Viewpoint: The Power of Push Marketing with Good Data and Analytics

By Youri Bebic, Cachet Financial Solutions Inc.

Financial services is a business rich in data. By the very nature of what they do, banks, credit unions and other financial services firms have amassed mountains of data about customers, their channel preferences, payment habits and loyalties, for example. But simply having information is not enough. Real value comes from the analysis and timely application of knowledge through push marketing campaigns and ongoing product improvements. With the right backend support, a prepaid provider’s mobile app can be one of its most effective tools in this effort.

At last count, more than a million apps had been created for mobile devices, and new apps continue to hit the market daily. But recent data suggest most apps sit idle on consumers’ mobile devices. To stand out with consumers, mobile apps must be relevant, engaging and they must deliver real value when and where it counts.

Consumers are quite discriminating in what they want from mobile marketing messages. A survey of 1,200 adult Americans, conducted in April by Hipcricket Inc. revealed that 66 percent had received text messages or mobile alerts for a product or service. However, a third said the messages offered no value. Forty-six percent said the messages weren’t relevant to their interests, while 52 percent said the messages were “intrusive or spammy.” But here’s the good news: Consumers are eager for relevant mobile marketing messages. In fact, 41 percent of consumers surveyed said they’d be willing to share more information about themselves with companies in exchange for relevant offers and coupons.

Relevance is the key. Although financial institutions and other prepaid card providers have more information about consumers who use their products than most other consumer-facing businesses, much of the data they possess is static, offering little in the form of real intelligence about cardholders. A preponderance of information silos (especially among legacy players) is one reason. There are also constraints around corporate resources needed to store and analyze data. None of this has been lost on consumers who in survey after survey complain that most financial services providers simply don’t understand their needs.

Better Analytics Equal Better Relationships

Fortunately, the evolution of technologies, such as cloud computing and sophisticated data analytics, has eliminated many internal obstacles to better analytics. New tool sets readily available in a software-as-a-service (Saas) model help prepaid card providers identify customer segments that matter, strategies for increasing card spend and other insights that help to win and retain profitable customer relationships.

From a prepaid provider’s perspective, an individual’s behavior patterns—such as when and how they use mobile apps—is far more telling than static information like account balances. Providers need tools that take them beyond simple transaction data and help them to understand what card features and services are most relevant to customers and to take appropriate action when necessary.

The ability to leverage precisely timed mobile marketing messages offers unparalleled advantages for prepaid card programs, including the ability to be heard over a chorus of promotional noise that finds its way to consumers’ mobile devices. Research by consulting and technology firm CapGemini suggests that banks applying analytics to customer data have a four-percentage point lead in market share over those that do not.

Sophisticated analytics also can help prepaid card issuers manage the overall effectiveness of their prepaid card programs and individual features. In a competitive marketplace, simply knowing that someone is using your mobile app isn’t sufficient. Companies need to know when customers are logging on and when they’re not. They want to know what functions their prepaid customers are using, when, and how long they stay logged on. Being able to monitor prepaid programs on a granular level like this helps programs stay fresh and relevant.

For example, culling through detailed mobile data, a provider can identify those customers who have used mobile check deposits to fund their prepaid accounts in the past but haven’t done so in more than a month. Then, by reviewing past transaction information, the provider can determine when those customers typically deposit paychecks and schedule mobile alerts on those days with incentives to use mobile deposit rather than taking their paychecks to bank branches or check-cashing establishments. There are mobile prepaid solutions in the marketplace today that can support these types of push marketing campaigns; not just with analytics but with user-friendly messaging tools as well.

As prepaid card providers become more accustomed to the capabilities and benefits of analytics they can further enhance service with insights into changing customer preferences and viable responses. This, in turn, will support better cross-selling through segmentation and will enhance customer offerings.

We know consumers value products and services that address their needs and desires. Reloadable prepaid meets the needs and desires of a growing base of consumers. The proof is in the numbers: At least 12 million Americans use reloadable prepaid cards at least once a month, according to a report by the Pew Charitable Trusts. For growing numbers of these consumers, mobile is the preferred way to access their accounts. One question this should raise for prepaid providers is how best to incent these customers to use more services. While the specific answers may vary, the implementation tools remain the same and are built around sophisticated, user-friendly analytics and push-marketing techniques.

Case Study: Navy Federal Credit Union

Navy Federal Credit Union, the world’s largest credit union, discovered this firsthand by adding mobile money management functionality to Visa Buxx, a reloadable prepaid card program the credit union offers parents and their teen children. Parents and teens can use the Buxx app to monitor balances, find nearby branches and ATMs, and to receive and respond to messaging. Additionally, teens can use the app to text parents for more money, and parents can initiate immediate transfers to Buxx accounts from their Navy Federal debit and credit cards.

Navy Federal supports Buxx with a SaaS solution enabling it to monitor everything that happens through its mobile platform in near real time, with data uploads at the close of every user session. It can readily access insights, such as how regularly cardholders log on with their mobile phones, for how long, what pages they visit and what functionalities appeal to which customer segments. Plus, it tracks all types of performance metrics. Equally important, the platform incorporates automated tools that enable Navy Federal to act quickly and effectively on the analytics provided. Composing and initiating push marketing campaigns is as easy as completing an online form.

The customer response to the Buxx mobile app has been phenomenal. In the first six months, alone, 45 percent of Buxx cardholders downloaded the app to their mobile devices, and mobile reloads now count for more than 10 percent of all reloads.

Push marketing is no longer just an idea, but a necessary operating strategy for prepaid providers. It’s certainly less intrusive than direct mail, or generic emails and text messages. With the right tools, push marketing can be made informative, personal, timely and actionable.

Being able to understand customer needs and to match just-in-time offers that are in sync with those needs is a mark of success for any consumer-facing enterprise. Prepaid card providers are no exception. Augmenting prepaid cards with mobile money management functionality that’s rich in analytics and easy to use will help to improve issuer decision-making, drive customer loyalty through better service, and ensure a card issuer’s ability to respond quickly and effectively to evolving customer and market situations.

Youri Bebic is senior vice president of mobile innovations at Cachet Financial Solutions. He has more than 16 years of experience in prepaid banking, mobile payments and telecommunications in the U.S., Europe and South America. He is fluent in English, Spanish and French, and has a master’s degree in international business. Reach Youri at [email protected].