Katy Thorbahn is President/CEO at Shiny.
Here’s a tale of a lost opportunity to build loyalty and drive spend on a credit card, all because of a bad offer experience.
But first, let’s set some context around offers. It’s no surprise that people love a deal. Honey, the free shopping app that automatically surfaces discounts on over 30,000 online retailers, reportedly has over 17 million users across the globe. Rakuten, another free resource for consumers that offers cash back and other rewards on purchases, has about 15 million people using its service. These are just two examples of technology that help people save money while shopping. Of course, there are myriad ways to earn discounts—from simple coupon codes to keeping an eye out for sales. Similarly, credit card companies leverage merchant offers to help people get more from their purchases. But do they? Here’s where our story begins.
A colleague of mine was recently regaling me with the story of a disappointing shopping experience. The disappointment wasn’t with the retailer but with his credit cards. The story goes like this: After much research and review, he finally pulled the trigger on making a sizeable investment in outdoor furniture. As a savvy shopper, he had already evaluated publicly available offers from his retailer of choice and found none. Since his savviness doesn’t end with looking for online deals, he also has a cadre of cards he strategically uses for different purchases. He was ready to enter all the information for the card he planned for this purchase and then thought, “I wonder if there is a merchant offer from one of my cards I could use?” He then logged into each credit card site, navigated to the merchant offers, and scrolled through dozens and dozens of offers for all seven of his cards. It was a disappointing process both because none had a deal for his retailer and because it was a super painful and a highly undifferentiated experience between brands. So, back he went to use his originally planned card, which means six cards lost the opportunity to secure a significant purchase and be put into consideration for more purchases down the road.
All of which got us thinking: Why don’t credit cards make it easy for their customers to find and use their merchant offers?
While price and legal structures may be limiting factors here, one thing is painfully obvious: Merchant offers are ripe for innovation. During our discussion, the one thing that surfaced was that he didn’t wish the bank would innovate. He wished that an affiliate would find a way to take this on because they always do a better job. This is a problem because, in more than a dozen years of working with credit card companies, we’ve been asked again and again how to improve certain experiences to pull more traffic away from affiliates. And at the end of the day, it comes down to this: How can credit cards make the experience of finding discounts more customer-friendly?
Sure, your credit card probably offers a slew of merchant offers, but to use them you usually have to:
• Log in to the website.
• Find them on your dashboard (which isn’t always easy).
• Search through offers that aren’t relevant to you to find one that is.
• Activate them by saying you want them.
• Make sure you follow the terms of the offer, which can vary by merchant.
Of course, the reason people choose to use discounts isn’t just for the satisfaction of feeling like they got a deal. It’s also because they want to keep more of the money they earn, which is an obvious area for financial services to play. So how can they?
Here are three ideas to get the creative juices flowing:
• More effectively surface discounts. Remember those seven credit cards? Only one of them had the ability to search for a merchant offer on its site. The rest require people to scroll through and find them in much less efficient ways. That’s an easy fix and enables a card to be a bit more helpful while it tackles the next two ideas.
• Make it easy for cardholders to save. Automatically add merchant discounts to their cards and then tell customers about them to drive usage. So, rather than requiring them to take action to get an offer, proactively let them know: “We thought you’d like to save money with X restaurant, so we have automatically added that benefit to your card. Every time you eat at X between now and [insert date], you’ll automatically earn 2x points, no action needed.”
• Know thy customer. It always comes back to this, doesn’t it? In this case, it’s understanding your customers’ motivations and behaviors. Are they already using services like Honey or Rakuten? Does their credit card spending show discount retailers or services like Groupon? How about asking them which type of expenditures they are most interested in having savings and then tailor offers to that information? The goal here is to not only make it easy to use discounts but to provide the discounts that matter to them to help drive loyalty and spend.
And if you do the above? You’ll be that one out of seven that stands out, delights your customer, and gets the sale.
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