How to Increase Wallet Share with Intelligent Location Technology
By Batu Sat, Ph. D.
Founder + CEO, Mall IQ
At Mall IQ, we have helped Banks & Payment Platforms for five years across three continents to improve their customers’ understanding and engagement to keep their customers loyal and strengthen their most important KPIs.
Being part of the FIS Fintech Accelerator, in partnership with The Venture Center, is an exciting journey as we’re connecting with financial services leaders from all over the world. Over the past few months, we’re sharing our compiled set of principles that would help banks & payment platforms to improve activation, frequency, wallet share, retention, and up/cross-sell for their products, such as credit cards, personal loans, deposit accounts, and more. We hope these tips will be useful for any readers in the future.
Bank and payment platform marketers need to make sure they follow these guiding principles:
-
Understanding the Complete Customer Journey in the Physical World is Key
-
Each Bank Only Has Access to its Own Transaction Data
-
Real-Time Actionable Insights Are Key
-
Time is Precious for Customers – Now More than Ever
-
Precision & Purchase Intent Visibility Make a World of Difference
-
Trust and Value are Key for Acquiring and Retaining Location Permission
Understanding Complete Customer Journey in the Physical World is Key
Getting customers to be loyal to your brand is hard – keeping them loyal is harder. Marketers need to understand the complete physical customer journey and segment their customers based on behaviors and needs.
When the customers receive 1) relevant, 2) real-time, and 3) personalized campaigns they feel appreciated, delighted and cared for. This is the tipping point for customer loyalty. Emotional loyalty is the strongest form of customer loyalty, once bonded it lasts for lifetime as it is not driven by behavior, habit nor rationality.
Each Bank Only Has Access to its Own Transaction Data
Today customers have access to many payment platforms. In addition to the accustomed retail bank credit cards (customers have an average of four), mobile payment systems and digital-only banks are emerging as alternatives. Therefore, every bank can only analyze a portion of their customers’ journey, based on each of their wallet shares – where, when and how much is spent by their customers.
Real-Time Actionable Insights Are Key
However, what the customers bought yesterday is not indicative of what they want to buy today.The worst feeling for a customer is receiving an offer just after they bought something they could have used the offer for. The financial institutions not only have to know their customers, but they also need to be proactive. The ability to capture the full customer journey will enable them to deliver the right offer to the right customer real-time – exactly when they need it.
Time is Precious for Customers – Now More than Ever
With Covid-19 re-shaping the societies, customers are less willing to spend a lot of time out-of-home. It is a fact that when they need to purchase offline, customers make fewer store visits and spend less time in each store. Therefore, capturing the customers’ attention and delivering personalized offers at the right location and at the right time is now a more critical task for marketers – they need to understand customer purchase intent. And where the customers spend their precious time is very indicative of their intent to purchase.
Physical customer purchase intent is hard to measure. It is not a stated need as it is in the online world, where the customer types what they are willing to buy on the search engines or websites. In the physical world, store-level indoor and outdoor location intelligence technology enables the measurement of customer purchase intent.
Precision & Purchase Intent Visibility Makes a World of Difference
The previous location intelligence practices fall short in terms of store-level precision. GPS is not precise enough. It only shows the customer is near a shopping mall, which might have 100-200 stores. However, to pinpoint the purchase intent, store-level precision is necessary. And using hardware to achieve store-level precision such as beacons or cameras is not practical or feasible.
Store-level indoor & outdoor precision gives the banking marketers the expanded view of 360 degree customer journey. With this capability, marketers will have access to transaction data, which currently is limited to their wallet share. They will also have the ability to understand where the customers spend their time and most likely make purchases with other payment methods – to which they have previously been blind.
Trust and Value are Key for Acquiring and Retaining Location Permission
It’s a fact that customers who share their location have higher lifetime value, and they’re more likely to engage, click, and redeem offers. So marketers need to win their customers’ trust for them to share this information.
Location permission acquisition is similar to user acquisition. With a banking or payment mobile app, this is relatively easier – since the customers trust the bank with their financial assets, they will be more likely to share their location data. Customers need to trust the app to share their location. The theoretical value has to be conveyed clearly before asking for permission and should be asked at the right time; i.e. “never miss new offers in your area.”
Once the location permission is granted, customers need to see the practical value within the first few weeks. The best way to ensure this is to have an onboarding scenario, similar to the customer welcome phase. A location-based personalized offer or even just the list of available offers in the specific area clearly stating that this notification was sent based on location permission would suffice as a starter. Additionally, real-time and relevant offers sent to these customers will create a viral impact in their social circles, as their friends or families will wonder why they did not get these offers.
Case studies with our partners show that:
● Once users receive a location-based push notification in the first week, they are 2.4x less likely to stop sharing their location permission – if the offer is redeemed, this goes up to 11x.
● Overall, location permission percentage can be easily doubled in 6-9 months when the customers experience practical value.
As a wrap-up, let’s summarize the building blocks for sustainable customer loyalty:
● Understanding the Complete Customer Journey in the Physical World is Key
● Each Bank Only Has Access to its Own Transaction Data
● Real-Time Actionable Insights are Key
● Time is Precious for Customers – Now More than Ever
● Precision & Purchase Intent Visibility Make a World of Difference
● Trust and Value are Key for Acquiring and Retaining Location Permission
About Mall IQ, Inc.
At Mall IQ, we develop Mobile Location SDK, Campaign and Analytics Dashboards to empower our customers to improve their major KPIs such as Activation, Frequency, Wallet Share, Retention and Up/Cross-Sell via Real-Time Mobile Engagement, Segmentation & Personalization. We offer the most scalable Location Intelligence & AI Platform for banking mobile apps that is store-level accurate indoors & outdoors w/o any hardware deployments. We deliver a privacy-first Location Intelligence service, empowering Financial Institutions to deliver anonymous personalization at scale. Mall IQ has customers in the US, Europe, Middle East and SouthEast Asia.