When Barclays introduced a new card earlier this year with points transferring to airline miles and bonuses for spend each year, the rest of the industry waited with baited breath to see what would happen.

There was no sign up bonus. And even Barclays’ competitors were rooting for them to succeed. After all banks spend a lot of money acquiring customers, and many of them don’t turn out to be good customers. In order to make back the up front investment a card’s initial bonus offers, the bank needs to retain that customer and keep them spending on the card for several years.

Is it possible to get consumers to adopt a rewards card without a big up front bonus? Did Barclays have something to teach the rest of the industry? Unfortunately for the banks consumers didn’t take to the product and it was withdrawn from the market for new applications.

As much as card bonuses may be important to consumers they are also important to banks that want to acquire customers for their products.

1. Excitement. A big initial bonus generates excitement and buzz. It’s focal for consumers, they see a simple task (applying for a credit card) having a big and almost immediate payoff (rewards). That’s necessary to motivate action when there so many things fighting for consumer attention.

2. Fear of loss. A limited-time (or ‘pulse’) offer is even more power than merely a big offer. That’s because a customer may see a big bonus as good, but is it really the most important thing to do today? A limited-time offer can move signing up for a card from #15 on the list up to #1 or #2 — in other words, actually get it done.

   What’s even more effective than launching a new offer is ending that offer. When consumers see an opportunity that’s going to go away they will act because they don’t want to lose out.

   Several years ago the Chase Sapphire Preferred Card was reducing its initial offer from earning 50,000 points down to 40,000 points. There were still some links out there with the 50,000 point offer. I’ve often described the frenzy that ensued over the last few days 50,000 points were available as being like the End Times. Anyone who didn’t apply for that card was going to get left behind.

   By the way they brought back 50,000 points as an initial offer on the card (after $4000 spend within 3 months of cardmembership, and it’s a $0 the first year card then $95).

3. Trust. Loyalty programs are all about trust. Consumers are increasingly skeptical. How do you show them that they’re making a good decision by putting spending on a card? You front the rewards to them. By offering a big bonus consumers see rewards quickly.

   In the early days of airline frequent flyer programs it was common for members to be given 5000 miles when they depleted their accounts, so that they never went down to zero — they might get off the treadmill and move to a competitor if they did. However programs quickly learned that once members redeemed their accumulation actually sped up, having proven to themselves they had made a good decision pursuing the rewards in the first place.

   By giving members points they can use, they redeem more quickly, and value the card more — making it more likely the average consumer will keep the card and keep spending on it. Without the bonus the payoff seems too far off in the future, redemption too far off to get consumers to ramp up their spending as well.

4. Arms race. 30 years ago 5000 mile signup offers were common. It wasn’t until 2003 that I saw my first 20,000 mile offer for a United credit card. Consumers were enamored simply with earning miles. But as reward costs have gone up, and competition has heated up, we’ve seen bigger and bigger offers — and have come to expect them. Banks that don’t offer them cede a market to those who do.

Card signup offers have become a key element of the value that cards bring to consumers. Right now the strongest offer I know of is for the Ink Business Preferred℠ Credit Card which offers 80,000 points after $5000 spend within 3 months. (Chase points are super valuable because they transfer directly to a variety of airlines and hotels.)