Many retailers use private label credit cards to increase customer satisfaction and loyalty in addition to sales. They offer the card to their customers and usually the customer receives some kind of benefit tied to the store. There are many ways to increase the rate of acceptance including: making offers that consumers want to accept, realtime decisioning, and rewards programs.
Making attractive offers
The first step to increasing acceptance of private label cards is to be sure the offer is attractive to customers. If the offer includes a low limit, high fees, no rewards, and is hard to qualify for, consumers will have no incentive to apply. Retail branded cards, while they offer benefits tied to the stores where customers already shop, must be competitively priced with other credit cards in order to be attractive. Not only should the card terms be attractive, but they should be offered in an effective manner. This can be done by making offers directly tied to the relevance to of the offer to the consumer. Retailers should take into account what the customer would be most likely to accept at what terms. When a retailer takes this approach, the offers are more likely to be accepted.
By using realtime decisioning, customers know at the point of sale whether or not they were approved for the retail card. This is beneficial for a few reasons: The customer can use the card immediately and when instant decisioning is used in conjunction with a ‘new member’ offer, customers will often buy more goods because of the discounted price. Customers also experience higher satisfaction through instant decisioning. Rather than applying and waiting days or weeks to get a reply, they get a decision within a matter of minutes, or even seconds.
To effectively increase customer loyalty, many retailers offer something of value to customers who use their card. This includes: personal shopper programs, free shipping on online orders, special promotions, cash back on certain purchases, etc. These programs offer items and experiences that non-card carrying consumers cannot access, which adds value for loyal customers. By implementing an attractive rewards program, retailers are enticing consumers to use the card and become more loyal customers.
There are many ways that retailers can increase consumer loyalty and one of those ways is by offering a private label credit card. Especially when the card offers attractive rates, can be decisioned in realtime, and offers rewards, consumers are more likely to accept and use these cards.