two things here:
One – inherent to luxury is exclusivity. Often with luxury goods, exclusivity is viewed as an indicator of quality whether accurate or not. Visa’s card is clearly the less exclusive when put against the Centurion card. That isn’t necessarily a bad thing, but if consumers equate that to an inferior product then Visa is going to lose everytime. Therefore, why position the Black Card as a Centurion alternative. Come up with a unique reward that Amex doesn’t offer or make it about the credit (balance carry-over) benefits. Nowhere on the mailer I got did it make note of this fact. That seems like an important benefit.
Two – Take a page out of the car manufacturers’ book and consider sub-branding. Visa is a well-recognized and well-respected brand name for sure. So are Toyota and Honda. But when they decided to introduce cars in the luxury market they chose names (Lexus and Acura) that distanced and differentiated those products from their more mainstream models. Likewise, Visa may be well liked but nobody is going to feel very distinguished possessing a credit card brand that millions of other cardholders also have. Launching a new brand is never cheap or easy but is often more successful than over-extending a brand with non-synergistic line extensions.
The only way I can see Visa getting many consumers to jump on this offer is if they succeed in confusing them about which card they are actually signing up for.
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