Banks and You: A New Approach to Consumer Loyalty that Benefits Your Wallet

Every morning, Groupon, LivingSocial and a variety of flash sale sites flood my inbox with offers for just about everything…yes, including the proverbial kitchen sink. Only today I received deals for a pedicure, termite eradication, teeth straightening and an off-season cruise to Alaska. However, I am simply not traveling across town for a pedicure, have no termites, my teeth are straight enough and I don’t want to go to Fairbanks.

Shop and Save
If you are looking for easy ways to shop and save, wouldn’t it be more useful to receive rewards on what you are actually buying? And wouldn’t it be more practical to have funds directed straight back to your bank or credit card rather than having to print and carry coupons around, remembering to use them before they expire? Or waiting to see if two hundred others want that pedicure or a haircut across town before the deal is declared on? Or even worse, if it is a pre-paid voucher that is left unused, representing money gone down the drain.

Money for you
You may have heard of Offermatic, which can serve up relevant deals once you have signed in, but I found a free service that is growing through sign ups with the banks. The one to watch is Atlanta-based Cardlytics, founded in 2008. This customer-based loyalty program offers cash rewards straight into my bank account, which has saved me about $50 in just the past few months.

Offers that work for you
Through a highly relevant, “market- of-one” approach, Cardlytics unites banks and merchants to provide rewards to customers based on the things we buy. Let’s face it, our bank and credit card companies already know where we shop and what we buy.

“These offers are based on where the consumers actually spend their money,” says Rod Witmond, Cardlytics senior vice president of product management and marketing. “The targeting is about as accurate and secure as you’re going to get because we enable the bank to present relevant offers based on purchasing behavior – all with no personally – identifiable data being used and no transaction data ever having to leave the bank.”

Growing trend
This kind of transaction-driven marketing is expected to grow into a multi-billion dollar industry in the United States over the next four years, according to Aite Group , a Boston-based financial research leader. “It’s better than Groupon and LivingSocial,” Madeleine Aufseeser, senior analyst, is quoted as saying in a CNNMoney article (July 6, 2011). “Consumers are now going to see offers they’re actually interested in.”

How does it work?
As an example, imagine stopping at Starbucks and being offered a reward for $1 for your next coffee, or (and here’s the magic for retailers) a discount from a competitor coffeeshop. Simply make your purchase with your credit or debit card the next time you visit and the reward is credited back to you – nothing changes at the point of sale.

How about my bank?
Cardlytics currently has about 200 campaigns running on its network. It will be launching with two of the top five national banks by the end of 2011 and will have access to 70 million households and almost 180 million consumers. Among the banks and credit card issuers already participating in transaction-driven marketing are Wells Fargo, Citi and Discover. The ones to watch are U.S. Bank, Barclays, TD Bank, PNC and Visa, according to CNNMoney.


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