Alliance Data Systems has signed a new long-term agreement to provide private label credit card services and assume management of an existing co-brand card program in the U.S. for Toyota.
Additionally, Alliance Data has entered into an agreement to purchase Toyota’s existing portfolio of co-brand credit card accounts, subject to regulatory approval and customary closing conditions. Details of the purchase price were not disclosed, other than to note it is well within norms of the industry.
Alliance Data will provide credit card marketing services for the Toyota and Lexus co-brand credit cards, and will launch new private label credit cards for both brands, utilizing customer-centric insights and analytics to increase cardmember engagement and incremental sales. Both card programs will be designed to drive brand loyalty by rewarding cardmembers for every purchase, with additional points earned for Toyota or Lexus brand purchases, such as vehicle service and parts.
Earned points are redeemable toward additional Toyota and Lexus service, parts or accessories, or a customer’s next Toyota or Lexus vehicle. The new private label credit cards will also offer flexible financing options.
Toyota also will use Alliance Data’s advanced suite of digital and mobile solutions to create a compelling cardmember experience and engage dealerships. Alliance Data will build mobile credit apps for the Toyota and Lexus brands to offer customers a brand-centric, integrated account management and rewards experience. Alliance Data will also launch a customized dealer portal that will feature access to key dealer performance data, marketing materials, training tools and other program support materials. In addition, a direct rewards redemption capability will be leveraged to provide a level of dealership support unmatched in the industry.
Alliance Data’s Epsilon business will provide in-dealership support of the card programs by identifying and communicating to current Toyota vehicle owners with personalized permission-based marketing messages, including email and direct mail. Epsilon has worked with Toyota and its dealer network since 2009, providing client relationship management (CRM) services, combining online and offline data to engage vehicle owners with highly targeted and analytically driven communications that generate ongoing sales and service transactions to build long-term owner loyalty.
Alliance Data believes that the performance of the Toyota co-brand card portfolio once acquired will be consistent with its overall co-brand credit card portfolio, and all new co-brand and private label credit card accounts will be consistent with Alliance Data’s credit quality standards. Closing of the portfolio purchase is expected in Q4 2015.
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