The number and usage of payment cards in the UK is on the rise. As of January 2019, the total number of credit and debit cards in circulation totalled around 160m, with Brits making 1.6b debit and credit card transactions and 337m credit card transactions in January 2019. In comparison with January 2018, transaction volumes have gone up by 7.3% and 13.5% for credit and debit cards respectively. As card usage becomes ever more prevalent, reaching out to customers via account-linked offers has proven an effective marketing tool for retailers, if they can participate.
The ability to attract and engage with bank customers via rewards and offers has long been used by major brands and retailers. Funnelled through by marketing companies who hold direct relationships with the banks, the channel is unique in that it enables merchants to market to large numbers of customers based on transaction history, providing the ability to target new, lapsed or loyal customers; all without lengthy POS integration.
However, while the channel is vast, targeted and effective, local merchants have not been able to access it, as technological as well as commercial aspects have made it difficult for marketeers to accommodate smaller or medium-sized operators.
Enter Tail. The outfit around an ex-Morgan Stanley banker and a group of Fintech entrepreneurs has made it their mission to open this channel to local and hyper-local operators as well. Enabled by the European PSD2 legislation, which now requires banks to open up access to consenting bank customers, Tail has created a solution that enables smaller merchants to access the channel as well via an online portal.
“We looked at this channel and were surprised to find it was only available to a certain tier of merchants," says Philipp Keller, co-founder and CEO of Tail. "Given its effectiveness, we wanted to give this tool to smaller and medium-sized operators as well, so we developed a solution which enables easy access for every merchant, irrespective of size.”
The company’s platform revolves around a self-serve online portal enabling merchants to sign up, determine the type of customer they want to engage with and the type of offer they want to run, with campaign uptake being displayed back to them in real-time.
Despite the novelty of the channel, Tail has already signed up more than 300 venues nationwide, and merchants are seeing the benefits. “I think you can call us early adopters," says Brittney Bean, co-founder of London restaurant chain Mother Clucker. "Having worked in the tech industry, I was familiar with the bank marketing channel and its potential, it simply wasn't available to us as a smaller operator. Now, we're making full use of it; we're running offers to new customers, to re-engage absent ones, or to fill off-peak times.”
Others are attracted by the ease of use: “We are continuously getting approached by a lot of different marketing companies, what drew me to Tail was how easy it is to set up and run," says Stephanie Flanagan, responsible for marketing at Humble Grape. "As a multi-site operator, I simply don’t have the time to continuously train my staff on coupons, apps or promotion codes all the time. The fact that Tail works in the background without all these was a major deciding factor for me. Now, I'm able to run, change and end campaigns at a moment's notice, all from my online portal."
"Tail have approached us in 2018 and I really liked the idea of card-linked offers, particularly in light of all the new challenger banks coming up," adds Robert Robinson, co-founder of coffee chain Notes Coffee. "We've been using them ever since and have been seeing a constant flow of new customers."
The solution is arriving at a timely moment: “We are seeing a lot of interest from financial institutions and card issuers in adding more offers of independent merchants to their rewards portfolios," says Keller. "As it offers them the possibility to engage with their customers on a more local level."
To find out more about Tail, click here.