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Data-driven loyalty: three strategies that work for brands
Mastercard Data & Services empowers restaurants and retailers to make smarter decisions and deliver personalized consumer experiences through integrated solutions
Explore three data-driven strategies to take your customer loyalty to the next level
Personalize
Engage
Measure
Personalize communications by customer segments
Engage customers with loyalty programs and campaigns
Measure and optimize marketing and loyalty initiatives
Go over each action for details and click to navigate.
Restaurants and retailers believe in the value of personalization
of global companies shared that they either believe in the value personalization, understand its benefits to the larger business strategy or have made it core to their CX operations
93
%
1
1. The State of Personalization Maturity – Q4 2021, Dynamic Yield.
However, many brands are still falling short of consumer expectations
of consumers want promotions tailored to their needs
80
of consumers are not fully satisfied with the level of personalization they see from companies
2
1. The Age of Personalization, A Mastercard-Sponsored Report by Harvard Business Review Analytic Services. 2. Bond, “The Loyalty Report ’19: The New Story of Loyalty”, 2019.
78
Improve your personalization efforts with four key strategies
Leverage personalization tactics across a variety of channels, including emails, websites and apps
Personalize promotions, campaigns, product offerings and recommendations based on customer segments
Enrich personalization capabilities by combining first-party data on consumers’ purchasing habits with external third-party data
Test and refine experiences and content to optimize journeys and measure the incremental revenue impact of investments
Explore how brands have partnered with Mastercard to personalize their communications by customer segments
Grocery chain in North America
Restaurant chain in North America
Apparel retailer in North America
An apparel retailer used Test & Learn® to improve their direct mail offers.
An apparel retailer with over 400 stores had identified a standard offer it believed to be most profitable based on learnings from prior direct mail offers. The retailer wanted to optimize their offer distribution but lacked a robust way to personalize the offers to individual customers. Leveraging Test & Learn®, the retailer was able to design and test alternatives to their standard offer. Test & Learn® helped the retailer identify the optimal offer for each customer by building several predictive models that incorporated potentially influential customer attributes. Test & Learn® identified that 60% of mailed customers would respond better to an alternative offer. By targeting and tailoring offers by customer, the retailer was able to drive $7.1MM in annual incremental profit.
A grocer used Test & Learn® to target a loyalty points promotion to high-value customers.
A large US grocery chain wanted to determine the optimal strategy for one of their promotions and how the impact of the promotion would vary by customer segment. The promotion provided customers with double loyalty points for specific beverage purchases. The grocer used Test & Learn® to analyze the promotion. The analysis found that the promotion was more profitable for customers who historically spent less per transaction, customers with higher past coupon redemption frequency and customers who purchased the promoted product less frequently. Test & Learn® combined these performance drivers into a model, which revealed that targeting the top 58% of customers can capture 100% of the overall benefit of the promotion.
A restaurant chain used Test & Learn® to personalize their email promotions.
A large restaurant chain wanted to enhance their email promotions by analyzing various parameters such as the promoted item, discount amount and duration. The restaurant used Test & Learn® to personalize the promotions for a segment of their customer base. The analysis revealed that shorter promotions with larger discounts were most effective and that customers with the highest visit frequency in the last year responded best to the promotion. The restaurant chain used these insights to develop several two-week long promotions with optimal menu items and discount amounts. By targeting select customers with these personalized promotions, the restaurant chain was able to drive $6.5MM in annual incremental profit.
Retailer in Europe
A European retailer used Test & Learn® to enhance their Personalized Card-Linked Offers.
A European retailer had been using Mastercard’s Personalized Card-Linked Offers (PCLO) to build brand preference and improve the customer experience by enabling simple, card-linked offers. The retailer wanted to understand the incremental value of these offers and how to target future offers more effectively. The retailer used Test & Learn® to analyze the personalized offers. The analysis showed that the offers drove a 7% lift in incremental spend and that the campaign was more successful with engaged customers who spent more with the retailer in the past two months. By using these insights, the retailer was able to drive a 100% increase in incremental spend by targeting the personalized offers to the more engaged customer segment.
