By Carolyn Corda, CMO, ADARA
Financial brands, and particularly credit card businesses, used to lead the way when it came to customer targeting. Using a wealth of spending data and credit agency reports, card companies were able to identify users most likely to be interested in a certain type of credit card – enabling fantastic marketing capabilities.
However, innovations in data tracking, collection and analytics mean brands in every sector are now able to profile and target potential customers for marketing, and they’re leaving these former financial trailblazers behind. In fact, a study found that 94% of banking firms can’t deliver on personalization.
While relying on insights from organizations such as Experian and Equifax can give an indication of who may be a creditworthy target, there is a much bigger picture to be seen. It’s off to the side of the bulls-eye, as it were. By delving more deeply into specific customer buying preferences, financial brands can tailor marketing messages effectively, securing high-value future customers with compelling marketing offers.
Take travel data. People’s travel habits can be incredibly diverse. Habits range from one customer to the next, and – complicating the picture further – even from one trip occasion to the next for the same individual. Understanding their travel choices and what drives them can help paint an intimate profile for pinpoint personalization.
What insights might we glean from the ‘high-low’ traveler, for instance? Many companies would segment their audience by wealth and spending power, but the high-low traveler subverts this idea. This is a growing group of travelers whose wealth ranges from modest to very comfortable. They choose no-frills transportation, even though they could afford a higher-class experience. But, when they arrive at their destination, their choice of accommodation is markedly upscale.
If a financial brand were to target these customers based solely on their flight choices, there would seem to be little value in offering air miles. But, combining this insight with hotel choices it becomes clear that good deals on luxury and membership of privilege schemes would be a sought-after benefit.
Merging spending insights with demographic data adds yet more colour. Recent research from VisitBritain.org into luxury travelers discovered that American travelers book direct, while Chinese and Gulf travelers use packages, needing more guidance and reassurance. Gulf travelers, in particular, value the use of concierge services – something financial providers might consider a useful value add to a credit card benefits package.
A sophisticated approach to data delivers far more usable customer insights than taking a broad brushstroke approach. Isolating populations, not by their purchasing power but by their purchasing behaviour will help financial brands get a much better sense of what appeals.
Some skepticism has crept in recently about the value of personalization. A recent report stated that 80% of marketers would stop investing in it by 2025. They put this down to the challenges of managing data correctly and the fact that it doesn’t seem to live up to its financial promise. But perhaps it’s the personalization efforts themselves that are failing to live up to their promise. Personalization means more than good creative in advertising – for credit cards, it can mean the type of offer, incentive or even product – whether that be cash back, air miles or loyalty points. For example, if traveler data tells us that an individual is a frequent international flyer, offering a card that waives foreign transaction fees could be a hugely compelling incentive to that person.
Research from Boostify found that 80% of customers react positively to companies that treat them as an individual, but only 20% of customers feel that any brands understand or cater to them. It’s easy to see how, without taking the time to understand data context, most customers are falling through the cracks. Target those ‘high-low’ travelers with budget hotel offers and it’s not hard to see where personalization strategies can stumble.
From service delivery to the creative approach, brand communications and personalised offers, understanding how customers behave and their preferences beyond their financial walls is vital. To move offers from relevant to compelling, traveler data in context is a uniquely rich source of insight into what customer’s value. It has the potential to rewrite the rules on what a great customer experience for credit card customers means – and credit card companies would do well to ensure that they are the first to lay down the new groundwork on how compelling they can make their offer.