MasterCard enhances segmented loyalty technique

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By: Wise Marketer Staff |

Posted on May 3, 2007

MasterCard enhances segmented loyalty technique

MasterCard Advisors has unveils a number of new enhancements to its 'Segmented Loyalty Programs' platform, which enables card issuers to design customised promotions and rewards for targeted groups of cardholders.

Perhaps most importantly, the latest enhancements provide card portfolio managers with the ability to identify and categorise groups of cardholders based on their past spending behaviour, and then create offers designed to drive them into new categories of spending, as well as to new merchants.

Customised loyalty rewards According to Mark Shipley, global practice leader for MasterCard Advisors' Loyalty Solutions Worldwide division, the new programme's goal is to boost profitable behaviour incrementally. Thanks to the segmented loyalty programme system's automatic tracking mechanisms, targeted cardholders don't need to show coupons or keep receipts, and card issuers can choose how and when to deliver rewards to cardholders.

"We want to encourage cardholders who have the potential to be more profitable, to influence behaviour, and to extend the use of their cards," explained Shipley. "By scoring cardholder activity against specific parameters using a rules-based engine, we have been able to move cardholders to new and more profitable spending patterns."

Incremental spending The programme has already shown that it can appreciably increase card usage. For example, in several deployments with a large North American co-branded card issuer, the programme helped increase spend inside and outside the co-brand partner's stores. Cardholders were rewarded for buying items in particular store departments, as well as for spending above specified thresholds.

"Loyalty programmes are a key deciding factor for determining a consumer's reliance upon a card," concluded Shipley. "Loyal customers spend more than two-and-a-half times the amount spent by non-reward cardholders over time, and they are also less price sensitive."

Programme flexibility The enhanced programme can apply multiple parameters to a single promotion, rewarding specific behaviour and activity based on time, frequency, and level of spend. Additionally, the system uses aggregated and audited MasterCard data to identify cardholder spend by merchant category code, merchant name, location, and other relevant data from transaction records.

The platform automatically tracks cardholders' spend over the length of each marketing programme and then, when the cardholder fits the required behaviour pattern, MasterCard automatically generates a rebate on the cardholder's statement, along with appropriate reporting to the card issuer.

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