This is the first in a series of blogs looking at how credit card issuers have the opportunity to transform marketing to become truly personalized. In this first blog we discuss the need for personalized marketing and the constraints that have, until now, made achieving it difficult.
So what does today’s credit card marketing typically look like?
Generate a rough cut of your total addressable customer base, apply a set of exclusions, rank into segments according to propensity to respond, develop creative content, apply profitable offers, dispatch by preferred channels. Sit back. Wait. Fulfill. Rinse and repeat.
In financial services and in the payments and credit card sectors in particular, the traditional approach to marketing falls roughly into the cycle described above. Overly simplistic – for sure, and deliberately provocative, for this approach to marketing has served the financial industry along with many others that engage in database marketing very well. However, in these days of digital disruption, customer expectations have evolved and will continue to do so, in ways that force financial services marketers to redefine customer success and how to achieve it.
What is customer success?
For credit card issuers, customer success has centered on being able to use a preferred card to make a transaction seamlessly, efficiently, and securely. These must be coupled with effective support through the contact center and mobile banking channels. All the while, generating rewards that align to the customer’s preferences – travel points, cashback, college savings, catalog goods, or experience. Mastering these elements has, until now, been all that is required to meet and exceed customer expectations and remain ahead of the competition. But that is no longer the case.
Customers’ expectations are not being set by your competition any longer, they are being set by the digital natives and by the key players in the gig economy; the likes of Uber, Lyft, AirBnB, and Starbucks. These organizations have been built from a clean slate, unencumbered by complex and aging data and IT infrastructures. Yet the business model of many of these organizations is less about true personalization, and a whole lot more about being able to provide the right service at the right time, efficiently and in alignment with the consumers’ needs. It’s about understanding the customer’s desired outcome and executing on that in a way that delights the customer.
The business challenge remains: How to drive better customer engagement through providing personalized and relevant offers in a timely fashion. Full stop.
To facilitate true personalization, we need to understand the desired outcome – the life event that the customer is engaged with. That can vary from a one-off transaction (the weekly shop, putting gas in the car) to a key life event (moving house, planning a major vacation, getting married). Credit card issuers and payments companies have the opportunity to change the game by predicting the cardholder’s intent (transaction or life event) and responding with cadenced, highly personalized, and relevant offers. All the while reflecting results back into the predictive analytics engine and adjusting offer eligibility on the fly.
Taking that one stage further, using what card issuers know about the customer from their own transactional and demographic data, combined with 2nd and 3rd party data, it is possible to build up accurate personas for each cardholder. These personas can then form the basis for personalized marketing — even in traditional database marketing campaigns.
In order for today’s marketing campaigns to remain relevant and have a place in the new personalized marketing environment, we need a vision that encapsulates all marketing campaigns: for customer and prospects, for push campaigns and trigger based messaging:
In other words, marketing must be able to anticipate customer and prospect needs and deliver relevant and timely messages, offers and/or experiences to capture wallet share.
Build it and They Will Come
Building an architecture to enable this level of personalized interaction across digital and offline channels is clearly a challenge. Most large institutions are constrained in their ability to work in a close-to-real-time environment due to one or more of the following:
- Complex IT infrastructure built up over many years
- Disparate data sources potentially containing conflicting data
- Manual processes which require costly and time consuming QA
- Limited real-time engagement beyond service and sales
Transformation is necessary to enable the future state personalized marketing vision. This is a journey that requires investment and careful planning, but with today’s technology it’s very achievable.
Personalized marketing requires transformational capabilities including deploying marketing technology (‘MarTech’) to achieve true omni-channel engagement, striving for predictive personalization with real-time analytics, and architecting for Real Time Engagement via new operating models.
In upcoming blogs we’ll address each one of these topics and show how they come together in a coherent roadmap to transform marketing capability. We’ll start with a look at the MarTech marketplace, discussing the maturity of the various capabilities as the highly fragmented MarTech marketplace continues to evolve.