Interchange Fee Limits Give Way to Transaction Marketing
More broadly, transaction marketing through banks enables precise measurement of what offers were activated, as well as the specific number of resulting redemptions. A 100 percent accurate and attributable return on investment.
In terms of response rates, transaction marketing offers typically experience activation rates that average 15 percent to 20 percent, with some campaigns experiencing as high as 40 percent. On average, a third of consumers who activate an offer actually follow through and make a purchase. These results are significantly higher than other channels due to the advanced targeting capability of transaction marketing and the presentation of offers in consumers’ bank accounts — a trusted channel they often visit to manage their money and determine future purchases. Retailers only pay when a consumer actually makes a purchase. There are no up-front costs and, therefore, no risks.
Although traditional bank rewards programs will certainly be impacted as a result of interchange limits imposed by recent legislation, new, innovative, alternative solutions such as Cardlytics’ transaction marketing will enable retailers to better reach the right customers with highly visible, highly relevant rewards.
Scott Grimes is CEO of Cardlytics, a company that unites banks and merchants to provide rich rewards to consumers based on their individual purchase behavior.