Determine a card user's wallet size, share of wallet and potential to spend
The Business Challenge
The client had three primary challenges for its payment cards. It wanted to:
- Ensure that its payment card stayed on top of its customers’ wallets by generating more frequent usage
- Leverage the power of its transaction data to decode the behavior and personalize use strategies
- Develop a highly predictive, robust and scalable approach that could be replicated across multiple markets in Europe, Asia, South America, and with expansion to other geographic areas.
Secondary challenges included:
- Improve revenue
- Enhancing the customer experience
- Optimizing cost effectiveness
Fractal developed complex, multi-level methodology of a payment card user’s potential using the “Top of Wallet Index” to spend by:
- Determining how to generate usage-based card clusters with one methodology.
- Estimating the size of each customer’s wallet by a distribution and stability analysis methodology.
- Analyzing the size and share of wallet with a cluster-wide distribution of cards methodology.
- And profiling card clusters for both size and share of wallet with a nearest neighbor methodology.
Fractal Analytics identified $102 million in incremental spend opportunity and protected $167 million POS spend attrition in the first year through a set of six customer engagement themes (15 actions) customized for its portfolio.
Fractal’s integrated segmentation framework based on a “Top of Wallet Index” can be used for driving revenue increases, marketing cost efficiencies, and reducing credit risk across the bank.
- Fractal identified 5+ lifecycle actions with a potential to deliver more than $500 million in annual spend across three geographies to create a consistent, multi-market ready, re-deployable “Top of Wallet” framework.
- This highly integrated “Top of Wallet” solution enables a high acceptability and usage for a unifying strategy.
- The solution demonstrated the power of transactional data to create longer-lasting value, a campaign evaluation framework, a spend attrition matrix, and a dynamic campaign tool to capture behavior at category and channel levels to enable hyper-targed campaigns.
- Fractal utilized a solution that blended art and science based on the philosophy of “What you buy defines who you are” vs. “Who you are defines what you buy”.
- The solution used millions of spend data attributes across the banking industry to create a 360-degree view of the most relevant factors that define a customer.