Creating Next-Gen customer loyalty in Financial Services and Travel Loyalty

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A discussion with Valuedynamx on the trends that will influence future opportunities

Creating an innovative Customer-Centric strategy in mature industries

Surveying the global customer loyalty landscape, the financial services and travel loyalty sectors are the two highest ranking in terms of program maturity. The entire customer loyalty industry has its origins in frequent flyer programs, and financial services loyalty marketing rose quickly thereafter on the shoulders of co-brand reward credit cards.

Being first is notable, but with longevity comes a heightened need for innovation, and both of these sectors are showing their age. What will it take to build the next generation of customer loyalty strategies and programs in financial services and travel loyalty? There are plenty of opportunities available and we talked with executives at Valuedynamx to get answers to our questions. If you don’t know, Valuedynamx is part of the Collinson group of companies and is a leading global provider of payment linked rewards working with clients globally including IAG Loyalty, Emirates and Virgin Atlantic.

The financial services sector has seen instances of data-driven marketing programs stretching beyond the payment card product area, with a select few loyalty programs that reward members for adoption and use of products throughout the bank (we call them “Whole Bank” programs) having remarkable success. Others are building customer relationships through educational, content-driven programs that are positioned to help customers reach their financial goals. Some are creating partnerships with key third parties (mostly in QSR and Retail) to add value beyond credit card spend.

One big opportunity in financial services marketing is to incorporate Artificial Intelligence (AI) into customer marketing and to do so at an accelerated pace. Almost everyone understands the importance and power of AI in marketing strategy and are placing it squarely as a pillar of their digital transformation progression. For example, recent studies reveal that 57% of financial services companies view digital transformation as their primary strategic focus, with 71% acknowledging the significant impact of AI on their operations.

Revolutionizing customer loyalty programs in the financial service sector using Artificial Intelligence is a central focus at Valuedynamx. According to James Berry, Managing Director Valuedynamx, it is the combination of data, AI, and Machine Learning (ML) that can help financial services companies break through current stagnation. Combining these elements into a smart strategy and by leveraging the data earned using digital rewards, brands can create and prioritize offers based on the spending habits and financial circumstances of customers and deliver the kind of value that can enhance customer loyalty.

The Power of Artificial Intelligence in Financial Services Loyalty

The power of AI can redefine the way banks, credit card issuers, credit unions and others collect and manage customer data, for better understanding of customer preferences and to foster customer engagement and build trusted relationships. But while there is general agreement on the “potential” for AI, it’s the “how” of AI that still frustrates many executives. The ability of an AI driven platform to coalesce data from different streams and apply predictive insights on the collective results can lead to a much more sophisticated offer development and delivery. It might be that AI is the way that we finally achieve the power of personalization in marketing.

James commented “The data that financial institutions have, if harnessed in the right way, can really help us predict which incentives and which offers are going to be most relevant to which customers and where it is best to engage them with those offers and incentives … at Valuedynamx, we focus on harnessing data from past purchase behavior and reward redemptions, not in an invasive way, but in a way that predicts which offers are going to be most appealing to customers and which will deliver better value for the customers’ everyday engagement and improve loyalty through accurate personalization and enhanced customer experiences. .”

AI can also contribute greatly to optimizing marketing spend while driving return on marketing investment (ROMI). When properly implemented, AI supports the development of long-term customer relationships. For example, as consumers make specific purchases, marketers can use that information to target their campaigns at the right time (e.g., Easter, Summer, or Back-to-school) and be sure to include the right types of promotions for everyone.

How Customer Loyalty is evolving in Financial Services and Travel Loyalty

We asked James to share examples of the work he has done with Valuedynamx in the financial services and travel sectors. For many years, Valuedynamx has been a trusted ally for brands seeking to differentiate themselves through loyalty programs and their solutions enable banks, credit card issuers and travel providers to build long term customer loyalty.

In the travel industry, Valuedynamx empowers airlines, hotels, and travel agencies to reward frequent travelers, enhancing the overall travel experience. Based on this experience, James was able to share important insights.

James shared how IAG Loyalty partnered with Valuedynamx to rapidly expand the British Airways card linked offers proposition through its stellar merchant relationships. As it operates today, the British Airways in-store shopping proposition rewards customers for everyday offline purchases. By simply linking their AMEX, Visa or Mastercard credit or debit card, British Airways Executive Club (BAEC) Members can accumulate Avios for purchases – big or small – at participating merchants, to save for a flight, upgrade, or other reward.

Results came from a combination of technical ingenuity and operational excellence and thanks to Valuedynamx’ involvement, the proposition grew from 10 merchants to 100 in just 15 months. By streamlining the user experience and onboarding high street brands (a mix of independent and global companies including Hamleys, L’Occitane en Provence, The Ivy Group, Harvey Nichols, and Liberty London) the program enticed hundreds of thousands more payment cards to be registered, with numbers doubling year on year into 2024. 

Another example is the work completed with Emirates, where a new Pay with Points/Miles feature was added to fulfil the growing demand among Emirates Skywards members with new redemption options. This redemption offering provides a convenient way for Emirates Skywards members to spend their Miles in smaller increments on a daily basis. Emirates Skywards members can earn and spend Miles on travel with Emirates and flydubai, partner airlines and travel and lifestyle partners worldwide. In addition, they can now spend their Miles in real-time for digital gift cards at more than 500 brands across 5 markets globally, including the United Arab Emirates, United Kingdom, United States, Australia, and India.

2024 Loyalty Trends for Financial Services and Travel Loyalty

To understand where Customer Loyalty will develop further in the Financial Services and Travel Loyalty sectors, we connected with Colin Evans, the founder of Collinson, Valuedynamx, and the globally recognized Priority Pass. Colin launched one of the first loyalty rewards programs in the Middle East over 25 years ago and has witnessed massive change in the business over that time.

Colin noted three trends that marketers should give attention to this year:

  • The need to enhance security of customer data and program operations and how both those tasks can be accomplished through integration of blockchain technology and AI.
  • The increasing influence of gamification strategies to drive engagement and novel approaches to this familiar concept that will fulfill the potential for gamification in customer loyalty.
  • The importance of sustainability and social responsibility for today’s consumers and how to build those considerations into loyalty programs.

Colin commented “We stay abreast of key trends to evolve strategic planning at Valuedynamx and to be poised to deliver next-gen approaches for our clients. For example, our focus on sustainability and social responsibility resonates with consumers who prioritize ethical and purpose-driven brands. Our pursuit of innovation and commitment to customer-centricity are driving forces in the evolution of loyalty programs, positioning the company as a transformative force in the market.”

Where the future will lead

Colin noted that “Brands in the financial services and travel loyalty sectors – as well as retail and others – are making board-level commitments to create solutions leading to better understanding of customer needs and preferences. This is needed to create the next generation of customer loyalty.”

He continued in saying that “Valuedynamx believes genuine loyalty transcends mere transactions and is about nurturing authentic connections and delivering exceptional value. Through our own focus on customer-centricity, we believe we have the right approach to lead the reshaping of the loyalty program landscape on a global scale.”

Editor’s note:

Valuedynamx, operating as part of the Collinson Group, is a global leader in providing curated, data-driven omnichannel purchase rewards to enhance customer engagement and support. Through personalized incentives, targeted promotions, and seamless experiences, Valuedynamx empowers brands to foster deeper connections with their customers. Leveraging advanced analytics and AI-driven insights, Valuedynamx enables brands to understand their customers; preferences and behaviors, crafting tailored solutions that drive loyalty and advocacy.

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