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The affinity card has lost its lustre in Detroit.

Still, General Motors Corp. is determined to mine the GM Card database for renewed prospects.

Down from 12 million cardholders in 1995 to 7 million today, only about half of the GM Card's cardholder base is active, according to data GM submitted for to the Direct Marketing Association. But, while it's down, it's not out.


Executives at GM and Wenham, Mass.-based Mullen Advertising, the agency handling a new campaign for the card-which was delayed from an unveiling Oct. 1-refused to comment on the coming changes.

"We're not ready to talk about it," says Mary Kubitsky, communications manager for the GM Card.

However, a DMA conference schedule, which still lists the "Retooling the GM Card" session, says GM plans a new reward structure, new relationship-marketing program and new direct marketing.

As the GM Card lost some marketing partners in recent years, it left fewer opportunities for cardholders to reap rebates, says Bruce Brittain, president of Brittain Associates, a credit card consultancy.

"It was apparent that those marketing partners weren't enjoying the level of incremental sales and loyalty to make it worthwhile," says Mr. Brittain. "My guess, and the industry's guess, is that the program losses were not GM's choice."

Partnerships GM boasts on its Website include one with retailer Hammacher Schlemmer in which GM cardholders can receive free delivery with a purchase of $75 or more.

But GM also may have lost the interest of some cardholders by capping rebates at $3,500, although the 5% rebate rate is still one of the most generous, says Mr. Brittain.

Aggressive interest-rate competition is forcing marketers of affinity and co-branded cards to develop new incentives, says Kenyon Blunt, president of Bullseye Database Marketing, Tulsa, Okla.


"You add services to your card and try to make the affinity bond to the group you're marketing to stronger," he says. "There have to be five times as many offers out there."

The competition influx is added to the GM Card's downward turn since its successful debut five years ago, says Mr. Brittain. Others agree.

"The market's gotten very crowded, very competitive," says Mark Gruen, president of direct marketing shop Gruen & Sells, Chicago. "People are eagerly looking for new value propositions and new ways to break through the clutter."

Mr. Gruen adds that co-branded cards such as the GM Card were originally an innovation.

Use of the GM Card allows a consumer to accumulate credits that result in a discount on the purchase of a GM vehicle. The incentive was meant to increase card use-and initially worked effectively, Mr. Gruen says.

"If that happens, the card issuer wins, and theoretically the co-branding partner wins," he says.

GM is not the only automaker to encounter problems with its card. In January 1998, Ford Motor Co. canceled its Citibank credit card rebate program, sending 5 million cardholders to a separate Citibank card.

One reason for that, claims Mr. Blunt, is that consumers seem to be slowing card use and paying down balances because of increased debt levels.Marketing efforts are increasingly directed at keeping existing customers, he says. "That's a challenge when many pitches urge customers to transfer balances to a card with a

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