TSYS Permission Marketing Brand Loyalty
Loyalty & Rewards

Transforming Marketing In The Digital Age

In today’s digital landscape, where tech-savvy consumers tend to have the upper hand, reaching and engaging with them can be more challenging than ever. A boring email or stale message on social media just won’t cut it – without value, consumers aren’t paying attention. But do card issuers have the power (and information) to change that? PYMNTS sat down with two loyalty-program experts to find out.


When it comes to loyalty-based programs and rewards, many merchants still need to step up their game. Digitally driven consumers need more than just an emailed survey or online flyer for meaningful engagement with brands.

In their new white paper, titled “The Importance of Permission Marketing in the Digital Age,” Morgan Beard, Strategic Marketing Director of TSYS and Andy Kulina, Managing Director of Cambridge Loyalty, take an in-depth look at what it really takes to not only reach consumers today but bring value to their tech-centered lives.

Beard and Kulina joined PYMNTS to discuss what card issuers need to be paying attention to on their pursuit of permission marketing and the pitfalls to avoid along the way. Here’s an excerpt of the conversation …


PYMNTS: In what ways do you think companies can improve their loyalty-based programs?

Morgan Beard: I think that begs the question, can merchants do much better in regards to customer loyalty and the answer there is “yes.” They are in a constant battle there. To provide a little context, an average American household has 29 loyalty memberships and in the U.K. 92 percent of adults have at least one rewards card. Here’s the rub on that however: less than half of the reward programs are actually active, in other words most lie dormant.

It’s pretty evident that there’s no real ongoing value add for consumers after that initial customer acquisition offer. Couple that with the idea that in today’s tech-infused lifestyles people are increasingly willing to exchange some personal data with brands for something of value – whether that’s information, discounts, rewards, etc. That’s really where a card-linked offer comes into play and starts to answer that question of how to improve loyalty-based programs. The aim of the card-linked offer is to bring merchant-sponsored offers that really do fit the lifestyles of the individual cardholder. Banks have the ability to pack this powerful one-two punch that’s not being fully leveraged today.

First of all, they are uniquely placed given their position of trust with the consumers, and second, they sit on this treasure trove of transactional data that can really help craft the customized offers and information that really fits the cardholders’ lifestyles.


PYMNTS: When merchants’ email marketing campaigns are being ignored by their loyalty rewards customers, what are some innovative ways they can add value to their emails and engage consumers?

Andy Kulina: I think what’s happened in the last 10 years is that social media has really changed the way that everybody communicates with each other, especially across digital channels. Just simply having a digital version of a flyer or the old newspaper ad format just doesn’t work anymore. If you look at some of the statistics, search and social click-through rates are eight times and two times respectively more effective. If you’re going to send out an email to your membership base you have to think like Google and Facebook are your agency and Google and Facebook users are your audience.

A good example of that is using a content led message, instead of sending something that says to buy a toilet roll because it’s $.50 off, send a story about why somebody’s life has changed because the toilet roll is suddenly more comfortable. A story or a blog will engage users and that’s what they are used to seeing and sharing and liking. Gamification is another great example. I received an email the other day from a company called 99designs that instead of sending an email off about a discount what they did was send a picture of a lady with a small business and asking, “Which one of these five logos do you think that she chose in the logo competition for her business?” It was a bit of a game, I clicked through to play, got the answer right and then got the discounts. The gamification made me read and engage with that email where if it was a simple offer I wouldn’t have.


PYMNTS: If you’re just in social in order to improve engagement and not doing it right, is that potentially a way to miss the mark or is just being in there a good start?

Andy Kulina: If you send a message through social it’s still a flat, boring “buy this” message and it isn’t going to resonate even though you’ve picked the new medium of social. In the same way, if you send it through email with some sort of social tool like gamification but the game is boring or it’s just a glorified survey, that’s not going to work either. It’s really getting that expertise of learning how to communicate with your audience, whether it’s millennials or a more mature audience, and using that correctly. But more and more, a wider age range and demographic range are all using social media to communicate, so it’s key just getting that message that fits into that forum.


PYMNTS: What brands do you believe have done an exceptional job at creating customer loyalty, inspiring evangelism and reaching a state of intravenous permission in the digital age?

Andy Kulina: I think Amazon is a great example of a global brand that created intravenous permission quite a few years ago when they introduced one-click checkout. They’ve expanded on that and now created Prime, which initially even flew under my radar as a loyalty expert and a loyalty program, but what Amazon Prime absolutely positively is is a paid-for loyalty program that they’ve created almost like a gold status would be in an airline. If you’re a Prime customer you get one-day delivery in the U.K., two days in the U.S., video streaming, lending Kindle books, and of course you still have the one-click offerings as well. It’s created almost evangelism to the point that my wife now doesn’t say let’s Google a product when we need something, she say’s let’s go on Amazon and find it because we just know if it’s there it’s going to be on our doorstep in 24 hours.


