Background
As one of Kard’s first customers, this issuer has been an early adopter of rewards, seeing it as not only a loyalty play but also a customer acquisition and brand awareness strategy, enabling them to empower more potential customers to reach their financial goals.
But there is always room for improvement. Over the past year, the issuer and Kard worked together to brainstorm new ways to level up its loyalty program.
Goals
More specifically, the bank and Kard set out to:
Add more offers
When the bank went live with its rewards program, only a select few merchant offers were available — and not all of them catered to the bank’s demographic.
With Kard, they hoped to launch more offers with some of the largest wireless carrier, transportation, meal subscription, and streaming brands. By appealing to their audience’s preferences, the issuer could encourage purchases that customers really needed and wanted. And the more cardholders were rewarded for those purchases, the more the bank’s card would be the one they reached for.
Spur revenue growth
For this issuer, a rewards program wasn’t just a way to build loyalty and increase cardholder lifetime value (LTV) — it was also a potential revenue stream. By adding more offers and motivating customers to take advantage of them, the bank aimed to boost its commissions and turn the rewards program into a revenue generator.
Results
Since the issuer’s program went live years ago, Kard had made significant updates to its API. So their engineering team first had to make some modifications to their app to support new local and targeted offers as well as other critical features like incrementality testing.
After cutting over to new endpoints, Kard’s account management team and the bank worked together to plan and integrate new offers and lay the groundwork for a revenue share program they intended to launch a couple of quarters down the road.
When the new and local offers went live, the issuer saw a:
19x increase in match rate
Match rate is an indicator of whether cardholders are engaging with offers — the higher the match rate, the more transactions were associated with a reward.
Before the bank’s new offers were launched, a small percentage of the bank’s transactions were tied to a reward. But eight months after launching local and targeted offers, its match rate had grown 19x.
71% increase in average customer value
The goal of any bank is to sign on customers who will actually transact — and continue transacting over time. Rewards are a way to encourage that behavior, giving cardholders a reason to use their cards.
Cardholders who earn rewards make a whopping 47% more transactions per month with this issuer’s card compared to those who have not earned a reward.
This increase becomes even more impressive when you take into account that rewarded users spent more with each transaction. Users who earned rewards had a 12.5% higher average order value than users who did not earn a reward.
Overall, users who earned rewards became 71% more valuable than those who did not. Put another way, the bank’s cardholders will spend, on average, 71% more money per month than cardholders who don’t earn rewards. Ultimately, this pattern results in more interchange revenue flowing through the issuer’s pocket.
20x revenue growth
Done right, rewards programs aren’t just a new customer acquisition and retention channel — they’re a new, sustainable source of revenue. By focusing on the user experience, the bank 20x’d its revenue.
This increase benefited cardholders, too. User commissions increased by 1,500%.
Pushing the envelope
To continue pushing for the best possible user experience, the issuer is working with Kard’s team to start a revenue share program. Customers will soon get 50% higher cash back in their first month of activating their card, driving them to explore offers and leading to higher engagement in the bank’s app.
But they’re not stopping there. The bank is also:
- Adopting the latest and greatest Kard features as they roll out
- Marketing their offers to their end users in the app and via email
- Enhancing their rewards UI/UX
And all of these adjustments are helping them build the most compelling and sophisticated campaigns for their unique audience, solidifying its status as a top challenger bank.
