At a time when banks are looking for ways to generate new revenue and increase customer loyalty, Cardlytics has developed a way for banks to leverage transaction data to deliver targeted offers to clients on their online bank statements.
Since the privately held company launched the innovative product last November, more than 100 marketing campaigns have been run, reaching half a million bank customers. According to a recent AdvertisingAge article, the company expects to have 50 to 70 financial institutions on board by the end of the summer, reaching some 10 million customers by the end of the year.
The program uses transaction data such as the date and amount of purchase, location and merchant to develop special offers by the merchant where the transaction occurred or by a competing merchant in the same category. Imagine an offer from a local restaurant appearing on your statement after a recent purchase from the same establishment. Or maybe an offer from a competing eatery.
The activation of the offer is electronic without any special processing by the bank or retail institution. When the offer is activated by clicking the area on the online statement, it is converted the next time the debit or credit card is used at the participating merchant and the purchase is processed by the bank.
The merchant pays for the online ad to Cardlytics, with a pay-for-performance model with the bank getting a piece of the action. Initial response rates for the program, according to Cardlytics has been very favorable, with the only drawback potentially being the lack of demographic data available for targeting.
This type of turn-key rewards program could expand quickly, using the same type of model and insight that is used for Google with their paid advertising. The success, however, will hinge on a combination of the banking industry's ability to embrace a push-based retailing concept and the customer's acceptance of a perceived sharing of data. As with most new online concepts, acceptance will most likely vary by segment.