'Behind the Wall' Loyalty
Published in CSP Daily News
Merchant-backed solution provides loyalty option behind bank firewalls
ATLANTA -- For convenience store retailers examining all angles of the loyalty question, one transaction-based, marketing-solutions provider has built a system that resides behind member banks' security firewalls.
Cardlytics partners with about 215 banks, which use the company's platform to deliver relevant advertising messages and discount offers to customers based on purchase history, said Marc Ginsberg, executive vice president of merchant services for the Atlanta-based company.
The model means that the retailer no longer has to collect customer data, as in traditional loyalty paradigms. C-store retailers have often commented on the need to reach out to loyalty customers with relevant messaging, and the burden of having to provide incentives to get cellphone numbers and emails.
With the Cardlytics model, banks hold the purchase information, which flows in naturally as customers roam about their daily lives buying things with their payment cards. If customers make a purchase relevant to the retailer, they receive a message, coupon or discount that may help sway their behavior.
"Let's say a customer visited c-store 'A' and bought something with his [bank] card," Ginsberg told CSP Daily News. If Cardlytics were "working with c-store 'B,' that customer may receive an offer of 10% cash back to use the card at c-store B. It's paperless and targeted."
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In field tests involving c-stores, he said they have been able to help retailers increase trial visits, coax infrequent customers to visit more often and re-engage customers who've lapsed.
The business model enhances data security in that "we deploy behind the bank's firewall," said Rod Witmond, senior vice president of product management and marketing for Cardlytics. "The bank has control over that half of the application and the data, and can easily deploy [offers or messages] to mobile phones [and even] ATMs and Facebook."
Founded in 2008, Cardlytics now reaches up to 18 million households and 55 million consumers, numbers it projects to more than triple by year's end. Cardlytics' advertising platform enables banks to deliver relevant rewards to its customers based on purchasing history while protecting privacy, the company said. The platform is merchant-funded with advertisers targeting consumers based on spending patterns.