Restaurants and retailers recognize the importance of building strong relationships that extend far beyond the transaction
70
of consumers buy from businesses that put customers first with great experiences
1. Become 2021 Global Innovation Reports.
Despite efforts to improve loyalty programs with frequent refreshes, many brands struggle to win customers’ loyalty
1. Beyond Rewards, A Mastercard-Sponsored Report by Harvard Business Review Analytic Services.
58
of brands do not believe their loyalty strategy is effective
55
of brands have refreshed their loyalty program in the past two years
Evolve from static, generic marketing toward an agile approach that drives customer engagement
Limited personalization, legacy tactics
Historical loyalty
Next-gen loyalty
Mass marketing based on scheduled campaign calendar
List-based, periodic segmentation
Reliance on siloed, static and duplicative consumer data
Reactive
Personalized rewards, experiences, and gamification
One-to-one content triggered by consumer behavior and need
Real-time, automated segmentation
Single view of the consumer, dynamically updated based on actions
Predictive
Discover how brands have partnered with Mastercard to deliver engaging loyalty programs and campaigns
Specialty retailer in North America
QSR in North America
Department store in Southeast Asia
Online retailer in Europe
A retailer increased customer engagement by using SessionM to launch a loyalty program.
A specialty retailer with over 50 store locations across North America wanted to enhance their retention strategies and grow new revenues. However, the retailer lacked the capabilities to deliver the personalized, omnichannel experiences consumers favor. SessionM enabled the retailer to build an engaging loyalty program and deliver personalized customer experiences. By using SessionM, the retailer was able to target specific segments of loyalty members with relevant offers, campaigns and messaging while also providing a seamless customer experience by integrating the website, app and in-store POS systems. By using SessionM, the retailer was able to launch a loyalty program that drove engagement and increased spend. The program generated over $700MM from member purchases in last 12 months, with 81% of members transacting in that timeframe.
A leading quick service restaurant leveraged SessionM to engage customers.
A leading quick service restaurant wanted to develop a new rewards program with more relevant experiences to engage customers and motivate incremental spend. However, the restaurant was unable to deliver behaviorally triggered campaigns and promotions because transactional data was only acquired when customers purchased online. The restaurant used SessionM to design, deliver and execute their new rewards program. SessionM captured transactional and behavioral data for each member to fuel relevant interactions at each step along the customer journey. Points for each dollar spent served as the basis of the program and a key tactic for incentivizing customer behavior. Within a year of program launch, the restaurant was able to enroll 8.5 million members. The program boosted member engagement by delivering a variety of promotions including point multiplier promotions, activation campaigns and fixed bonus points promotions.
A department store worked with Mastercard to engage a new customer segment.
A leading department store in Southeast Asia experienced declining sales during Covid-19 lockdowns. Due to a decrease in travel, the store decided to focus on driving engagement and spend from customer segments who shopped overseas prior to the pandemic. The department store leveraged Mastercard’s data to develop key shopper insights. These insights revealed that 21% of the overall overseas customer base was luxury shoppers, yet this customer segment contributed 75% to the total annual shopping spend. Mastercard recommended several opportunities to boost engagement such as providing these shoppers with customized promotions. The department store turned these insights into an actionable campaign and piloted the new initiative with Test & Learn®. Test & Learn® did not measure an overall increase in incremental spend from the campaign but was still able to identify pockets of success with key customer segments. Moving forward, Mastercard recommended engaging the priority segments with niche campaigns rather than mass media campaigns that market to a wider audience.
An online retailer used Test & Learn® to understand customer engagement on their new app.
A leading European online retailer wanted to understand how their new app affected customer engagement and spend patterns to inform future campaigns and app investments. However, the retailer faced significant challenges in analyzing the incremental impact of the new app due to bias between customers who downloaded the app and those who didn’t. Using patented algorithms to address bias between test and control, Test and Learn® found that, on average, customers increased spend by 31% following app installation. By diving deeper into the results, Test & Learn® found that installing the app enhanced customer engagement, with a 120.7% increase in total page views per customer and higher transaction frequency. Test & Learn® automatically scanned hundreds of attributes to identify which customers are most likely to respond best to future app acquisition campaigns. By targeting the top 25% of these customer, the retailer can boost customer engagement and drive over $700K in annual incremental revenue.
Most restaurants and retailers are looking for ways to optimize their loyalty initiatives
72
of executives say optimizing customer loyalty is a top-five priority of senior management at their organization
However, many restaurants and retailers face several key challenges, including:
Improve the loyalty point redemption experience for cardholders using frictionless payment options
Support emerging payment technologies such as biometrics, contactless and QR codes
Enable cardholders to split the cost of their purchases over time with buy now, pay later offerings
3
targeting or segmenting their audience
57
optimizing next-best action decisions
1. Forrester Report, 2021. 2. Ad Measurement and Revenue Attribution 2021.
36
measuring the impact of their digital spend
Use business experimentation to optimize new initiatives by answering key questions
What is the overall incremental impact of the loyalty program or campaign?
