Big Data Opportunities FlockTAG Uses Data Analytics to Boost Cardholder Compliance and Transaction Lift
Data analytics is a huge untapped opportunity for companies involved at the point-of-sale (such as companies offering credit cards, declining-balance cards and loyalty cards). When done correctly, the predictive mining of data allows these providers to extract and utilize critical information about consumer behavior, emerging retail trends and effective advertising approaches. Failure to incorporate data analytics into business planning and strategy can prevent a company from taking appropriate action and put it at a competitive disadvantage in the marketplace.
At FlockTAG, we don’t make guestimates or leave anything to chance. We have built sophisticated data-analytics models and incorporated computer intelligence into our loyalty rewards platform to ensure we stay on target. These cutting-edge tools allow us to understand what economic benefits are needed to incentivize usage and motivate passionate regular usage of our platform.
Our modeling is based on extensive data we’ve collected over several years on 4.4 million transactions made by college-age FlockTAG users. With the help of experts on our data advisory board, we’ve been able analyze these transactions and determine how different factors affect our cardholders’ responses to deals and their buying behavior.
What our models indicate is that providing college students with strategically timed, targeted and valued economic benefits is the key to building loyal users and driving transaction lift. Saving money is the big motivator. On average students who received $31 in cumulative deal savings over the first four months of their participation in our loyalty card program have become once-a-week users. It’s not enough to send them offers, but you have to send them offers that they are likely to use in order to reap the benefits to your usage patterns.
Conversely, we have found that FlockTAG cardholders who receive no discounts or deal offers at all quickly lose interest in the platform and stop using our loyalty card. Our analysis has revealed that these no-deal users show a 50% decline in the number of FlockTAG transactions by the fourth month. The drop-off is due to a combination of factors. First, cardholders fail to use their FlockTAG cards every time they make purchases, so there is lower compliance. Second, they do not buy as much food or merchandise at participating restaurants and stores, so there is no transaction lift. As a result, merchants lose business and money.
Based on data analytics, we’ve concluded that offering good deals and rewards through our FlockTAG deal engine to cardholders within the first month after they join the loyalty card program ─ and then continuing to deliver incrementally larger money-saving incentives over subsequent months ─ will increase their FlockTAG transactions significantly. These consumers will remain actively engaged in our FlockTAG platform and be more likely to use our loyalty card on a regular basis. In comparing these deal-engine users with the no-deal users, we project they will make two and a half times more transactions by the fourth month. Our clients will see increased sales and return visits from these customers.
The bottom line is that everyone likes to save money. Our FlockTAG deal engine is designed to deliver savings, at the right time and in the right amount, to our cardholders and win their loyalty. This approach drives both compliance and transaction lift, which benefit our users, our clients and our business partners.