PYMNTS: Based on the Amazon model, how do you think brands are determining what their consumers are willing to pay for a loyalty program?

Andy Kulina: There always has to be value for money, so it’s not a price point. It’s what do you get. Amazon had established the fact that if I wanted next-day delivery, that it was a premium service and that was going to cost me $7 or $8 in the U.S. What they proposed was that if a consumer was going to shop on Amazon more than 10 times a year, then Prime makes sense because you’re actually going to save money with your existing shopping behavior. We’ve seen the same thing here in the U.K. with home delivery of groceries, that they started charging different prices depending on what slot you wanted your groceries delivered. It was more prime time if you wanted it between 6 p.m. and 8 p.m. on a weekday evening, but it was very cheap if you wanted at 10 o’clock on the morning of a Tuesday. Quite a few of the home delivery supermarkets now let you have a subscription that you get free delivery as long as you pay for an annual service, so it’s not free delivery but it’s one price and it’s delivery any time at no charge. What that really does by default is suddenly all your deliveries are coming from that one supermarket because if you switch to another then you’re paying again for a single delivery charge.


PYMNTS: Of the four recommendations for implementing a successful permission marketing-driven customer loyalty campaign, which strategy has shown to be the most effective: granular opt-in, macro opt-in, targeted opt-in or value exchange opt-in?

Morgan Beard: When we look at those card-linked programs in general, an issuer’s goal should really be to add value to the cardholders’ lives rather than having that myopic focus on the next sell. Having said that, a real barrier to success is how we ask cardholders to opt-in to offers from the merchant partners in the first place. While we touched on and explore four options in the paper, I’ll address two of them now. The first is targeted opt-in, which is a great way for issuers to ask cardholders to opt-in to offers from a type of merchant or group of products that really reflect their unique interests and lifestyles. The second strategy that we would advocate, which is actually complementary to the targeted opt-in approach, is what we call value exchange opt-in. That’s along the lines of what Andy was just talking about where the issuer is starting to look along the value exchange in each engagement within the purchasing cycle, really developing reasons for deeper dialogue and asking questions to start narrowing the areas of focus and opportunities. We think that approach works really well for longer periods of time between purchase cycles. We see that with mortgages and current accounts, and consumer vehicle leasing, just to name a couple.

As we touched on earlier, it’s the idea that issuers can take advantage of that data to start driving the types of algorithms that we would see with Amazon and start presenting products that might be of interest to a consumer based on their buying habits. The example we talk about is identifying those who might be buying diapers or nappies and could we start tactfully offering life insurance products. That starts to really unlock the promise of permission marketing.


PYMNTS: Are you seeing consumer fatigue around the information that they are being asked to provide or do you think that if the value that’s being offered is so high that the sky is the limit to what they’re willing to share?

Morgan Beard: We see that consumer fatigue in different parts of portfolios. So if you think of it from a persona perspective, there will be those people who are more inclined to dig in and get the most out of a granular approach and those guys might be the ones to spend the extra time answering these minute details. For the majority of the consumer portfolio, you get that analysis paralysis and they’ll just drop the whole thing altogether. It’s identifying how you can approach different segments of the portfolio with different ways to engage them, that’s the critical part. The idea is that we want to give cardholders control and develop them as advocates and make them part of a real partnership, keeping in mind that whole lifetime value and engagement commandment that we’re talking in the paper.

Andy Kulina: There is a risk that a brand can become too intravenous or their goals can be too intravenous as far as permission goes. I think Apple is a good example, where they’re getting close with things like Photo Stream, which is a great way for people to share photos instantly if they have Apple devices, but it’s the assumption where you start to get hooked on all these different tools to go around the products that you almost feel forced as a consumer that every piece of technology you have has to be that brand and that just doesn’t happen in life. A lot of the things that a brand can create that’s a proprietary ecosystem that you can’t introduce 10 percent of a competitor’s tools in there and it starts a bit of revolt, which you see a lot of people moving to Android because it’s a bit more of an open platform. Other brands in other sectors can run the same problem, where as you’ve got to accept that if you’re a fashion brand, people aren’t just going to buy your clothes and your label. They know that, but they just want to appeal to as much of the wallet share in that category they can get. You can’t just try to lock people in with some sort of priority proprietary proposition because they will start to get frustrated.

. . . . . . . . . . . . . . . . . . .

To download the full white paper, titled “The Importance of Permission Marketing in the Digital Age,” please click the button shown below. 




Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

Click to comment