The loyalty offering from Barclaycard has got off to a
good start, helping drive a 7.4% increase in the share of spending
at Shell’s petrol stations on Barclaycard credit cards. Will Cain
was in Megèves, France, as part of a Welcome Real-time customer
summit, and spoke to Barclaycard managing director Sarah
Newman.

 

Chart showing BARCLAYCARD FREEDOM. performance – initial results for Shell’s share of Barclaycard credit card spendingThe Welcome
Real-time summit in Megèves, France, this year shone a light on
some of the experiences of its clients. The most notable of them
was Barclaycard, who gave some telling insights into the early
indications of its recently launched Freedom loyalty programme,
offered on its credit card portfolio.

Sarah Newman, managing director of
Barclaycard Freedom, said the rewards scheme, which only went live
two months ago, had been launched to over 8m card holders and
27,000 retail outlets.

She gave two performance
indicators, highlighting the early successes of the campaign. The
first was that the rewards programme had driven a 7.4% increase in
Shell’s share of Barclaycard spend, after seasonal variations had
been taken into account. Freedom users earn 0.5p per pound spent in
Shell’s petrol stations.

The second example was an
individual customer who had racked up £881 ($1,300) of rewards in
May through the purchase of a watch from a jeweller that was
offering a 10% rewards incentive. The reward scheme operates on a
cash rather than points basis for greater transparency, because
Newman said consumers were confused about points-based systems.

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“It is about deepening
relationships,” Newman told Cards International.

 

Deepening
relationships

“Everything we are doing is about
that. The two months have had high and low points, but we have had
some fantastic feedback from market place.”

One of the most impressive aspects
of Freedom has been the breadth of retailers it has engaged. Newman
admitted it has been more of a challenge working with smaller
retailers because Barclaycard does not have a direct relationship
with them.

The rewards scheme was an opt-out
project for Barclaycard’s retailers. Newman said a number of
communications had been sent out to retailers explaining the scheme
and giving them the opportunity to not participate.

“We started communicating with
small merchants in January, trying to shake the tree and get the
uninterested retailers out early in January, February and March and
we saw a drop off each time we communicated. Since launch we have
seen fewer withdrawals because they have seen the marketing and
also experienced the benefits.”

Newman said she had expected a
large withdrawal from the programme when retailers started to see
charges on their banking statements, and employed extra call centre
staff to handle the complaints. The response from retailers was not
as bad as had been feared however, and Barclaycard has also made an
offer to retailers that they can opt out after three months of the
scheme and get their money back.

“We have covered the spectrum from
big retail players to small and this gives the biggest scope for
earning of any programme in the UK,” she said.

“We have delivered through our
acquiring mechanism to switch on the merchants to this. Redeem as
you pay, it is easy to redeem and not only can you earn you can see
dynamically offers and see money as you transact. No vouchers or
coupons, it is all there at the point of sale.

 

Three key
benefits

The opportunity for retailer
involvement in the programme comes down to three key benefits,
according to Newman.

  • Value: One of the
    key benefits retailers see from loyalty is insight. Retailers have
    a lot of information about customers within their stores, but one
    of the main benefits of the Freedom programme is that they can also
    get intelligence into what customers are doing outside their store.
    Newman gave an example of what was possible under the new scheme.
    “Shell, for example, can send offers to Barclaycard holders who are
    shopping for petrol at supermarkets,” she said. “We have to do it
    [the offers] for them, as otherwise it would not pass data
    protection, but they can target these people who, for example, live
    within five miles of a petrol station.” She added that Barclaycard
    could also access debit information where customers had both debit
    and credit accounts with the bank, which she described as “a big
    value hook”
  • Scale: Retailers
    benefit from being part of a large coalition loyalty scheme.
  • Ease: Newman said
    ease of use was driven through the use of Welcome Real-time
    technology which allows for rewards redemptions and offers at the
    point of sale. One of the most important elements here is the
    amount of time it takes customers to transact when using the
    rewards platform.

“We have studied queue times and it
does have an impact on queues at the point of sale at the early
stages as customers get used to the programme,” Newman said.

“But in time we are seeing that
improve and that is important to retailer. They do not want to
increase queue length or transaction times. We are now getting more
traction across retailers as we show them the benefits and examples
that it isn’t adding to queue times, for example.

“That gives confidence to retailers, who do not want to make
decisions based on dreams and concepts.”