Cardlytics: rewarding customer loyalty through data

April 17, 2020 | Payments

Written by FinTech Alliance

Cardlytics: rewarding customer loyalty through data

From money off our morning coffee to cashback when we splurge on a new outfit, everyone loves a bargain, and consumers especially love to feel they have been rewarded for their custom. As the retail space becomes increasingly competitive, the race to gain market share and retain existing customers is stepping up – and customer loyalty programmes are a great way to do this.

When it comes to sending out the right offers, every transaction we make can reveal a lot about us and what we want to receive – but only if this data is combined and used correctly. That’s where Cardlytics comes in: using purchase-based intelligence to make marketing more relevant and measurable, and partnering with financial institutions to run banking rewards programmes.

It’s the combination of analytics, development and data science that makes this so fascinating and valuable, says Campbell Shaw, Head of Bank Partnerships. “There’s a greater need now for banks to prove they understand the customer,” he comments. “With all the data available today, it’s important it’s used rather than going to waste.”

Cardlytics deals with three stakeholders: the customer; the bank, which has a relationship with the customer through their account; and the merchants customers purchase through. The platform combines and analyses transactions through these strands to create campaigns that are targeted, discreet and highly relevant. “We want to ensure that when a customer gets access to an offer, it makes sense and is of value to them because of the intelligence we’ve been able to derive,” says Shaw.

“Right now, we have two very disparate stakeholders: one is within the bank, and knows everywhere the customer goes but not what they do when they get there,” he explains. “The other is the merchant that knows everything they do instore, but not what happens as soon as they leave. There’s a real dichotomy there, and I think if we can bring those data sets together there’s a huge amount of value to add, especially for the customer.”  

Shaw says open banking will be a key enabler here. “We’ve always worked individually with banks based on their own customer data, but there’s always a certain portion of spending that a customer spends outside that bank – so being able to gain access to that data would help us incredibly to be able to bring far more value to both customers and brands.”  

Now, Cardlytics has relationships with some of the largest banks in the US and UK. “Everything we do is always predicated on engaging with banks,” says Shaw. “We have bank grade technology and bank grade security. As banks continue to raise their standards, our ambition is to be one step ahead every time.”

Banks are raising their standards every day, especially as they strive to keep up with challengers and FinTechs. “The banks that are being driven by data are the ones that understand the value it can bring and can actually do something about it,” says Shaw. “They can use it on a daily basis and integrate it into the customer experience. Some banks, however, simply don’t know where to get the data that could be of benefit to them.”

In helping organisations get their heads round reams of data, Cardlytics has seen customers start to really engage more with rewards programmes. “It was typically predicated on everyday spend and numbers would be quite small – 10% off coffee or 5% off lunch, but today we have the ability to expand and understand how people can gain value from shopping,” says Shaw, adding that some customers even base their choice of annual holiday on how much cashback they’ve gained throughout the year.

The use of rewards programmes, in Shaw’s opinion, serves to reflect the way FinTech has made consumers more savvy about their money in general. “That analytics can now be done and presented back to the customer in an app is actually a simplistic move, but a great one. The data has always been there, but now it’s being visually presented. For example, how much did you spend on travel this month? How much on groceries?” Many apps have also added features like pots which make saving and spending simpler for the customer.

How would Shaw like to see this develop? “I think when open banking truly starts to deliver value to customers, it won’t be called open banking any more,” he comments. “It’s searching for that proposition and value right now. It should be about the value the customer sees, not ‘we’re doing this because it’s open banking’. It’ll be really interesting to see where the use of data expands to.”

When it comes to Cardlytics’ own expansion, Shaw says there are two key priorities. “The first is to expand our financial institution partnerships within the UK. The success of our existing programmes means we now have the capacity, and the company is mature enough, to expand our network.” Secondly, Cardlytics will look at international expansion, taking advantage of the interest it has already seen from other countries, across Europe and beyond.

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