Why should media businesses embrace Payment Linked Loyalty & Rewards?
Introduction
The world of media has in the last few decades turned away from the print business and towards alternative forms of content creation. With content now being published across a diverse number of channels, customers are left with the power to choose which entertainment and news platforms they prefer. For media companies, that means they must find new ways of not only getting a customer’s attention but also retain them. Customer loyalty has become a new sort of battle that media companies need to engage in, to remain in business.?
While for media companies this is a new struggle, in Retail where competition for customer’s attention is higher, brand initiatives such as the Everyday Rewards by Woolworth, Coles Flybuys, or the Tesco Club Card, have been used to create a sort of connection between the brand and the customer’s loyalty to them. Media companies could benefit from following similar structures that allow for loyalty schemes to be used as a way of influencing customer’s decisions and retaining their favor. Creating a way in which loyalty is rewarded, can lead to a long-term sustainable relationship between media companies and their subscribers.?
For Media companies, engaging their user’s networks could be a useful way of enhancing user’s experience. By adding and layering a payment-linked reward, they could gain access to first-party data and potentially find new revenue streams, while at the same time retaining their user’s attention and subscriptions.?
A brief on first-party data, its value, compliance requirements, and third-party data?
In the world of media and marketers, data has become its own sort of currency, that can be used to gain insight into user’s wants and needs. This data can be acquired through multiple different avenues both online and offline. Different types of data can reap different benefits for each company, but first-party data has been commonly acknowledged for its value.?
So far, the most common way of acquiring third-party data was through third-party cookies, however, that type of data has now proven to be incredibly generic, and as such companies are finding it difficult to acquire it in a cookieless world. In contrast to this, first-party data is the data that a brand collects directly from its users, both online and offline. This could include information about the material consumers are checking on the website, product views, search queries, sales calls, and store visits.
More importantly, this sort of first-party data could also include information on purchase data, account information (in the case that a loyalty program is in place, or that a sign-up is required for access to the website), or information on the demographic that accesses the website or app. For marketers, this sort of information could influence the brand's targeting, optimize its campaigns, and alter the categories found on the website. Essentially, this sort of data can directly be used to better the customer's experience of the website and in this way, it can draw in more customers.?
Another benefit of using first-party data is that in most cases consent for acquiring this data can directly be given by the consumer upon the brand's request. With standards in privacy law constantly changing and the current General Data Protection Regulation (GDPR) in Europe and CDP in Australia, which requires brands to explicitly request consent to use a customer’s data, using a type of data, such as first-party data, that allows you to comply with all those regulations can be a huge benefit for your business and it can inspire your customer’s confidence in your business practices.?
Therefore, using first-party data can make it easier for brands to comply with privacy laws and regulations while inspiring the trust of their customers. With the personalized data that they are obtaining they can also personalize the user’s experience and as such retain the loyalty of their customers.?
?Challenges faced by media?
While Retailer groups have managed to find ways of accessing first-party data and obtaining valuable information that helps them create a better experience for their users through loyalty programs, Media companies seem to be lagging. This backwardness may be caused by certain challenges faced by Media companies.?
For Media businesses of any size, finding ways of diversifying and increasing their revenue stream would mean using their first-party data with efficiency. However, due to the multiple disconnected channels used in Media, Media corporations are often suffering from having disconnected data assets. This means that they are unable to use the data that they might be acquiring for the improvement of their service, which at this time remains the main source of revenue.?
To connect their data assets and channels, and to have a certain degree of data unifications media companies will need to find a way to create a true 360-degree customer view. This means finding a way to connect purchase transactions, customer profiles, content data, devices, and subscriptions. With so many people often using multiple different emails and cards when creating accounts, it can be a challenge for a company to unify all the different data under one single account.?
Finally, collecting data is not enough. Media companies will need to find a way to use all the data that they have acquired through their different platforms, to generate new revenue streams as well as to better the customer’s experience and inspire in that way their loyalty. While acquiring and storing data is one thing, finding a smart plan through which that data can be used can come with its own set of challenges.
