Competition between banks and fostering loyalty

As in many sectors, competition between banks has become increasingly intensive. Customers are becoming more savvy about their options, and are more willing to switch providers in search of a better deal. Banks themselves are offering “golden hellos” such as cash bonuses or free insurance, to entice customers away from their rivals. In addition, new banks are emerging to challenge the established players, often by offering products managed only online, and can tempt customers with lower, or non-existent fees and charges. While these may be successful in attracting new customers, they are not enough to satisfy current customers – who may switch bank to take advantage of an introductory offer available from another provider – nor do they provide an incentive for new customers to become, and remain, a loyal customer.

Loyalty Pass

With this in mind, Ogloba have implemented a promotions program called Loyalty Pass. Based on their industry-leading gift card platform, it provides banks with a loyalty program for their customers, and offers advantages through a network of partner retailers.

How it works

The bonus rewards and discounts offered through the retailer are paid for by the bank, and processed by Ogloba. The program is based on Bank Identifier Numbers (BIN), also called Issuer Identification Numbers (IIN). The first 6 digits of a BIN code show which bank or institution issued a particular card. Using this information, the Ogloba platform allows promotions to be activated only for customers who pay using cards issued by the sponsoring banks. For example, retailer A may offer a 5% discount on every $100 spent, or a free gift, but only if the customer pays using a card issued by their partner bank. Customers paying by any other payment mean cannot avail themselves of the bonus.

This program offers benefits to all stakeholders. Customers enjoy receiving the rewards, and feel that they are being rewarded by their bank and the retailer, fostering a sense of loyalty to both. Retailers benefit from the growing sense of loyalty this group of customers develops, who are more likely to shop in their store, shop more often, and spend more. Banks also benefit from this sense of loyalty by retaining customers, and giving these customers a reason to use their credit card more often.

Loyalty cannot be taken for granted, and organizations must be pro-active in offering incentives to their customers – and not just any incentive. The offering must be something that customers want, and makes them feel valued and appreciated.

Promotion Configuration

Loyalty Pass can be configured in fine detail, allowing the bank-retailer partners to specify exactly the kind of rewards and bonuses they wish to offer. A promotion can be set for specific weekdays, during a period (date range), or on a certain date every month. For example, the promotion could be configured in one of the following ways:

Option 1: Promotion every Monday and Friday
Option 2: Promotion from 1st February to 1st August
Option 3: Promotion 1st of every month

If several promotions are running at the same, it is possible to give them a different priority during the same period. For example, Promotion A may offer a 5% “Tuesday” bonus, while Promotion B offers a 10% reward every 1st of the month. If the 1st of the month falls a Tuesday, the bonus can be configured so the customers receive the more generous “1st of the month” bonus, but only that bonus.

Discount Promotion

There are two types of promotion, Direct Discount and Gift. A discount promotion provides customers with a discount, defined within certain conditions and parameters. For example, the discount could be set up with one or more of the following conditions:

Option 1: Discount rate – get 10% discount
Option 2: Discount scale – spend $100 get 10% discount, spend $150 get 15% discount, spend $200 get 20% discount
Option 3: Customized discount scale – spend $100 get 10% discount, spend $500 get 20% discount, spend $750 get 40% discount
Option 4: SKU based – you buy 2 bottles of cola, you get a 10% discount.

Promotions also need a trigger event to activate the discount. This could, for example, be one of the following:

Option 1: Get the discount with no condition
Option 2: Get the discount when you reach a minimum transaction amount
Option 3: Lucky draw – get the discount if you are the 1000th customer of the month
Option 4: Lucky draw store by store – get the discount if you are the 1000th customer of the month at this specific store location.

Retailers and sponsoring partner banks may wish to offer limited rewards, so a maximum discount amount, and the maximum discounted amount in a period can also be set. The promotion rules could be defined so a maximum of $1000 in discounts, per card, is allowed in a 3 month period.

Gift Promotion

A gift promotion provides customers with a gift instead of a discount but works in a similar way. A trigger event, plus gift configuration, must be applied.

  • Choose the event that triggers the gift

Option 1: Get the gift with no condition
Option 2: Get the gift when you reach a minimum transaction amount
Option 3: Lucky draw – get the gift if you are the 1000th customer of the month
Option 4: Lucky draw store by store – get the gift if you are the 1000th customer of the month at this specific store location.

  • Choose the maximum quantity of gifts

Spend $100 get an umbrella, spend $200 get 2 umbrellas, but the customer can only receive a maximum of 10 umbrellas.

  • Choose the condition to give the gift

Option 1: Scale by amount – spend $100 get an umbrella, spend $200 get 2 umbrellas, and so on.
Option 2: Scale by amount with different gifts – spend $100 get an umbrella, spend $500 get a raincoat, and spend $1000 get a camping tent.
Option 3: SKU based reward – buy 2 bottles of Pepsi, you get a free branded glass.

Frequency Limitation

To control the number of discounts and gifts that can give to customers, the Frequency Limitation of a promotion can be configured in detail. It can be set so the promotion can be gained:

Option 1: X times per card (user)
Option 2: X times per day
Option 3: X times per week
Option 4: X times per month

Store Type

A Store Type parameter allows the promotion to be activated for all stores, or only certain stores. For example, seasonal promotions would be active across all stores, but when a new store opens, or when a store re-opens after refurbishment, a promotion would be limited only to that particular store.