Rewarding Card Spending with Stock Ownership Drives Greater Lifetime Value

Tue, 26 January 2021  |  credit stock ownership 

New research from Bumped, a fintech company with the goal to create an ownership economy through fractional stock rewards, released data from their two-year pilot study that shows the impact stock rewards for credit card spending can have on user behavior. The data indicates an owner drives 33% more lifetime value than a customer does.

The Bumped pilot ran for two years and rewarded over 13,000 US consumers in fractional stock rewards when they spent at more than 80 brands. Once rewarded in stock by a brand, the average Bumped user showed a 43 percent increase in monthly spending, with a 1.5x increase in monthly visits to brands that rewarded them in stock when they purchased. The average reward-spend-ROI across all 80 brands was 23x.

Customer Lifetime Value is nuanced and personalized to every brand, Bumped creates a Lifetime Value by looking at 2+ years of consumer transaction history, calculating a pre-stock reward value, and comparing it against the same calculation applied to post-stock reward behaviors.

The Gas and Wholesale categories saw some of the biggest lifetime value lift from rewarding customers in stock:

  • 'Gas' category rewarded users for shopping at Chevron, BP, ExxonMobil, or Shell— when users selected their favorite brand and were rewarded in stock, Bumped saw an average 111% increase in LTV across those brands.
  • 'Club Warehouse' gave users the choice between Costco, BJ'S Wholesale, and Sam's Club - the average LTV increase for those brands was 76%

The average US consumer is enrolled in 14 loyalty programs, but claims to only be active in half of them (Bond Loyalty). Those programs are composed of traditional rewards: points, coupons, or cash-back. These reward incentives may bring the customer in for an additional visit, but can create one-off moments or fleeting interactions, rather than supporting an engaging, lifelong relationship.

"When customers are rewarded with fractional shares of stock, they get something tangible and understandable," says David Nelsen, Bumped CEO & Founder. "The brands that stand behind their customers and give them the chance to participate in the market can make a material dent against competitors, in many instances the consumer will stop shopping with a competitor all together."

Source: Bumped

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