Store-Branded Credit Cards & the Customer Retention Ripple Effect

In the current highly competitive climate of retail sales, consumer behavior is evolving. The internet has enabled businesses to market to customers 24/7, and the result is a double-edged sword for most businesses. Customer acquisition is a tough battlefield, since consumers are overwhelmed with choices and offers while browsing from the comfort of their home. Customer loyalty and retention is also increasingly hard to inspire when so many alternatives are only a click away. Store-branded credit cards however, continue to be a customer retention anchor point, giving customers a tangible reason to return to your store time after time.

Instant Issuance is quickly gaining popularity in today’s card marketplace and retailers are taking notice. Launched in 2014, IA360° introduced Instant Issuance, a global retail first and an innovative way for organizations to acquire new customers instantly. The program is designed to create a positive in-store experience and encourages customers to spend on their newly-printed card within minutes of application.

Here are 4 benefits of store-branded credit cards:

  1. Activation Rates Increase

Top priority for co-branded cards is to instantly issue that card to enable immediate activation and usage while they are still highly engaged in your brand. MasterCard advises that it’s best to introduce a store-branded credit card to customers during their shopping experience. This allows the sales conversation to take place in a relatable context, allowing them to immediately contemplate the benefits. Instant Issuance more than doubles activation rates.

Being able to instantly issue cards is a major benefit, allowing businesses to capitalize immediately on the newfound customer relationship and the customer’s sense of satisfaction at being ‘approved’ by this brand.

  1. High Repeat Sales Rate

Once you have converted leads to customers, the next key metric to improve is the Early Repeat Rate. If the card has been issued while the customer is in store, then it’s likely the customer will use the card that day and will return to the store and use that card again. Instant Issuance has proven top of wallet status with 3x multiple merchant spend that same day.

Store-branded credit cards usually offer great incentives to encourage repeat sales and compete with alternative cards to become the ‘front-of-wallet’ card of choice. They typically offer percentage cashback, free gifts or low interest rates. Used on a regular basis will bring the brand in front of the customer again and again, and as a relationship develops that pushes the customer further into the loyalty funnel.

  1. Big Data Insights

In the era of Big Data, consumer data is crucial for several business activities. Information is knowledge and knowledge is power. As customers use the store-branded credit card, a vast array of data becomes available, the analysis of which reveals valuable information on both the customer and store products. Analysis of trends, patterns and shopping behavior, all allow you to ascribe better segmentation rules to your base, and to market more efficiently to both potential and existing customers who fall into these segments. This delivers a powerful competitive insight that will send your conversion rates soaring.

  1. High Customer Lifetime Value

As the actionable insights from store-branded credit card usage help stores to push consumers further along the loyalty funnel, the Customer Lifetime Value increases in line with the customer having a more meaningful – and more profitable – relationship with the brand. Store-branded credit cards greatly increase the customer lifetime value; as the customer’s value increases so do the loyalty rewards, keeping the customer in a value loop that benefits both the customer and the business.

 

IA360° is proud to be one of Canada’s top providers of Instant Issuance which has had transformative benefits for our clients, and created a paradigm shift in the retail and financial industry. For more information, please contact info@IA360.com