Five Ways to Reduce Cardholder Churn Through Marketing & Loyalty Programs
Last week we blogged about using your processing platform to gather knowledge about your cardholders, and how this provides the insights you need to market to them as individuals. The goal is to connect with them so you can retain and grow them as valued customers. So we thought it would be worthwhile to take a deeper look into the topic in this week’s post, specifically focusing on cardholder churn.
With so many companies competing for customer mind share, a generic and random “blast” approach to marketing simply doesn‘t make sense anymore for prepaid card programs. Today’s customers expect to be recognized for their worth, rewarded for their loyalty, and for products/brands to anticipate their needs. To do this you will need analytics technology to ensure you can sort through mountains of data and pick out the right information to reach the right customer at the right time, down to the exact channel and offer. And to utilize that data, you need to think outside the typical prepaid program management box and innovate with new and engaging cardholder targeted programs.
After all, you really only have two choices:
1) Invest now to retain and grow your programs or 2) Keep churning and suffer the expense of constant acquisition and on-boarding costs.
So what types of marketing & loyalty tactics should you consider? In working with our clients, here are a few ideas we found work really well and that we routinely recommend as best practices to our clients:
1. Stay top-of-wallet and drive spend by delivering relevant and personalized offers linked to use of the prepaid account. Card-linked offer technology makes this easy to execute and provides a transparent and automatic experience at the point-of-sale (POS). Giving money-saving coupons and discounts, promoting your own products & services and running cross-merchant promotions are just a few ideas. Geo-location and allowing cardholders the ability to choose the types of offers you send can take engagement a step further.
2. Consider triggering these offers based on real-time transaction-level events. For example, if one of your cardholders makes five POS transactions in a month, automatically send them an offer or reward when they complete the fifth transaction. Our clients like the fact that they can do this instantly within their processing platform because they can make the most of the moment. By having the offer delivered with a personalized message immediately after the desired action occurs, you can maximize impact.
3. Implement a rewards and loyalty program that taps into your customers preferences while encouraging them to adopt desirable behaviors. Matching reward or incentive opportunities to specific segments across your cardholder base is important. Customers want to see only what is relevant to them, so be sure to match wisely! Track the interaction so you can learn and refine your methods to engage them further.
4. Personalize all communications to your cardholders – from account alerts to promotional text messages to live customer service interactions. Personalization humanizes the interaction between you and your customers.
5. Build a network of merchant partners (if you do not have one already) or partner up with an offer aggregator. They would love to supply your cardholders with offers and some may even be willing to pay you for this access. Cross-merchant promotions and offers restricted to specific hours (low foot-traffic times) are two creative ways to execute promotions using your merchant network.
These are just some ideas you can consider. It’s important to remember that to be effective, you will need to show that you understand the customer. A few random programs and promotions won’t cut it. Use your data and analytics to orchestrate the right interaction at the right time, the right place and via the right channel. You – and your customers – will be pleased with the results.