Magazine article Marketing

Opinion: Marketing Society - Chip and PIN Can Build Loyalty

Magazine article Marketing

Opinion: Marketing Society - Chip and PIN Can Build Loyalty

Article excerpt

Some marketers believe chip and PIN technology has little to do with relationship marketing. They are either blinded by its anti-fraud properties or believe that chip and PIN cards are no different from stored value cards (SVCs).

Some claim the technology heralds a move away from relationship marketing because the customer can actively choose to interact less with a brand.

But they're missing the point: Chip and PIN actually adds another dimension to the loyalty conundrum.

The key word is 'chip'. Never before have customers carried their own database of brands in their wallet. This is much more valuable than an SVC, which feeds into a main database held at a distance from the customer.

Chip and PIN technology allows us to look at data on an individual basis.

The next step is where it starts to get really exciting for relationship marketing. Say you have a woman who is an avid user of hair-care products.

Every time she swipes her card, you have an opportunity to talk to her in a way that suits her. When she's at the till, you can tell her via the PIN screen that there's a two-for-one offer on her favourite conditioner next week.

Our experience across 65 loyalty programmes in 25 countries shows the UK lags behind the US in technology exploitation. In the US, department store Saks Fifth Avenue piloted its WOW programme in 2002 in Houston and New Orleans. It set out to explore the benefits to the bottom line of rewarding regular customers with gifts at the till, such as chocolates or perfume. …

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