Branded Credit Cards + Loyalty: A Winning Combination

We’ve written before about how traditional loyalty programs that only focus on slashing prices or coupons are not a fit an effective way to build customer loyalty. And what is a loyalty program if you’re not slashing prices, right? (Wrong, actually.) Many big box retailers’ main means of generating loyalty is through a credit card program. There are many benefits of branded credit card for brands and consumers alike. Did you know that 74% of Americans possess a store credit card (source) ? Cardholders receive rewards, discounts and exclusive experiences, while merchants receive a free ad in the customer’s wallet, an additional stream of revenue through credit card fees, and in theory, more “sticky” customers. According to payment industry consultant Robert Hammer of R.K. Hammer, “Just having a card to use will increase store sales by some 28% to 30%” (source). Not all branded credit cards are created equal, however. In this blog post, we’re taking a closer look at ways that retailers can enhance their credit card program to cultivate deeper loyalty with customers. 

A branded credit card alone isn’t enough to grow customer loyalty. Brands can enhance their retention strategy by combining branded credit card + loyalty program. With that winning duo, brands gain the ability to recognize, reward and improve communications with cardholders, improve customer experience for non-card members, and acquire more cardholders with personalized interactions. Here are a few ways that retailers can make their branded credit card for work a little harder for them.

Layer in Tier Behavior Rules  

Add different point earning rules and reward outcomes based on the tier a customer is part of, or based on entrance/maintenance criteria For example:

  • Entrance criteria — Reward 50 bonus points when a credit card customer reaches the next tier 
  • Purchase behavior rules — Silver tier members earn 3 points for every $ spent with a branded card, Gold Tier members earn 5 points for every $ spent with a branded card
  • Event behavior rules — Issue bonus points or rewards when a customer opens up a branded credit card

Construct Qualifying Payment Type Constraints

Gamify the experience for card holders. Provide certain rewards or experiential benefits that can only be earned by using the card. For example: reward customers with 25% off their next purchase if they spend over $100 with their branded card. The required spend may vary depending on your typical transaction size, but the point is as long as members complete a certain action with their card, then they will be provided with a reward. 

Gain Valuable Insights into Payment Data 

Collecting and controlling transactional data from BCC purchases is an issue that many brands deal with. If retailers want their BCC to be part of their digital transformation (and they should), then they need to begin integrating it with their rewards or loyalty program. Customers want a seamless experience and don’t want to be hampered by redemption restrictions. By integrating BCC data with their loyalty program, brands gain the ability to compare sales and transaction count for branded credit card against all other payment types and measure growth over time. 

Target Cardholders with Relevant Interactions 

Activate customer data to enroll loyalty members that don’t have a branded credit card by marketing to your cardholders with relevant engagements and access to exclusive experiences.  

Provide a White-glove Customer Experience 

Loyalty programs are a great way for brands to collect valuable information about customer preferences and behaviors. Customers aren’t giving up their information for nothing though. In exchange for sharing, customers expect brands to provide a more personalized experience, especially if they are a long-time or frequent customer.

Ensure your customer service team has all the customer information they need in order to deliver a seamless customer experience — especially for your branded credit cardholders. 

Brands that combine a branded label credit cards with a loyalty/rewards program achieve greater results because a single program better reflects the simplicity that customers want and eliminates pain points, such as redemption limitations. Mobile payment and related digital wallets are experiencing rapid growth, shifting the commerce sales mix away from traditional card payments. It’s time for brands to start integrating these strategies into their loyalty strategy now.