Extending CRM Features to Private-Label Credit Cards

Loyalty Lab and HSBC are partnering to expand capabilities for card-based loyalty programs.

CRM software maker Loyalty Lab and credit card company HSBC Card Services are partnering to offer the capabilities of Loyalty Lab's rewards engine to HSBC clients. The companies announced the alliance April 7.

"We have been working together to offer direct customer interaction for the typical point-based or rebate-based loyalty product," said Michael Greenberg, president of Loyalty Lab.

Greenberg said Loyalty Lab provides technical capabilities such as a rewards platform, point accrual, issuing rebates and promotional offers, e-mail messaging, and data extraction and analysis.

"The key element is that we have built our product to be line item-oriented, down to the individual SKU," he said. "Most of the credit card world thinks at the transaction level. We support purchases and returns at the line item level."

As a result, Greenberg said, Loyalty Lab can help retailers understand what consumers purchase with private-label or co-branded credit cards. He said the company has built a set of applications that allow rules-based promotions that can be set to accelerate earnings at certain times, such as by offering double loyalty points on certain days of the week.

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Because Loyalty Lab bases its technology on an SAAS (software as a service) architecture, Greenberg said HSBC's clients will have the flexibility to adapt loyalty programs without rebuilding any applications.

"Business rules are provided through configurations or client-facing applications," he said. "Marketers have more direct control over the rules and messaging built around loyalty programs. A lot of what we do is about data integration and normalization."

By expanding the marketing features of their private-label and co-branded credit cards, Greenberg said retailers can go beyond the limits of the traditional points-based loyalty program.

"You can turn it into an engagement program with customer messaging and interacting," he said. "You can create relevant communications that take you on the pathway beyond loyalty to true CRM [customer relationship management]."

Scott Loftesness, an analyst with payments research firm Glenbrook Partners, said as one of the three major players in the U.S. private-label credit card market-along with General Electric's GE Money and Citigroup's Citibank-it's logical for HSBC to want to add loyalty capabilities to its offering. He said the alliance should also provide a competitive advantage to Loyalty Lab.

"There is a tendency in the mind-set of a retailer who has done a private-label credit card deal to look to their partner to handle other aspects of the program," Loftesness said. "This would give Loyalty Lab a leg up in that situation."

Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com's Retail Site.