Loyalty & Rewards

Sowing Loyalty And Reaping Rewards


It isn’t points. It may not even be cash back. But it is finding the ‘insight within an insight’ that can change consumer behavior and drive a profitable action. Marti Beller, Group Head of Global Products and Platforms, Loyalty Solutions at MasterCard, tells Karen Webster how issuers and brands can look deep and find them – and loyalty’s Holy Grail.

Loyalty strategies are ever important in a payments world where card issuers battle for customers tooth and nail on interest rates, cash back and rewards offers. Marti Beller, who heads MasterCard’s Global Products and Platforms, Loyalty Solutions division, recently spoke with Karen Webster to delve into the challenges of fostering brand loyalty.

Catch the conversation here.

KW: I think that we have a long way to go here in payments land for loyalty programs to realize their full potential. We are stuck in a huge rut, it seems. What you doing to help change how loyalty is perceived and the value it adds?

MB: It really comes down to what is your definition of loyalty. I see loyalty as those products and services that are complementary to a core value proposition that enhance and drive a significant amount of behavior change — profitable behavior change. 

Most people think of loyalty as a reward constructed around points or miles, but I do think it really needs to speak to a full offering of benefits and solutions that lead to profitable behavior change.

What are the true consumer pain points and needs that exist per segment of consumers that we are targeting? Do we understand the pain point beyond the highest level insights that exist? The insight within those insights can really help us get past the “points as everything” construct to something deeper and more valuable that changes behavior.  

For example, in the payments space security ranks very high as something that people value and care about. They spend mindshare thinking about security as it relates to payments and their own personal identities.  

But in terms of true behavior changes and driving loyalty, security won’t do that – it’s expected.

But once you really understand the consumer pain points and then how to solve them, it’s possible to create a truly famous consumer experience that delivers products and services that solve for that friction.

Back in the day, when reward schemes were a little bit more opaque, travel was one of the most inspirational rewards anyone could give a consumer. After a travel redemption, their behavior significantly increased.

I also think Amazon has proven that you don’t necessarily have to give points as a way to reward and to entice consumers – affluent included — to spend more time and money with a brand.

As the brand, they’ve created the killer app of Prime, and they only added to that over time.  They really have never veered toward the points or miles, and yet garner a lot of loyalty from their consumers because they offer consumers real value: products that they need in one place and an easy way to pay for them. And we all know how being a Prime customer changes behavior: they outspend non-Prime customers 2 to 1.

KW: Let’s talk about the segment that everyone wants to attract today: the affluent. And while points are probably important, there are a number of other things to consider, too. How do you think about the pain points for affluent and how you are solving for them?

MB: We look at the affluent consumer as someone who is very busy. If we could productize giving back time, we would – that’s solving a pain point!  

And it’s not as if affluent consumers don’t care about saving money. They do have money, but also care about saving it – they want what they have to go further.  So when we look at the products and services that we think we want to bring to their lives, we think about it over the full spectrum of saving them time and money but also as this segment being a primarily digitalbydefault consumer segment. The question for us then becomes, how do we create an experience that maps with their everyday lives?

KW: How do you think about data and the application of data in creating a new loyalty paradigm?

MB: The Holy Grail is access to real-time data right now with what will drive that consumer experience in a pleasantly interrupted way versus an unnecessary or unwanted, interrupted way.

Let me give you an example. Let’s say my travel is being delayed and I, as a value-added solutions provider, can interrupt that with an offer inside of an airport that makes the experience just a little bit better – maybe it is a glass of wine at a restaurant near my gate. Or an express manicure. That’s the kind of Holy Grail that a pleasantly interrupted, yet seamless consumer experience can deliver. The consumer then can associate MasterCard and/or the issuing bank that they have loyalty to as providing them with value exactly when they need it.   

I also think that our “Pay with rewards” is the best example of a hyper personalized seamless consumer experience.

Cash as a reward can be tough because cash doesn’t drive that same emotional response as other types of more tangible rewards. Pay with rewards makes cashback inspiring. And while there is very little intervention that consumers need to do other than setting up how they want to use their points — which can be fun to think about — there is that engagement on the backend to remind the consumer of the value that’s been given at the point of sale. We don’t want to be seamless to the point of invisibility. We want to be seamless to the point where it just becomes part of a consumer’s life and then is translated to a quick text message on screen that says “congrats you didn’t pay for that, you got it for free” – thanks to MasterCard’s pay with rewards, of course.

Those experiences like that we can power because we have a massive amount of data available at our fingertips that can be used to power that consumer experience.

KW: In a philosophical debate about loyalty and its intention, some people feel as though investments in loyalty are being wasted on consumers who are already loyal to the brand and that money should be shifted to new customer acquisition. What’s your philosophy with respect to loyalty and how it should be targeted?

MB: A brand’s products and services must drive profitable behavior change for the brand. From my perspective that happens across the lifecycle from acquisition and activation to engagement or usage and ultimately retention. 

So, it’s where the combination of everything from soft benefits to offers to rewards all matters. Some things are much better drivers of activation than they are retention and some things are much better at acquisition than engagement. This portfolio approach is essential if you want acquire, activate, engage and retain a user – and change their behavior.

That is where our data analytics helps us understand that everything we are doing on behalf of our client is driving profitable behavior that they wouldn’t otherwise get without the solution — and to me that is the true definition of a loyalty solution.


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