This is is a syndicated post. You can find my original post on LinkedIn 2017-02-14

Unlike most lines of business at the bank, the cards division doesn’t have much latitude when it comes to hitting ROI targets. Your revenues depend almost entirely on net interest, interchange fees, and late fees. Customers are segmented in Cartesian categories based on spend (high, low) and payment behaviour (before due date, after due date, never). Your business goal is, also, unsurprisingly straightforward: drive purchase volume so that you can collect said fees. Considering the limited revenue levers and acquisition-tactics, shining brighter than the other plastic is no easy feat.

Which is why you shouldn’t be tackling this alone. To drive your card programs, you need to engage your mobile partners and digital groups. Not only are these groups driving engagement at your bank, they’re harnessing insights from the data created by your customers’ online and mobile behaviours. You need access to these behaviours. Maintaining a view of your customer based on card usage habits alone is limited. With combined efforts, you can leverage untapped data and analytics to understand your customer’s purchase behaviour more holistically. This will play a crucial role in understanding your customers, personalizing your incentives, and seeing increased purchase volume on your cards. Here’s why:

1. Your view of the customer is limited

  • As it is, card statements only offer information about merchant and total. There is no information about the products themselves, the individual items bought, their brands – nothing. There is no way to understand brand loyalty and no way to understand real customer preferences. This is especially true for purchases made at big box retailers where goods could range from groceries to automotive parts. More than that, there’s no way to understand how customers are allocating their budget across product categories – an important indicator of priorities and motivations.
  • Off-card spend (cash, gift cards etc.) and purchases using cards with other financial institutions (OFIs) is entirely unknown to you. The average American holds 2.6 credit cards, which means that what you think you know about your customer’s spending habits is at most half-true (CreditCards.com).
  • Cardholders don’t realize the full value and benefits of their loyalty programs or sign-up bonuses, and so they don’t use their card accordingly. Consequently, they never realize the added value your card provides to their spending.

2. Access to purchase data (Receipts) can complete the customer profile

Working together with your mobile/digital channels to offer Sensibill’s receipt management solution in your mobile app means customers will be able to capture and store their receipts in your ecosystem. This value-added service adds visibility to vague transaction statements, improving your customers’ banking experience, reducing disputes about transactions, automating reconciliation and much more.

Beyond improving the customer experience, you will be aggregating and amassing all of their purchase data, channel behaviour, and insights into how they’re engaging with your products. You will have a better understanding of what they’re spending money on, and how they prefer to pay based on merchant or item or category.

Whether or not they used your card to pay, by encouraging the use of our digital receipt service in your app, you will be encouraging the capture of receipts across tender types, granting you access to otherwise undisclosed information.

3. Purchase data can help drive purchase volume on cards

  • Segmenting customers based on demographics and aggregate expenditure isn’t enough. Knowing Jim spent $1000 at Target is not as interesting as knowing that he spent $1000 at Target on baby clothes and nursery furniture. A detailed record of your customers’ purchases indicates categorical allocation of spend, revealing priorities and lifestyle – factors that aren’t properly addressed in the current approach to segmentation. It can also reveal a shift in spend, indicating a transition from one life stage to another. This kind of information allows you to be in tune with your customers’ needs, enabling real-time, personalized product offerings and incentives. A customer who expects relevant kickbacks from their card will use that card whenever they can. Simple as that.

“When asked what features were most attractive in their credit card, 55% of respondents in 2015 said rewards type, above card brand (33%).” – CreditCards.com

  • Understanding how customers prefer to pay at any given merchant or business type can give you the insights you need to modify payment behaviour. You can then determine what kind of incentives they need to stop paying with cash at coffee shops and fast food restaurants and start using your card instead. Maybe this means offering them a card with cash back rebates for restaurants – if they don’t already have one – or a co-branded offering at their favourite morning pit-stop.
  • Understanding how customers are choosing to use products from OFIs can help you tailor your product offerings and personalize your customers’ experience. Most people apply for cards from different institutions to reap different rewards, or simply to take advantage of a lower interest rate offering. Regardless of the motive, this kind of intelligence is important to gather. It can be used to up-sell customers with competitive product offers, or to make complementary offers. For example, if a customer booked a trip with a competitor’s card, you can offer them travel insurance. It may not necessarily influence your customer’s loyalty to OFIs, but at the very least it could shape the sales conversation with your existing customers and help you identify cross-sell opportunities. More than that, the information in aggregate can give you an idea of how your competitors are performing and how their products are being used.
  • Item-level information can serve as a new channel for contextual communication – notifying customers about potential and/or missed rewards post-purchase. Your cards are tools that can significantly improve your customers’ financial lives, but only if they know how to use them. With digital notifications directly on their receipt, you can help guide their experience – or at least nudge them in the right direction – with no added effort on your part. This can encourage card spend as people use your card to make purchases with a reward in mind.

Executive Summary: How Receipts can drive your card program

  • Use item-level data to supplement identifying, segmenting and targeting customers for rewards programs
  • Understand payment preferences in order to incentivize customers to shift off-card spend to your cards thereby increasing card volume
  • Understand motives for OFI card usage in order to make competitive or complementary offers
  • Advertise and contextually promote card benefits based on items purchased to encourage spend

To find out how Sensibill can power your credit cards and loyalty programs, contact Jeff at jeff@getsensibill.com.

Posted by Corey Gross

Sensibill CEO. 80's film enthusiast.

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