Which aspects of the loyalty program or campaign work best?
Which types of customers or markets changed their behavior due to the loyalty program?
How can we target rollout of the loyalty program or campaign to maximize profitability?
4
Learn how brands have partnered with Mastercard to measure and optimize their loyalty and marking initiatives
Retailer in the United Kingdom
Convenience retailer in North America
Restaurant chain in South America
A leading UK retailer used Test & Learn® to measure the impact of paid search marketing.
A leading UK retailer was investing heavily in paid search marketing but was unsure if the investment was driving incremental sales. The retailer conducted an internal analysis using a randomized control group but was skeptical of their results. The retailer decided to use Test & Learn® to evaluate the marketing investment. The software delivered statistically accurate results by using patented algorithms to identify the optimal test and control group mapping of postal codes. Test & Learn® measured a 4.1% increase in incremental sales for stores within the postal codes showing the paid search ads. By further analyzing the campaign results, Test & Learn® helped the retailer identify customer segments and product categories that responded best to the ads. Overall, the paid search campaign resulted in 207% ROI and was proven to be a stronger driver of incremental sales compared to other marketing channels.
A convenience retailer used Test & Learn® to evaluate their SessionM loyalty program.
A convenience retailer used SessionM to power their opt-in loyalty program, combining sound above the line design (points, tiers, rewards) with compelling below the line tactics and tools. However, the retailer struggled to measure the loyalty program’s true performance due to their weak control matching capabilities. By using the first-party data collected on the SessionM platform, the retailer was able to set up an analysis with Test & Learn®. Patented test and control algorithms were leveraged to reduce test and control bias from 22% to less than 6%. This synthetic control selection enabled the retailer to accurately read the incremental performance of the loyalty program. Test & Learn® showed that the loyalty program was driving an 8.8% statistically significant lift in incremental sales. To further enhance their SessionM powered loyalty program, the retailer is now using Test & Learn® to optimize outreach tactics through targeting promotions to high-potential customer segments.
A leading restaurant chain used Test & Learn® to measure the impact of their loyalty program.
A US quick service restaurant (QSR) wanted to evolve their long-standing loyalty program by analyzing the impact of new customer enrollment. However, without any control customers or pre-period data for comparison, the restaurant was unable to evaluate the incremental impact of a customer joining the loyalty program. The restaurant leveraged Mastercard anonymized and aggregated transaction data and Test & Learn® to measure the incremental impact following a customer’s enrollment in the loyalty program vs. an optimized and tailored control group of unenrolled customers. This analysis revealed an immediate and sustained $2.82 increase in sales per customer per week as a result of a customer joining the loyalty program. After taking into account the cost for loyalty program rewards, Mastercard quantified a 12x ROI for loyalty program customers. Mastercard helped the restaurant digest key learnings from the analysis and develop strategies to further optimize their loyalty program.
A restaurant enhanced the ROI of their billboard marketing campaign by using Test & Learn®.
A national restaurant chain in Brazil invested R$3MM in a billboard marketing campaign across eight markets. The restaurant wanted to understand how the investment impacted food sales for restaurant locations near the billboards. The restaurant used Test & Learn® to measure the impact of the investment on food sales. This analysis found a 0.9% lift in sales for restaurant locations near the billboards. A deeper dive into the results revealed that the billboards were most effective when placed within 0.33kms of restaurants located in more populated areas such as São Paulo. By using Test & Learn® to target the billboard investments more strategically, the restaurant chain was able to increase ROI from 65% to 177%.
How Mastercard can help you build stronger, more profitable customer relationships
Unrivalled analytics and insights
Powered over 3.7 million analyses with Test & Learn®; 95% of engagements saw at least 2X ROI
Filed over 600 patents on topics including biometrics, card-linked offers and test vs. control analytics
Generates insights from 100 billion aggregated transactions across 3.0 billion global cards
Loyalty expertise
Supports over 800 custom loyalty programs and has over 1.2 trillion points under management
Offers over 100 solutions and benefits, impacting 600+ million cards
Curates over 2,000 Priceless experiences and hundreds of offers and benefits
Extensive network
$6.5 trillion Gross Dollar Volume
Ecosystem of 60+ million merchants and 22,000+ issuers
Over 3,000 customers in 120+ countries
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