Sconti
BancoPosta, the loyalty programme launched by Banca Posta less than
12 months ago, has already been acclaimed by analysts and industry
observers as among the most successful retail banking launches of
the year.
Banco Posta, the financial
services arm of the Italian Post Office, rolled out the Sconti
loyalty programme last September.
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The brief: to increase card
usage and boost BancoPosta’s cards ‘front of wallet’ market share.
The bank was also keen to boost its already dominant prepaid card
market share (currently around 60% in Italy), through co-branding
agreements.
As a lever to encourage a
change in customer behaviour, the Sconti programme offers cashback
on purchases made with its cards at partner stories, credited
either to the customer’s current account or prepaid
card.
At the heart of the programme
is a desire to improve the customer experience by providing
personalised benefits to clients, drive loyalty and boost the
BancoPosta brand.
The merchant
network already totals 20,000, scattered all over Italy, with all
main merchant categories included in the programme.
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By GlobalDataBancaPosta is also
benefitting from a major boost to its marketing intelligence, with
profiling and customer spending behaviour analysis a welcome boost
to its CRM capability.
Luca Leoni, the head of
market intelligence at BancoPosta – his responsibilities include
marketing planning, market and competitive analysis, communication
support and loyalty, as well as customer analysis and remote
banking – told RBI that the Sconti programme has already
exceeded the bank’s initial targets.
“I am really proud of how the
initiative has gone so far. We started to brainstorm in April 2009
about a new loyalty programme. The first decision was cashback or
points. After only one month and taking into account the data from
a customer survey, we decided to go for cashback.
“There are many programmes in
the market which focus on points; few focus on cashback funded by
merchants. So this was an ambitious programme.
“We had to achieve scale
rapidly, engage our customers and incorporate merchants. So far, we
have 14m customers signed up.”
In February 2010, Leoni
kicked off a pilot programme focused on one credit card product,
involving only 10,000 customers. A hard launch followed in October,
taking in 6.3m debit card customers, and this July the programme
extended to the bank’s 7.4m prepaid card customer base.
The pilot programme involved
5,000 small family merchants. Leoni says that the initiative is
required to reach 30,000 merchants to achieve optimum
scale.
By the end of
this year, he expects the merchant total to pass 25,000 with the
30,000 target to be achieved by the middle of 2012.
“I believe we have engaged
around one million of our 6.3m debit card customers in the
programme already. By this time next year, I want to see this
number double to around two million,” Leoni said.
A side benefit of the
programme is that BancaPosta is delivering value to partner
merchants by way of additional revenue and increased
footfall.
“The merchants are happy.
They can see their revenues increasing and have not observed
changes in the payment method, such as cash to card,” he
added.
“But now we must deliver CRM
knowledge to the merchants. We are gathering a huge amount of data
about customer behaviour which will be a treasure mine for the bank
and for the merchant.”
BancaPosta’s partnership with
MasterCard includes access to the card issuers CRM database while
the bank also benefits from niche marketing analysis from CRM
vendor ValueLab.
“Our battle, our war, is to
be top of the wallet. So many customers will have say five or 10
cards in their wallet. We believe that a significant discount is a
good push for our card to be taken out first, ahead of say a card
from Intesa or UniCredit.
“This is the right way to win
the battle. Our goal is the same goal as the merchant so we are
going in the same direction. This project does not really help
cross-sell. It is a war on cash strategy, perhaps the only part of
the programme we do not share with the merchant.”
But Leoni conceded that
cross-sell benefits may accrue in due course. The bank has around
16m postal savings customers but only 6.5m current account
customers.
“So there is a great
opportunity to target the 10m customers who hold a savings but not
a current account. The loyalty programme may help attract them. In
the prepaid sector, we are the market leader with our market share
of 60% in Italy,” he said.
“The loyalty programme will
be a great boost to maintain our market leading position. The
prepaid sector is becoming more competitive with new entrants –
non-banking players for example coming into the market – so the
loyalty programme will help us to consolidate our
position.”
Leoni continues to monitor
card revenue and market share on a monthly basis and says that
debit card total transactions increased by 20% in the first six
months after the hard launch.
“The 20% figure is ahead of
our initial forecast and target. We planned to grow more gradually.
In the second month after the launch, last November, we witnessed a
huge increase in debit card transactions. This was unusual as the
usual months for debit card spend to peak are July and
December.”
The launch was backed up with
an integrated marketing campaign, incorporating direct mail, radio
advertisements, petrol station discounts in April, online marketing
and social media activity on Facebook.
Looking ahead,
Leoni is excited about the prospect of tapping into the bank’s
partnership with Vodafone, to build on a reseller agreement signed
with the firm in 2007.
“We have a great opportunity
to test reaction to a possible bundling discount deal on mobile
traffic. We are also looking at the scope offered by mobile
couponing, mobile alerts and discounts.
“Group buying is something that allows you to buy online
at a very low cost an online voucher, which can then be used
offline. As a start, we launched in July a website for our prepaid
customers, called postpay deals. It is just a pilot project at the
moment but I believe that we can take on firms such as Groupon.
This is a marketing phenomenon in which we want to
participate.”
