Responding to the Open Banking data threat
If confirmation was needed of the growing importance of customer loyalty to financial services firms, then it is the announcement that Mastercard has bought SessionM or an undisclosed amount.
SessionM is a customer engagement and loyalty platform that runs the loyalty programmes for a range of the world’s retailers, airlines, restaurants and CPG (FMCG) businesses.Coca-Cola, Kimberly Clarke and L’Oréal are among its clients.
Mastercard says it has made the transaction “to help brands around the world deliver personalized, real-time offers and comprehensive campaign measurement based on robust, data-driven insights.”
“Consumers’ expectations about their experiences with brands are changing,” said Francis Hondal, president, loyalty and engagement at Mastercard. “We believe that the future of loyalty needs to be re-imagined to enable seamless digital experiences, and SessionM’s consumer-centric capabilities will help us broaden our value to marketers across sectors in exciting new ways.”
“SessionM shares Mastercard’s commitment to creating experiences that drive lasting loyalty and meaningful, impactful customer engagement,” said Lars Albright, co-founder and CEO of SessionM. “We look forward to joining the Mastercard family and to bringing our innovative technology to even more customers in more places around the globe.”
Traditional financial services firms know that the new Open Banking rules open their data treasure chests up to new players who, with the permission of consumers, can check entire spend and send offers appropriate to customer behaviour. By buying SessionM, Mastercard is better placed to offer these same services to its members. This is important, because under the Open banking rules, the position of Mastercard, Visa and American Express, as the sole holder of the data coffers is now under serious threat.
Investments & acquisitions
Mastercard points to the number of investments it has made over the past decade to advance its data-driven services for retailers and other brands. This includes the acquisition of Applied Predictive Technologies, a test and learn analytics tool that allows brands to prove the real impact of marketing, product and other decisions. Mastercard has also expanded its market-leading consulting program and enhanced its marketing services, executing omnichannel campaigns on behalf of customers.
“With our suite of data-driven services, we aim to help our customers end to end – from advice to execution and everything in between,” said Kevin Stanton, chief services officer, Mastercard. “Our complementary technology and teams will help brands drive greater loyalty with both proprietary and card-based programs—reinforcing Mastercard as their partner of choice.”
Only last week, Mastercard released research it commissioned from Harvard Business Review, which surveyed over 400 marketing execs. It found that 58% think their brand’s approach to customer loyalty is ineffective and the tried and tested model of simply offering points in exchange for spend was losing its appeal.
The transaction is anticipated to close in the fourth quarter. According to reports, Session M has raised over US$97m in funding since it was launched in 2011.