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Personalization Is No Longer a Perk

By Francis Hondal, President, Loyalty & Marketing Services and Jamie Samaha, SVP Loyalty Solutions

Personalization is no longer a perk — customers expect that your business will know their preferences

Ninety percent of business leaders say their customers expect them to know their interests even before they ask, according to  "The Age of Personalization," a Mastercard-sponsored study by Harvard Business Review Analytic Services. The study also notes that understanding the customer is profitable — 44% of businesses say providing personalized customer experiences has contributed to increased revenues over the past two years.

The benefit of knowing customer interests is no different when it comes to credit card loyalty. Consumers who receive personalized benefits and offers when using their cards are more likely to reach for that same card next time. The Harvard Business Review (HBR) Analytic Services report reveals critical insights about how contextual loyalty affects today's cardholders.

Not All Forms of Personalization Are Created Equal

The HBR study also found that 80% of consumers want promotions tailored to their needs and they expect more from companies to retain their loyalty. According to the HBR study, traditional marketing tactics such as email, print, social media and search and display are perceived as table stakes. Offering these types of personalization messages simply keeps you from going out of business.

Yet, not every personalization tactic provides the same competitive advantage. Participants in the HBR study indicated that the strategies below carry the most influence:

  • Product offerings and recommendations (57%)

  • Pricing strategies (54%)

  • Individualized online experiences (54%)

Loyalty Personalization Program Cards Digital Offers Harvard Business Review

In fact, product offerings and recommendations are the most-used personalization tactic across businesses today, delivering a higher ROI than any other. They're also the top area in which organizations plan to invest by the year 2020.

One way card issuers can take advantage of this trend is to partner with retailers to present customers with personalized offers that are relevant to them. When you do the math, it all adds up: consumers get benefits personalized to their needs, retailers increase sales and customer loyalty and issuers see increased card use.

Contextual Loyalty is Key

Successful personalization starts with timely, accurate data insights. Customers want your offerings to be convenient for them, not the other way around. Leveraging Mastercard's global network and deep expertise, card issuers and retailers can leverage anonymized and aggregated data insights to present consumer segments with customized offers that they already know will interest them.

Issuers can also enable cardholders to choose the benefits that are best for them, based on their lifestyle or life stage transitions. Research shows that when cardholders are allowed to choose their benefits, they perceive their card value to be three times higher, and they stay loyal to that card longer. Specifically, 92% of cardholders say the ability to choose their own benefits adds significant value, while 67% prefer bundled benefits that align with their priorities. The important thing to remember is to keep your eye on performance measures so you can be sure you're providing the right benefit choices based on customer preferences.

Raise the Bar with Retailer-Funded Offers

Retailer-funded offers can increase portfolio performance, but many times, they're hard to obtain and even harder to manage. First, you have to start with the right analytics so you can better understand cardholder needs. Then, you need resources to oversee the retail relationship. What's more, it's difficult to recruit retailers if you can't connect them with audiences they seek.

Mastercard's card-linked offers makes it easy to provide your customers with a steady stream of offers from the retailers they love, and a seamless way to redeem them. Because digitized offers are linked to cards, consumers can redeem them by simply using their credit card in their favorite store down the street, online, or even overseas — all without fumbling for coupons.

It's Time to Get Personal

Consumers want tailored experiences with every interaction, including credit card purchases. By providing personalized offers and loyalty programs to your cardholders you can keep cardholders engaged and benefit from revenue growth.

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