For CIBC's Aventura credit card program, should we prioritize higher reward earning rates or lower annual fees to attract new cardholders?

Introduction

For CIBC's Aventura credit card program, we're facing a critical trade-off between offering higher reward earning rates or lower annual fees to attract new cardholders. This decision will significantly impact our customer acquisition strategy and overall program profitability. I'll analyze this trade-off by examining the product, stakeholders, metrics, and potential outcomes to provide a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on the competitive landscape, I'm thinking our positioning might be crucial. Could you share insights on how our current Aventura card features compare to major competitors?

Why it matters: Helps identify our unique value proposition Expected answer: We're mid-tier in both rewards and fees Impact on approach: Would focus on differentiation strategy

• Considering user segments, I'm assuming we have data on which features drive acquisition. Can you confirm if rewards or fees are currently the primary driver for new cardholders?

Why it matters: Aligns strategy with user preferences Expected answer: Rewards slightly edge out fees in importance Impact on approach: Would lean towards enhancing rewards program

• Looking at our revenue model, I'm curious about the balance between interchange fees and annual fees. What's the current split in our revenue streams?

Why it matters: Helps assess financial impact of fee changes Expected answer: 70% interchange, 30% annual fees Impact on approach: Would carefully consider fee reductions

• Regarding technical feasibility, I'm wondering about our system's flexibility. How easily can we adjust reward rates or implement tiered fee structures?

Why it matters: Determines complexity of implementation Expected answer: Reward adjustments are easier than fee structures Impact on approach: Would favor reward-based solutions initially

• Considering timeline, I'm thinking this might be critical for upcoming promotional periods. Is there a specific launch window we're targeting for these changes?

Why it matters: Influences the scope and urgency of the solution Expected answer: Aiming for Q4 holiday season Impact on approach: Would prioritize quick-win solutions