How Finance Brands Can Leverage Discretionary Activity Data

By Carolyn Corda, CMO at data consortium ADARA

Financial institutions have long used data to target customers with marketing messages. Credit card businesses, for example, have utilised spending data to identify customers most likely to be interested in a certain type of credit card.

However, while they used to lead the way when it came to customer targeting, they are now lagging behind other sectors due to innovations in data tracking, collection and analytics. Brands in every sector are now able to segment and target potential customers with relevant and personalised marketing messages, and they’re leaving these former financial trailblazers behind. In fact, a study found that 94% of banking firms can’t deliver on personalisation.

Personalisation is key to the success of any marketing campaign from a financial institution. Delivering the right message at the right time drives results and drives customer loyalty, proving the value of the brand to their lives on an ongoing basis. According to research, 72% of customers will only engage with marketing messages that are personalised and tailored to their interests.

If financial institutions want to reach and connect with customers, the key is to be able to deploy data-driven strategies which leverage more than just a few data points to build a profile of an individual. For example, banks may be able to leverage internal data to find customers that are more likely to be interested in a certain account type. However, they can’t identify this with a huge amount of certainty, or understand the specific needs and desires of an individual. This is also not useful in attracting new customers. Only by understanding customer buying preferences can financial brands personalise marketing messages and even services more effectively, securing high-value future customers with compelling marketing offers.

Discretionary activity data encompassing both intent and spend is a key tool which can give true insight into an individual. Teasing out intent behaviour from actual spend differentiates between aspiration and actual commitment. For example, a consumer might search for expensive, gourmet restaurants or front-row seats at a blockbuster concert, but when it comes down to the purchase they may opt for activities more in line with their budget. Getting a clearer view of the combinations of behaviour is also valuable. By knowing that customer X buys multiple train tickets and goes to fine dining restaurants away from their hometown, a marketer might get a different understanding than if they combine that with knowing the person is attending concerts as the primary driver for these trips.

Discretionary activity spend can therefore unlock the most crucial customer insights, and whether VIP pre-sale access to tickets might make a more relevant offering to a person than offers on rail fares. The hotels we choose and the attractions we go to paint a picture of an individual, and it is this individual profile that finance marketers need to unlock in order to truly serve existing customers and – crucially – attract new ones with compelling offers. For example, for a bank deciding between a promotional APR, or the option to join an experience-based rewards programme or one with discount offers from relevant retailers, a person who shopped high-end, but ended up opting for a more modest transaction would be a wise target for the discount option. Someone who  buys the high-end activities they shop for would benefit more from the experience-based rewards programme. In what is a sticky market for attracting new consumers, personalised experience offers can help a finance brand get a new customer over the line.

This extends to understanding the best targets for an air-miles based credit card, or to realising those high-value customers who may be looking for a more effective account type based on their circumstances and interests, for example. A person who books a family room will be interested in different financial offers and promotions to solo travellers. Families may be more interested in redeeming air miles in exchange for a family holiday or a group ticket to a theme park ride, while solo or business travellers might respond to no foreign exchange fees, free car rental insurance or airport lounge access. The case for knowing your customer goes on and on – and it is only through leveraging verified customer identities, built from ethically sourced data points across a spectrum of discretionary spend that this can be truly maximised. At ADARA, we build individual, verified profiles using ethically sourced data from 270+ brands, enabling us to effectively predict and understand customer behaviour more effectively than a single-dimension data set.

Financial institutions must draw on customer discretionary data in order to develop more customer-centric and personalised marketing strategies that put the individual customer at the centre of the operation. Only then will they be able to truly understand what a given customer wants and needs; boosting both customer service and marketing effectiveness.