Store branded credit cards offer great value to customers, who can earn rewards points and cashback simply by using their card at participating stores. They are also a good way to increase sales through loyalty marketing.
Your customers benefit but also provide you insights into their spending preferences that helps in providing highly personalized offers based on customer behavior; a win-win.
In this article we will discuss how store branded credit cards can open new loyalty and insight channels for your customers.
Customer loyalty is important because it increases sales and profitability. Customers who feel valued and appreciated tend to become loyal customers, and companies that do well in retaining their customers also see increased revenues.
A study conducted by Harvard Business Review found that members of top-performing customer loyalty programs are 77% more likely to choose your brand over the competitor. Another study by Bond University found that customers who join a top-performing customer loyalty programs are 3x more likely to purchase again.
Additionally, according to research by ZinRelo, you can expect to generate about $20 per member every month. This translates into additional annual revenue of around $240 million. Moreover, another study by HBS found that companies with strong loyalty programs grow revenues 2.5 times faster than their competitors and generate 100-400% higher returns to shareholders.
Thinking of loyalty as a simple membership program no longer meets consumer expectations. Their expectations are for positive customer experiences that reward current customers in a way that is meaningful to them (i.e. personalized offers).
In today's world, it is not enough to just have a generic loyalty card (such as airline miles that rewards based on dollars spent). Customers expect their individual desires to be served. To be competitive we must tailor personalized experiences to customers based on their individual situation rather than just giving out gift cards based on spend. This is shown through customer retention rate statistics [https://www.smallbizgenius.net/by-the-numbers/customer-loyalty-statistics/]
A subset of your loyal customers are likely to hold most of the value or opportunity to your organisation. As to where to focus, this will be up to your strategy. Perhaps its to target new growth areas; or perhaps to protect existing valuable customers with a custom retention strategy.
In the next section we look at how you might want to group customers of interest.
Historically marketing strategies have used customer segments to group their customers into similar groups. People are however multi dimensional and while one person may have similar purchase behavior as another (within your stores context) they may have very different motivations that drive their behavior. This matters when you talk to both of those customers the same way, one may convert well and the other not. Equally you may do different campaigns and the reverse may be seen as true too. To make matters worse, campaigns are often measured linearly to give results across those segments. That may give the impression that which ever way you cut the wording it makes little difference when perhaps it does.
In more recent times, marketing has started moving towards a personas based model where information that helps inform marketers about the customers behavior and background can inform marketing campaigns.
Data, data, data! We are in the age of data. Those that have data (and can use it for insight) can avoid falling in to the trap those most companies have, by sending impersonal communication.
There is a lot of data out there, but getting access to valuable data is key for a strong rewards programs.
For many businesses that sell direct to customer, the vision of data can be separated into two main buckets:
There are however other data opportunities to reach out beyond just your digital ecosystem. Custom branded credit cards are one of these methods. Since your customers can use your card at competitor stores; it can enable insights to questions such as:
You can purchase information that can inform this but its not as powerful in our view as what you can see by looking at what your own customers do. Purchasing the information also doesn't enable you to communicate with your customers where they are. If they are spending using your card, you can choose to give a promotion that rewards them or encourage behavior with that card.
Many businesses offer customer loyalty programs but haven't integrated them into their payments channels. As mentioned previously getting your loyalty and customer insights to extend beyond your business is very powerful.
There are however many options within branded payments which can include:
These have different insights into customer behavior, and outside of your traditional ability to learn about your loyal customers. The offerings can also be segmented if you wish to give gold membership versus silver based on behavior or customer value.
At 1derful, we offer all of these services previously mentioned (including any sub-part that you want; such as collections). We partner with companies that are interested in premium loyalty offerings. If any part of what is described above sounds of interest, then please contact us.