First Dates, Sans Coupons

Jason Blackhurst wants every BankAmeriDeals experience to feel as good as a first date. That's the premise behind one of Bank of America's (BofA) latest offerings to its customers, says Blackhurst, the bank's SVP and e-commerce product executive. BankAmeriDeals uses data in bank customers' accounts to find out what they buy, then partners with merchants to offer them deals on products and services—much like loyalty programs, but directly linked to their bank debit cards. During the past two years, BofA has served 1.5 billion offers to its 30 million online and 14 million mobile banking customers. Blackhurst believes the Charlotte, N.C.-based bank has seen enhanced retention and engagement because BankAmeriDeals has helped customers save more than $20 million dollars since the program began in 2012. Indeed, BofA's retained 30 million online banking customers since January 2012, and the number of mobile bankers increased by 4 million since May 2012. "We actually believe one of the compelling points of BankAmeriDeals is what we call the 'first date' phenomenon, which we talk about publicly, is that nobody knows you're using a BankAmeriDeal," Blackhurst says. "When you use it at a restaurant or you use it at a store, the only person who knows you used that offer is really you and Bank of America in data that we get from the transaction. The merchant doesn't know you, as an individual, used that offer." Therefore, he explains, unlike Groupon or social media marketing deals, which require the user to show a piece of paper or smartphone screen with the coupon so it can be scanned, nobody can tell the customer is using a BankAmeriDeal. And, "on your first date, you probably don't want to be ripping out coupons, because it might be your last date." How They Met"The idea came up, really, in 2009," Blackhurst says. "We understood that the customer was going to be engaged in a different way in the future—i.e., where 'payments' is going and how mobile was going to change the paradigm of it." At the time, group deal sites were all the rage. While popular, those discount programs were going to age badly, he knew. "We thought it was the wrong model," Blackhurst says, "because it was obtrusive, not a real targeted-type event, and we were already seeing [that], just in our own personal lives, … Groupon rapidly became just another version of spam for most of us. And so what we knew at that point was, if we wanted to engage our customers, we needed to build something that was specific to our customers and not just sending out non-stop pedicure, manicure-type things to people like me, who've never in their lives been to a pedicure or a manicure establishment. So it became really, really important to us that getting relevant offers to the right people for the things they want to go shopping and buy was the real driver for us." At the same time, Blackhurst says customers were telling BofA "loud and clear" that they wanted to save on everyday expenses. The bank, of course, had information on what those everyday expenses were, in the form of transactions. Plus, the "2013 Maritz Loyalty Report" shows consumers are more apt to trust and be satisfied with personalized offers from their financial institutions (bit.ly/1cneHjy). "One of the important things for us in the program is we never want to violate that trust," Blackhurst says. "We want to make sure our customers' data stays housed within our four walls." Cardlytics, the Atlanta-based company BofA partnered with to create BankAmeriDeals, prides itself on keeping bank customers' personally identifiable information housed within the financial institutions. Yet the vendor can "link" offers of up to 15 percent "cash back" with participating merchants within BofA's online and mobile banking customers' accounts. So if, for instance, customers buy iced mocha lattes each morning at Starbucks, they may see BankAmeriDeals offers for cash back if they buy from Starbucks. Companies like Starbucks, classified as "advertisers" by Cardlytics, sign up to offer such deals to all of Cardlytics' clients—nearly 400 financial institutions—in order to reach scale. Then the banks decide how to customize the offers to their customers, says Kasey Byrne, Cardlytics' SVP of marketing. Then customers decide what they want to redeem. Blackhurst says Bank of America believes in this "open offers" network because "it's better for everybody involved if consumers can take advantage of these offers through their financial institutions or however they want to interact with them, and it's not in the best interest of the consumers or the merchants if we restrict that." Although Blackhurst declines to reveal BofA's redemption rates among its online and mobile banking customers, all of whom are on an opt-out basis with BankAmeriDeals, Byrne offered overall results for Cardlytics financial clients: "Our activation rate and the redemption rates at the customer level are both double-digit percentages—which compares pretty favorably with banner ads." BofA marketers thought they had found a keeper, so they took it home to meet the employees for a test with them during the 3Q 2011. Testing the RelationshipBlackhurst says BofA worked the kinks out by testing BankAmeriDeals with its employees. That's when the bank discovered it needed to offer customers more. "One of our learnings that we got was having just national brands—it didn't make it personal enough," Blackhurst says. "It wasn't getting the kind of relevance we were looking for. And we really started focusing on that—on the local, regional stuff. So multi-location vendors, but still smaller, if you will, in those areas. And that's how we drove it to try to get the relevance to the right level for the consumer." Starbucks, meet In-N-Out Burger. "From there," Blackhurst says, "we spent basically all of 2012 going through a region-by-region launch for our customer base." Finding the WordsBefore BankAmeriDeals could present bank customers with bargains, there had to be enough content to offer them. "We pretty much approached every merchant in the beginning," Blackhurst says. "What we did is we looked at what was relevant spend by region." National brands were grouped in the "universal" spend categories and, as Bank of America learned, regional brands had to come in for the offers to feel more personalized. Byrne says adding in regional options was a smart choice. "What Bank of America believes, and what we have found to be true also, is that the right consumer experience includes a lot of national brands, but it almost demands local, or at least regional, pieces in it to feel like it's day-to-day relevant." In other words, New Yorkers may need to see Duane Reade discounts for their drug store needs, while