The credit card is one of two -- the Ultimate and the Platinum -- that will be offered to pre-qualified BMW owners for the first time this summer. Other car marketers have branded credit cards, including DaimlerChrysler's Mercedes-Benz USA, General Motors Corp. and Subaru of America. Those companies team with outside financial institutions; BMW's cards are handled by BMW Bank of North America, a Salt Lake City bank set up by BMW Financial Services North America. The bank opened in May after approval last September from the state of Utah.
ULTIMATE CARD IN TEST
The Ultimate card is being tested on a small percentage of BMW owners through a direct mail piece that went out in early July, said Andrew Pine, general manager-marketing at BMW Financial Services North America, a unit of Germany's BMW AG. Non-owners can also apply for the card or the bank's other services, which include BMW-branded checks, deposits and money-market accounts via affiliate BMW of North America's Web site (bmwusa.com).
Mr. Pine said BMW is "in no rush" to start marketing the bank services beyond the credit cards at this point. Traditional advertising for the cards could come when BMW expands the target beyond its owners.
Coyne Communications, Morristown, N.J., handled the five-piece mailing. The headline on the cover of the main piece reads: "BMW performance that fits your wallet."
Ultimate cardholders earn points every time they use the card. The points can be redeemed for airline tickets, hotels, airport parking, additional miles on BMW lease vehicles and reduced interest rates on BMW car loans, Mr. Pine said.
The Ultimate card has an annual fee of $100, while Platinum has none. Platinum holders can redeem points for BMW-branded merchandise, also available to Ultimate holders.
BMW plans to offer the two cards to a total 100,000 owners. A second mailing drops later this summer. BMW dealers will also begin promoting the cards in their showrooms. Tom Coyne, president-CEO and founder of the agency bearing his name, said BMW can draw from two databases -- its roughly 400,000 financial services customers and the more than 1.5 million BMW owners.
The BMW credit cards should be "a good status brand that will promote use of the card," said Rick Barlow, president of Frequency Marketing, Cincinnati.
NEW REVENUE STREAMS
Car companies want to sell more services to their owners to create new revenue streams, he said. "The more hooks you get into the customer, the more information you have about the customer and the more loyal the customer could be." But Mr. Barlow isn't convinced consumers will be interested in BMW Bank of North America's other banking services unless they're comparable with competitive financial institutions.
Subaru and Mercedes said they promote their credit cards via direct mail. Subaru lets its bank partner, MBNA, handle mailings and promotes its 3-year-old card through a quarterly magazine to owners and new buyers, said Joe Barstys, manager of customer satisfaction.
Mercedes handles direct mail for its 3-year-old card with in-house staff working with free-lance shops.
Only GM has turned to traditional media for its credit cards. GM kicked off an estimated $20 million multimedia push in March to introduce two new reward credit cards that continued its relationship with Household Bank and MasterCard International. Mullen, Wenham, Mass., handled.