Surveys reveal credit cards as gateway to cross-selling. (Marketplace Property/Casualty).

According to two separate surveys, credit cardholders read direct mail and buy insurance from their credit card companies.

A survey by Synergistics, a marketing research company for the financial-services industry; reports that 33% of credit cardholders have obtained some type of financial service, insurance product or nonfinancial merchandise from their card issuer. The study was a national telephone survey featuring 1,007 cardholders age 18 or older with annual household incomes of $25,000 or more.

About 33% bought nonfinancial merchandise or services, such as magazines, radios, luggage, travel packages, discount shopping services or telephone service. One-fifth have obtained some type of insurance from their card issuer. Another 20% have obtained a financial service, such as checking, loans, savings or investments.

The results also show that there is a wide degree of fragmentation in terms of the individual products and services that have been acquired, with most services being mentioned by only about one in 20 cardholders.

Checking accounts, credit protection insurance, magazines and merchandise are the only products cited slightly more than 10% of the time.

"Providers face a daunting challenge in cross-selling other services through the card relationship. While limited activity is occurring, it has the appearance of being opportunistic, or based on happenstance. Nonetheless, a first step has been made in broadening card issuers' sphere of influence," said Genie M. Driskill, chief operating officer of Synergistics.

Credit card users read direct mail and would even consider buying auto insurance through the mail, according to a recent survey by Webcraft, the direct marketing service of Vertis, a provider of integrated advertising and marketing solutions.

The "Vertis Customer Focus 2001: Direct Marketing" survey highlights direct-mail usage in the financial-services and insurance industries. According to the survey, readers of direct mail from financial-services companies consider personalization, timing and appearance as the three most important factors in deciding whether to open the direct mailing. Among the 49% of adults who use at least two credit cards each month, 65% had read direct mail in the past seven days, and 43% had read direct mail from financial-services companies specifically.

Concerning direct-mail usage by insurance subscribers, the survey revealed that one in four adults would consider purchasing auto insurance directly from the mail, without involving an agent. In addition, the survey discovered that baby boomers are the best-covered generation among the 75% of adults who have life insurance.

Cross-Selling to Credit Cardholders

Thirty-two percent of surveyed cardholders said they had bought products
or services from their credit card issuer.

                                  Percentage of Cardholders

Any Product or Service            32%
Any Nonfinancial Merchandise      29%
Any Insurance Product or Service  21%
Any Financial Service             20%

Note: 1,007 cardholders surveyed

Source: Synergistics

Note: Table made from bar graph