By Jason Fuentes, VP of Business Development, Wildfire Systems
Legacy financial industry revenue sources face contraction due to factors such as looming regulatory pressures, modifications to interchange fee models, and the rise of alternative payments. As a result, banks and credit card issuers are looking to alternative loyalty solutions – new revenue streams for the FI that can also drive increased user engagement and add more value for their customers.
For example, financial industry titans including Capital One, PayPal, and Chase, extensively promote their merchant-funded cashback rewards loyalty programs that deliver rewards on their customers’ ecommerce purchases.
A common format for deploying programs that offer rewards to consumers for online shopping is through a free bank-branded browser extension. These browser extensions automatically display available cashback rewards and discounts at participating online merchants during the customer’s organic shopping journey, making it easy and convenient for the user to benefit from while providing a gratifying in-the-moment branding opportunity for the bank.
In this type of loyalty program, the bank receives a sales commission from the merchant when a customer uses the bank’s rewards program to make an online purchase. These commissions come from online retailers’ affiliate marketing budgets, in which third party publishers drive customers to the retailer in exchange for commissions on resulting sales. These commissions drive incremental revenue for the banks, which can be used to fund the cashback rewards for its customers.
One recent trend that has taken off with major banks, such as Chase and Capital One, is delivering offers to bank customers through the bank’s website or app as an “offer wall.” An offer wall may also be referred to as a rewards directory, shopping tab, perks portal, etc., but these terms all refer to the same thing – a centralized, shoppable interface within a customer’s online account experience that displays various discounts, cashback offers, and deals from a wide range of merchants.
To earn the displayed cashback reward, the customer simply clicks on the merchant’s offer wall “tile” to be redirected to the merchant’s online store. Once the purchase is completed, the customer earns their reward.
Compared to browser extensions, which alert on specific behaviors or retailers as the customer shops around online, offer walls engage the customer who doesn’t have a specific retailer in mind, and who may be more interested in browsing amongst a category of related retailers who offer items that the shopper intends to purchase. Using search or filtering, customers can find the merchant who may be offering the best deal or highest reward, and, in some cases, merchants not found as part of browser extensions. In essence, offer walls are complementary to browser extensions and a familiar source of rewards for consumers.
Offer Walls are more than a revenue driver
Beyond browser extensions, offer walls provide another popular outlet to display and promote merchants where customers can earn online shopping rewards through native shopping experiences hosted within the FI’s app or website.
The are three key benefits for financial institutions:
1) Enhanced customer loyalty and retention
An offer wall is more than just a list of logos — it’s an extra benefit for bank customers and a way to build deeper connections with them. With an offer wall, banks can provide a centralized repository where customers can discover and browse a curated list of offers as part of the foundational user experience.
By being integrated into the native banking experience, FIs can encourage customers to interact with a rewards program more frequently, translating into higher customer satisfaction and loyalty, and signaling that they are gaining more value from their relationship with a bank.
2) Increased customer engagement
An offer wall can also be a powerful tool to increase customer engagement, allowing customers to discover deals exclusive to their FI or that they might not encounter through a browser extension: as noted, some merchants, particularly those in the Travel vertical, don’t participate in browser extensions that promote cashback rewards. For those types of merchants, an offer wall provides an alternate way to showcase offers from those brands, affording customers booking travel the opportunity to further benefit from the bank’s cashback rewards program.
Personalization is also critically important to delivering an engaging experience. We recommend banks tailor each customers’ offer wall experience to display merchants that align with a customer’s preferences. As much as their privacy policy and data usage allowances permit, banks should be able to leverage transactional data (such as purchase history) to best maximize relevancy of the offer wall experience. For example, customers who often shop for pet supplies may see offers from Chewy, PetSmart.com, Petco.com and other pet-related retailers featured first in their offer wall experience.
3) Incremental Revenue
Incorporating an offer wall into a bank’s cashback program opens up new revenue opportunities. As we’ve mentioned, whenever a customer clicks on an offer wall tile or link and completes a purchase, the bank earns a commission.
Customers purchasing through the offer wall may also generate a higher average order value and resulting commission to your rewards program – especially since the travel category, limited as part of a browser extension, is a high-order-value transaction that can be redeemed as part of an offer wall. By including an offer wall as part of a holistic cashback rewards program, banks can deliver cashback offers from those “non-extension” merchants, users earn greater commissions in the process, directly resulting in more incremental revenue for the bank.
In fact, among our clients who have launched offer walls, Wildfire regularly sees a significantly higher average order value (AOV) on purchases from offer walls, than in their browser extensions.
Don’t just build it – promote it
To maximize customer engagement and revenue, a marketing plan is essential – merely having an offers page isn’t sufficient. Customers don’t “stumble on” an offer wall. Rather, banks must develop and execute on a strategic marketing plan to drive customer awareness – and in turn, usage – of an offer wall. Promotions might include an “always-on” marketing tile strategically placed on the customer’s account dashboard and weekly emails highlighting new and relevant merchant offers. Banks can also increase visibility of offers by announcing the availability of seasonal offers around peak shopping periods when consumers are looking for ways to save money.
Banks should consider adding an offer wall to their cashback rewards program for a strategic value-add that can deliver even more money-saving benefits for customers, while also providing the critical benefit of additional incremental revenue.
About the author
As VP of Business Development, Jason Fuentes builds strategic revenue-enhancing partnerships between Wildfire and financial institutions and fintechs, helping them incorporate value-adding customer loyalty features powered by Wildfire’s white-label cashback platform. With deep experience building productive partnerships at fintech startups as well as ecommerce and media companies, Jason brings a unique blend of expertise across sales, partnerships, marketing, operations, and product management in multiple industries that help him facilitate the delivery of positive results for Wildfire partners and stay on top of payment and fintech industry trends.