?Payment Linked Rewards – Loyalty & Rewards
Imagine a scenario where you receive an instant reward on your recent airline ticket purchase that could be automatically converted into a currency which could then be used to pay for consuming online media content or burn at a coffee shop! How cool it could be?
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To create loyalty between a Media brand and its users it is important that the process used is not only convenient but that it works seamlessly every time. A great way of doing this would be to link loyalty to the user’s existing payment identifiers. Payment linked rewards can offer the brand the ability to have their users register their existing bank card on their media platform, this can then be used as an identifier for both online and in-store purchases outside of the media ecosystem.
For the customer, this could result in getting loyalty points or cashback, or even a media currency. Both can lead to customers choosing to use any or all their registered payment cards to benefit from the loyalty rewards.?In this way, the customer receives instant gratification from their loyalty rewarder, while the Media brand can gather more valuable data that can be used to amplify their revenue streams.?
Customer Data Platform (CDP) in Media
A customer data platform (CDP) is a collection of software that can be used for the creation of a unified customer database. This database can include data from numerous sources, and it can be accessible to other systems. Usually, there are three types of data categories stored.?
Smart usage of this data includes using three different types of orchestration
?Why should the media embrace payment-linked rewards?
This question forced me to take a closer look at 2 layers in the CDP 1. Data orchestration layer & 2. Channel activation layer. Currently, Media companies have two main issues that can both be tackled using payment-linked rewards. Firstly, with their current way of acquiring data, they are usually left in the dark regarding their subscribers' identity and their purchase behaviors. Secondly, to fix that problem they often rely on the subscriptions data(internal) or the aggregated data(external) they buy from data brokerage firms, this data is not always an accurate representation of their own subscribers’ purchasing patterns, preferences, or behaviors.
By using payment-linked rewards, media companies will now have a way of directly acquiring that first-party data and as such, they can utilize that information to create better user experiences through the high-quality real-time data that they are receiving. Moreover, they can create a 360-degree view of their subscribers as they are acquiring real-time information regarding their preferences and transaction patterns. This means that in the long run, they will have richer data profiles for each of their users. This can amplify their revenue streams as they can use the data acquired to create better digital advertising campaigns as well as to improve advertisement effectiveness in their platform.?
Media groups are strong in delivering content and winning reader’s loyalty and what they need are new revenue streams and novel experiences that they can offer their readers. Finally, a loyalty and rewards program anchored around their reader's existing payment identifiers can inspire customer’s confidence and it can help Media brands hold on to valuable users by creating a better, more personalized experience for them. With the information acquired, media companies can diversify and look at using multiple new revenue streams and even potentially introducing non-media products based on their used purchase patterns and behaviors.
How can Media groups implement payment-linked rewards?
For media agencies to use payment-linked rewards platforms they will need to comply with the compliance and security guidelines that those services require. For media agencies, the strategic association with a “Payment linked rewards as service (PlaaS) platform, would be the perfect way of acquiring all the valuable benefits examined above. This could benefit both businesses as media publishers have customer loyalty, while a payment-linked service can bring in data and information about their customer’s preferences and purchase history. In this way, by combining all this data they can create novel experiences for their users.?
In today’s market, there are a few companies that offer payment-linked offer platforms. Majority of the companies in this space operate as a publisher with a branded consumer app, partner with a data provider and then start aggregating merchant offers. But there are only a handful of companies that?control the entire value chain.?Personally, my pick in this space would be UK based fintech company Enigmatic Smile Ltd who seems to be making the early run to provide a comprehensive solution for the media companies.
?Conclusion
With the emergence of so many digital platforms, and with the world becoming ever more digitally focused, first-party data could provide valuable information and new revenue streams for the brands that utilize it. For media brands, this could mean reasserting their dominance and empowering their business to levels that they have not seen since the late ’90s. In fact, in collaboration with advertisers and marketers, they can create unique customer experiences that are directly influenced by customer behaviors and experiences. By creating loyalty, this collaboration between the brand and their consumer can continue to be ongoing and can generate new revenues for media companies.
The ideas, views, and opinions expressed in the above posts represent my own views and not those of any of my portfolio companies.