UK-based Raphaels Bank has signed on to deliver the first prepaid loyalty card program in the roadside recovery industry for the RAC, a British automobile association. Valentina Romeo talks with the bank and takes a closer look at the new card
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Already a big name in the UK prepaid industry, Raphaels Bank has partnered with Grass Roots, the customer engagement business, and launched The RAC Member Benefits card, a VISA prepaid card combining a loyalty card with a prepaid offering.
The card is offering customers the opportunity to save money at 60 shops and restaurants with up to 15% cashback. The RAC Member Benefits card is available to anyone purchasing breakdown cover or insurance including over 7m RAC members in the UK.
"RAC Member Benefits Card is a RAC branded pure card. Offered to RAC’s Breakdown and Insurance customers who pay on annual continuous payment method, they can earn up to £100 from RAC when they take out qualifying RAC products including breakdown, home, bike and motor insurance," Rob Champion, managing director of Grass Roots OneFee tells CI.
With the new card, £20 can be claimed for the first product purchased, £30 for the second and £50 for the third. The customer is sent a card with the reward amount loaded onto it and they then have the option to continue using the card by loading it themselves to earn the rewards.
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By GlobalDataChampion adds: "RAC’s objective was to engage with its customers to cross and up sell where possible and to be able to have a single view of customers purchasing multiple products."
Furthermore, the RAC membership card offers a package of benefits that extend beyond the RAC products and services to savings with well-known high street brands. "This is the first time for a road side recovery company to offer all these features in one card," says Emily Baum, business development manager Europe for Raphaels Bank Card Services.
Emily Baum, business development manager Europe for Raphaels Bank Card Services
The partnership brands currently include brands such as Asda, Marks & Spencer, House of Fraser, Debenhams, Homebase, Currys PC World, Goldsmiths, Strada, Zizzi, Café Rouge and Laithwaites Wine.
As Champion points out, traditionally this kind of market engages with its customers only when it is time to renew their policies. "The hope is that the customer will continue using the card, affirming their loyalty to RAC and thus driving retention," he says.
"This development with RAC really demonstrates how far and how quickly the prepaid card market is evolving. The fact that a major brand such as RAC chose to work with Raphaels Bank and Grass Roots to push the boundaries of the traditional prepaid offering really underlines the potential for other consumer brands and retailers of a similar stature to deliver customer benefits and generate enhanced loyalty through branded prepaid card propositions," Baum comments.
Champion adds that by implementing a cost per opportunity model, the group was also able to align the costs directly to sales which meant that the RAC knew ahead of time that they were always going to be within budget. RAC’s propositions manager, Hannah Darby, was happy that the business didn’t have to set aside a contingency budget in case of over redemption, Grass Roots also reports.
On the customer evaluation side, Raphaels Banks says the card was developed in response to detailed customer research on what RAC customers would value and enjoy in additional benefits as part of their membership of RAC.
Baum also explains: "The product was developed to reward the RAC’s loyal customers and we expect that once the customers start using the card and see the level of savings and benefits this product offers we are confident of a very positive response."
Prepaid cards play a major role in the incentive market. They give the customer choice whilst at the same time can be branded to affirm the customers loyalty to that brand.
"There are many players in the market, but Grass Roots believe their products stand out amongst the crowd as Grass Roots is an established company that has been in the incentive and reward market for some 34 years during which time they have built a wealth.
"There is massive untapped potential for prefunded loyalty cards in the UK. The key challenge is educating customers and generating greater awareness amongst consumers of the benefits," Baum adds.
"Companies providing the loyalty cards increase customer retention and revenue by encouraging designated spend. Customers benefit from being rewarded for spending with certain brands, and as such create a stronger connection to that brand."
Raphaels Bank currently holds £90m of pre-paid clients’ funds and operates more than 2,000,000 live cards, across 70 pre-paid programmes managed by 14 partners.
Looking ahead, Raphaels Bank has revealed it is working again with Grass Roots on a programme aimed at the student market and said it’ll be launching the new proposition in August 2014.
