It is essential to adopt an effective approach for building trusted relationship with customers and maximizing business outcomes using data and insights from partners. The combined effort at creating the most relevant offers can be summarized in the following steps:
1. Data Collection
Data is collected and integrated from multiple sources. Banks do have data repository of their customers that includes customers’ demographic data and transactional data. Banks can collate insightful data from their alliance partners.
2. Extracting Insights from Data
Bank’s data along with data received from merchants is integrated and aggregated by writing scripts in programming languages like R, python, databases and SQL etc. to extract meaningful insights of all types of customers. By analyzing customers using exploratory data analysis, univariate analysis and multivariate analysis, deeper understanding of consumers’ habits, needs and spend preferences can be identified. Understanding the debit and credit card customers through their past spending behavior and spending capabilities is the key to developing an effective marketing strategy.
Segmentation is an unsupervised learning technique that can help banking systems identify and categorize customers based on their preferences, buying patterns, and spending habits. Providing lucrative incentives at the right time can help increase cards usage. Segmentation can also help in reducing campaign cost by eliminating customers that should not be targeted. Using the combination of statistical segmentation and business rule, next best opportunities can be identified where the customer is more likely to spend more.
4. Social Media Integration
Business analytics can integrate available information of demographics, transactions, customer capacity and behavior with the social media into a more comprehensive customer profile. This can be achieved by merging social media data insights with the bank’s and merchant’s data. Social media and internet data can be used to determine the customer’s interest, inclination, brand perception, complaints and satisfaction level across different products and merchants. Social media can play a vital role in getting a deeper understanding of the customer in order to refine marketing strategy.
5. Building Offers
It is essential to make a relevant offer to the right person at the right time based on the defined target groups, products and services. An effective and lucrative offer will make the customer purchase more using bank cards since offers would be tagged to cards. Eg. an offer is built for a target group based on insights - if they buy groceries from a particular retailer in the first week of the month by using bank’s card, an additional discount or cashback can be given. Multiple type of promotions and offers can be rolled out to different sets of customers.
- Cardholders can receive new attractive deals and incentives through weekly or monthly emails and SMS messages
- Offers can be based on the latest transactional data
- Instant offers can be made on the basis of internet and social media traffic
- Real time marketing can be done based upon customers’ GPS information
Analytics solutions are generally adopted in isolation by different sectors. Banks are yet to explore the endless possibilities with analytics in collaboration with merchants. They need to understand the benefits and scope for business growth with this kind of collaboration and do the needful to make this possible. This association will not only help banking and merchants to increase sales and cards usage but also benefit customers to get the best deals for the products and services that they look for.