One of the biggest gaps in current card-linked offers is their lack of insight to credit union members' specific product and brand choices within a basket of purchased items. Approximately 90% of promotional marketing dollars are associated with consumer packaged goods and other product manufacturers' brand-driven deals and coupons. Unlocking those funds for promotions is where the big opportunities lie in mobile wallets.
The challenge with the current "offer mall" approach of card-linked offers by the early entrants is that it is a very tiresome user experience. The old offer mall approach ends up training pre-disposed credit union members (merchant customers) to look for discounts. Discounts are not the only way to benefit and motivate credit union members (merchant customers). In serving merchants, credit unions don't want to train the member/customer to only look for a brand when they want a discount. The old offer mall model has a very high risk of needlessly discounting for pre-disposed customers.
Another problem with current card-linked offers is that they are alwayspost-sale. The most effective offer activation model is to get out in front of the sale, or before mobile payment and check-out as we do with our Five Mobile Trigger Points:
- Discovery, locating and navigating
- Presence Detection, check-in and data-driven personalized offers
- In-Store enhanced customer self-service
- Mobile Payment and check-out
- eReceipts, post-sale promotions and social sharing
Most current card-linked offer programs have yet to be optimized and integrated into mobile banking apps. Credit unions need to plan now to integrate the account level offers at the mobile wallet level and thus be most influential before, during and after the actual point of sale.
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The most effective link comes before the payment, say inside a shopping list in the mobile banking app. Shopping list linked offers is a proactive posturing with the member that enables a full understanding of the member's intent to buy. Card-linked offers are activated after-the-fact with only prior purchase history, pre-disposed to the brand, driving at best competitive ads and offers from other retailers, and at worst increasing cost by needlessly discounting to loyal customers that are pre-disposed to purchase from that brand to begin with.
Current card-linked offer programs are not tightly integrated into the Five Mobile Trigger Points that come before mobile payment and check-out inside mobile banking apps because few, if any, financial institutions have implemented mobile payment.
The other challenge for card-linked offers is they typically do not facilitate a net settlement experience at the physical point of sale. When these offers arrive one month after the sale there is no immediate gratification or emotional connection to the purchase trigger, thus further diminishing the effectiveness of the card-linked promotional method. Credit unions that enable a net settlement system providing immediate gratification to the credit union member upon activation and redemption of the offer will gain an early adoption lead.
Only proprietary, private label card-linked offers are likely to get integrated into the Five Mobile Trigger Points of the retailer's app. The Merchant Customer Exchange is probably working to build this capability into their own app on behalf of their participating retailers. Launching offer capabilities in the credit union's own app gives them a fighting chance through a common platform approach between merchants and the participating credit unions.
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