Ohioans planning on grocery shopping may seek cash back for purchases at Kroger. Byrne says restaurant and gas station spends also tend to skew local. "Bank of America really helped uncover that," Byrne says. Even though the test went well, Blackhurst says Bank of America spent time rolling out BankAmeriDeals region-by-region throughout all of 2012. The bank used the extra time to ensure BankAmeriDeals got it right. "Because of content, we actually were very specific around region," Blackhurst says. "So we wanted connecting states. Because when we were landing content in those regions, we basically focused on, 'Let's go get content in the Southeast.' And, once we got content in the Southeast, we would launch into the Southeast. And then our teams focused on getting content in the Northeast, because we were going to launch there next. So we had a strategy that was driven by content and, in fact, to this day, content is very, very important to the channel. And we spend a lot of time, money and effort making sure we get the right content into the channel." Blackhurst says the content Internet and mobile banking customers generally see from BankAmeriDeals is display advertising. "What we tried to focus on is making sure … we weren't interrupting what they wanted to do via online banking and mobile banking," Blackhurst says. "But, at the same time, we were making them aware of an opportunity to save money on their daily spend." Chances are, BankAmeriDeals users were aware of the 1.5 billion offers served since 2012. But they got to express their preferences about how to see them. "We didn't do a lot of text messaging," he says, "because we obviously see that channel as a very, very special channel for our customers. And we try not to jam that up unless they want us to communicate in a certain way to them. So what we did do is a lot of splash-on-sign-in when [customers] came to online banking, to basically inform them of that. "We did do some advertising out in public, where we did some ads that basically showed how people could use it and save money," Blackhurst continues. "And then, obviously, we continued to leverage all of our digital spaces with some banners and stuff like that, when people are on our site and also out in the wild, telling them about offers they get. … Once somebody's opted into 'alerts,' as we call it, for BankAmeriDeals, they can get texts. We do send text messages about, 'A deal has been redeemed,' 'A new deal has arrived for you,' [and] 'A deal is about to expire.' And they get all of those and they interact with them accordingly." Engagement Equals Loyalty"We never saw this as a loyalty program for Bank of America," Blackhurst says. "We saw this as an engagement program to help deepen our relationship with our customers." BankAmeriDeals is, however, serving a larger online and mobile banking membership than it was when it started. "It is a win-win for customers, merchants and the bank," Blackhurst says. "Saving money makes our customers happy, and that helps attract and retain customers." Happily Ever AfterBlackhurst may want customers to be able to use BankAmeriDeals on first dates, but he plans to stand by this "card-linked" marketing for the long-term. "We see it as a program that's still growing," Blackhurst says. "It's still in its infancy. We want to be stewards of this network. We believe that it's better for this to be an open-offers network. And, in fact, we do not source offers solely for Bank of America customers. We source offers for the network and allow that to go, because we think … that's what's required to be good stewards and to allow this thing to mature and grow into what we think can be a very meaningful … form of advertising … for the merchants that is net-new. … There's always another opportunity out there that we're looking to do. So I think we've still got a lot of work in front of us to continue to add content to the system and drive that relevancy even higher for our customer base." Speaking of merchants, by the way, Blackhurst says BankAmeriDeals users generated more than $200 million worth of spend for them during the past couple years. "We knew what we were trying to do is build what we call a 'win-win-win' business model," Blackhurst says. "Typically, in the business models, yeah, you're looking for 'Who's the person losing out here?' And, really, what we thought we had was something that was really good for the merchant, really good for the customer and also really good for us, because it allowed us to engage all of our customers." Obviously, merchants are also BankAmeriDeals customers. "We really wanted to, and we still do want to, be seen as helping the merchants get more business through their front door, getting the right customers, having a better value of advertising, and, at the same time, we want consumers to not be spammed," Blackhurst continues. "We want them to get offers that are relevant to their everyday spending and engage that. And it allowed us to really connect the entire organization of Bank of America together—our wholesale commercial bank and our retail consumer bank together. And, as our CEO says, 'We're better more connected.' This is a living example of how that connection drives a better value for the entire ecosystem." Returning to the concept of keeping customer data private, Blackhurst says Bank of America provides advertisers with aggregated information. "When we first started talking to merchants, they were like, 'Great. Send me the data, and we'll go target it,'" Blackhurst says. "And we're like, 'Yeah. That's not what we're going to do.' ... What we did do was turn that concept on its ear and say, 'You tell us what you want us to target, and we'll go target that for you. Then we'll come back and give you the reporting that doesn't expose any individuals, but shows you where it's been successful. ... What happened [during] the 90 days before you ran the campaign, what happened during the campaign, and then what happened after the campaign.' " That worked, and because of that, BankAmeriDeals will soon have more Bank of America connections to coincide with its new slogan, "Life's better when we're connected." "We would consolidate other opportunities on our existing digital sites," Blackhurst says. "BankAmeriDeals is going to become the one site where people can actually go and take advantage of those offers. We have some other areas you can go to now. We're working on a consolidation plan." First date? Engagement? More like "fix a date." BankAmeriDeals seems to be planning to make its relationship with customers permanent.

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First Dates, Sans Coupons

Heather Fletcher

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Heather Fletcher