Since high-value customers like these are not shy about taking their business elsewhere, or giving other financial institutions a try, we can expect a mounting credit card war on the horizon. Credit card issuers will likely send out lucrative offers to attract Aeroplan credit card users who may be looking for alternatives in the face of uncertainty, but which population segment is the right one to target?
When looking for high-value customers, there’s a very important group that financial institutions often miss: new Canadians. With an aging baby boomer population and low birth rates, immigration is the main source of population growth in Canada. Moreover, the government has plans in place to keep the rate of immigration at 300,000+ newcomers per year, with a focus on economic immigration – those who can be, or already are, gainfully employed. For credit card issuers, this policy should represent an attractive prospect pool of 300,000+ younger, employed and more financially savvy new Canadians every year. Compared to past decades, recent immigrants hold more senior-level employment roles, and have Canadian education and social networks – a key to overcoming barriers when it comes to finding suitable employment opportunities in Canada.
Comparing these new Canadian Aeroplan credit card users with those born in Canada, we see that newcomers are much more likely to:
Aside from understanding the profile of their born in Canada customer base, TD, CIBC and American Express should really examine and build a better understanding these potential newcomer Canadian customers. If they want to win the upcoming credit card war and grow their base, this population segment is going to be essential.