Guest blog by Margot Vaughan, MasterCard
Whether you call it mCommerce or eCommerce or social commerce, the digital economy demands new strategies for financial institutions. According to eMarketer, by 2020 eCommerce will top $3.4 trillion globally. By 2019, mobile commerce will reach $380 billion and account for 27 percent of all e-commerce spend. Active eCommerce cardholders spend three times more than digitally inactive cardholders. And active users of a digital wallet (such as MasterPass) spend six times more than the average customer, according to MasterCard data.
A key talking point here at America’s Customer Festival will center around relationship strength. That’s true for every industry and particularly true in the financial services space. One of the most important strategies to be updated to increase relationship strength will be “card on file” (COF) technology with enhanced security through tokenization. Very simply, COF is critical in e-commerce. It accounts for 50 percent of all e-commerce spend according to MasterCard data and merchants are increasingly encouraging cardholders to leave a card on file to establish long-term relationships.
Let’s look at four key tactics to drive COF strategies in the digital world:
- Messaging and communication: Look at customer interactions as a chance to leverage trigger points to drive COF. Embedding COF benefits at the reactivation of cards or as part of the on boarding process will reinforce COF benefits and usage. This messaging can be integrated into existing communications such as online banking statements, emails, text messages, or standalone flyer.
- Promotional incentives: Creating an effective COF promotion means targeting the clients with no e-commerce or low e-commerce spend with an offer that will drive uptake. Effective COF incentives here include limited time opportunity to earn rewards or the offer of a discount or statement credit.
- Ongoing value propositions: Building COF benefits into the product features will encourage strong digital commerce behavior and encourage cardholders to maintain their accounts over time. Issuers should highlight new or existing account features related to customers’ recent activity.
- Utilize Automatic Billing Updates: Once the customer has established a COF make sure that automatic payment transaction messaging will boost customer satisfaction. Automatic billing updates prevent disruptions due to account changes, lost or stolen cards, expiration date changes, upgrades, portfolio sales or brand flips. Enrolling in automated billing updates can significantly reduce customer churn and work for both recurring and COF payments.
Creating a specific customer approach for the COF strategies based upon specific needs and pain points is essential. Customer experience benchmarking, customer segmentation and a digital wallet readiness assessment will help maximize digital commerce and improve customer relationships for the long term.
Margot Vaughan is joining us this year at America’s Customer Festival to lead to round table on “Leveraging analytics to drive actionable results throughout the customer loyalty journey.” Register today >