Hats off to Bank of America for creativity and quick side-stepping after their costly and very public foible earlier this year. How does a banking behemoth like BofA turn a quarter dominated by a genuine public relations fiasco (remember their $5 monthly debit card disaster?) into proverbial chicken salad?
As badly as that episode went for them on one end of the customer experience spectrum, they seem to be innovating some very interesting and potentially rewarding programs which, in the end, could genuinely enhance or create much needed customer bonds.
Rolled out in test mode in late January, Bank of America’s new BankAmeriDeals is taking the popular daily deals models (Groupon / LivingSocial) and overlaying their customer’s purchase history data to produce a hybridized deals platform that could potentially one-up the more established deal providers..
Groupon and their counterparts bulk-aggregate retail deals and bulk-disseminate them to their subscribers. In contrast, BofA is able to deliver relevant discounts & promotions based on cardholder past purchasing behaviors and extrapolated preferences. Theoretically, this should lead to stronger brand relationships for BofA and its promotional partners, as well as generate incremental transactions and revenues..
The program is currently being tested through BofA’s own employees in Nevada and the Carolinas and is expected to be rolled out company-wide soon. The timing for customer roll-out has yet to be announced, but early word is that all account holders will be auto-enrolled when the program launches.
According to a report in Time/Moneyland, here’s how the program works:
“Based on a BofA cardholder’s shopping history, the customer will be offered discounts off future purchases from stores where he or she regularly shops, or perhaps is likely to shop. For example, say you buy your kid back-to-school clothes at a major discount chain. When you check your BofA account activity online, you may see that store is offering you a 10% discount on your next purchase. You select that deal, then when you make your next purchase with a Bank of America card, you’ll pay full price and BofA will issue you a statement credit for the amount of the discount at the end of the month. No coupons, promotional codes, or e-mail registrations are necessary.”
For loyalty practitioners this presents some interesting food for thought. Will this program and others like it (note: Bank of America is not the only bank deploying this kind of a program right now but they seem to be the only ones to do it on this scale) open the doors to broader use of purchase preference overlays?
Tesco, the U.K. based grocer, has been utilizing similar purchase-profiling overlays for their 16 million program members since 1995 and claims to have a 25% bump as a result.
Now that’s food for thought.