Customer Data: Use It or Lose Them

This has certainly been the year for big data hype. With the volumes of data banks have about their customers the biggest challenge seems to be discovering the most efficient way to boil it down and make it useful. Finding the right data may seem like finding a needle in a haystack, but here’s a case for using a bank’s internal data that doesn’t seem that difficult and would radically improve customer retention and loyalty.

I recently cancelled an airline rewards card that I held for a decade because the benefits changed so significantly that the annual fee no longer made it worthwhile. I hadn’t used the card in about a year but held onto it so I could cash in the miles before closing my account and paying the pesky fee again. When I called to cancel, the customer service representative asked me why and then stated it appeared I wasn’t using the card anymore. When I explained that the annual fee was no longer worth the rewards the card offered, there was no attempt to get me to stay or make me another offer. They simply closed my account. I was a good customer and heavy user of the card and from my perspective they just gave up on me.

Another rewards card that I hadn’t used for quite some time sent me a “thinking of you” card that same week. It was a clever invitation from the President of the company expressing that they hadn’t seen me in awhile, that I was missed and presented me with a VIP pass for discounts in-store or online. The card also included the President’s personal email requesting that if they had failed to meet my expectations in any way he would like feedback directly about how they could improve.

That is a sharp contrast in methodologies. Both card issuers faced the same problem—that I hadn’t been using my card. Both issuers clearly had that utilization data at their disposal. However, the ways that they utilized that data (or not) to address the situation were very different. I definitely would have entertained another offer from the airline card I cancelled. It was my go-to card because the rewards were matched well with my personal lifestyle. The more points I could earn the better, until they changed the program. The card that sent me the incentive to come back and visit their store isn’t a priority and honestly I could take it or leave it. But which card do I still hold?

I’ve written in the past about building customer loyalty beyond rewards. Banks and retailers must work together to understand what their customers value and what drives them to be loyal to a brand. That includes looking at the data they have to make informed decisions about each customer. An analysis of my account with the co-brand airline card would have uncovered a dramatic change in my use of the card, as well as the airline. Proactive steps could be taken at that point to find out why and provide an incentive (as the retail store did) or offer a card that better suited my needs.

Understanding there are complexities involved with co-brand cards, there has to be a better way to ensure the priorities of the card issuer and retailer are being met without sacrificing customer relationships. Even if a rewards program needs to be adjusted, both parties should have a vested interest in retaining current customers and increasing their utilization. A special invitation from the office of President Jack was all it took for me to break out that card and visit the store again. I’m certain their data revealed I was a sucker for a discount.