Loyalty software programme provider Welcome Real-time works with banks generate revenue by providing incentives to retailers and consumers to increase traffic on POS and card payments. Now the 15-year-old company is preparing to diversify into new sectors. Maryrose Fison speaks to chief executive Philippe David.
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Since its beginnings in 1996 Welcome Real-time has undergone a trajectory nothing short of stellar.
Today, the company has offices in Paris and Aix en Provence, as well as bases in the US, Brazil and Singapore. 300,000 transactions go through the companys trademark software a day.
In May the company took on a new CEO, Philippe David, who has big ambitions.
Over the coming 12 months, he identifies three fundamental goals. The first target is to move the loyalty programme into a managed services arena where Welcome will be able to host and manage it for customers based on a subscription rather than a license.
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By GlobalDataHis second goal is to reach out to merchants directly with the companys software. He says Welcome is in the middle of developing a specific merchant loyalty solution for this purpose which may be ready by the end of this year.
The third target is to diversify Welcomes loyalty solution into the telecoms and insurance spaces sectors well-known for high levels of customer churn. He is confident that the loyalty software will help companies in those arenas reduce customer turnover.
When the Greek Telecommunications company WIND implemented Welcomes loyalty solution, David says the company saw a 13% reduction in churn within one year.
Standing out
In its first year as a company, Welcome Real-time had a negligible number of customers, but a dogged determination to lead the market. This ambition has been realised and today, customers include Barclays, Burger King and Shell.
But, while the company has enjoyed strong growth in the past 15 years, loyalty programme provision is becoming increasingly competitive, and Welcome has to work harder to maintain its edge.
For David this means differentiating between short-term and sustainable long-term gains, benefiting all sectors in the payment chain and making the solution accessible.
While some discount providers work on the basis of one-off promotions offered to large audiences, David says there is little incentive in this model for customers to make repeat visits.
With Welcomes loyalty programme, David says the benefits continue over the long-term for banks, retailers and the end consumer.
"The rewards are based on a longer-term relationship where parameters such as frequency of visits, amount spent and demographics come into play in determining the types of rewards that the customer can get," he explains.
"By providing discounts that apply when paying by card only, the customer is encouraged to use their payment card for that transaction. Every payment by card brings revenue to the bank in terms of interchange. This increases the banks issuing departments revenue.
"For a banks acquiring business, the more transactions made on the bank-owned POS terminals at the merchants store, the more revenue the bank gets. And, by providing their merchants with a loyalty programme that is embedded in their acquiring back-office system, these banks are ensuring that their POS terminals get the most transactions on their terminal."
As well as increasing electronic payment traffic, the company has also developed mechanisms to encourage consumers to spend more per visit to a retailer and a system to help support banks in holding onto existing merchants.
Freedom
In March 2010, Welcome partnered with Barclaycard to deliver a retail rewards scheme known as Barclaycard Freedom.
In the first year, David says this scheme delivered a 15% rise in linked sales from Barclaycard Freedom cardholders at Shell service stations.
"Such schemes aim to increase customer spend at participating retailers and therefore also increase payments on the card, enhancing customer loyalty and increasing profits for the card issuer," he says.
In addition, David says the upgraded software allows retailers to segment their customer base so as to maximise the effect of their promotions.
"If you take the example of a hairdresser, on a free afternoon, she could decide to send out a promotion via any channel mobile, email or social media- to a specific segment of customers," David says, using a hypothetical example.
"The hairdresser could decide to offer female customers, who are homemakers and aged between 25 and 35, a 30% discount on haircuts if they come to the salon between 3pm and 6pm. This sort of targeted promotion creates loyalty from the segment."
He says it is also possible to drill down further and analyse consumer behaviour patterns and use this knowledge to financially benefit bank, merchant and consumer.
"We can track a customers behaviour in terms of types of purchase food, petrol, retail or entertainment and then when it comes to rewards, we can give them a reward relevant to them based on those analytics," David adds.
As consumers appetite for loyalty programmes grows and banks increasingly recognise the financial benefits of rewarding and retaining customers, Welcome Real-times future, like those of its customers, looks set for sustainable long-term growth.
