PLCC and loyalty programs go hand in hand, but many retailers offer private label credit cards on their own without any type of loyalty program.
While these cards can help with customer retention and lifetime value for a brand, they aren’t that effective at promoting engagement with your customers by themselves.
But, when a PLCC is part of a brand’s overarching loyalty strategy, customer engagement metrics would flourish.
What is a PLCC and Why do Retailers Use Them?
A PLCC (private label credit card) is a type of credit card managed by a bank or commercial finance company that is issued by or for a special retailer.
In simple terms, it’s a store-branded credit card that usually gives the customer some type of benefit.
These cards feel like regular credit cards, but the main difference is that they can only be used at the store (or group of stores) that they represent. The Target REDCard is a good example of this. Cardholders that use it receive 5% off of their purchases, but it can only be used at Target.
Retailers typically use these PLCCs to boost the loyalty and lifetime value of their customers.
A Standalone PLCC Only Appeals to a Small Number of Your Customers
Retailers look fondly upon PLCCs because they can be a lifeline to increase engagement and LTV.
A standalone PLCC, however, isn’t usually an effective way to grow brand love beyond the top tier of your customers.
The credit application process looms as a hurdle too high for some. Consumers often view a PLCC as a declaration of commitment to a specific brand.
Chances are, anyone that is willing to sign up for your PLCC in the first place is most likely a customer that is already shops your brand frequently and engages more frequently than your mid-level customers.
That middle tier is where a loyalty program can help. With a loyalty program on top of your PLCC, your brand is exposure to a larger group of customers. That application process doesn’t seem so daunting when there is also a loyalty program behind it.
Combining a PLCC and a Loyalty Program
Loyalty programs act as a major catalyst that perfectly complements an existing PLCC.
Many retailers with multi-tender loyalty programs receive higher penetrations for their private label and co-branded cards than retailers who focus their program solely on their own credit card.
The combination of a loyalty program and a PLCC not only makes the card more attractive to a broader group of mid-tier customers, but also creates customer retention and higher spend in more customer segments.
Where a PLCC doesn’t always forge clear differentiation, that’s where a loyalty program can significantly magnify your overall customer loyalty offering.
PLCCs largely offer the same benefits for cardholders, but a loyalty program provides that differentiation through targeted offers/rewards and personalized communications.
What’s more, banks place restrictions on how retailers can communicate with their PLCC holders. Many retailers quickly realize that implementing a PLCC without a comprehensive loyalty program is akin to leaving the glass half empty.
When a retailer complements a PLCC with a loyalty program, the allure to sign up is greater. Without the loyalty program, customers who purchase a lot from a specific merchant may avoid the logistics involved in signing up for a PLCC.
A loyalty program for all customers is an enticing thing, which also casts the PLCC in a more favorable light.
Focus on the Data
Enhancing a PLCC with a loyalty program should include a keen focus on customer data.
Data capture from a loyalty program is critical to building relationships between customers and brands.
Loyalty program data should be shared within an entire company. This information can potentially impact various departments ranging from marketing, product design, finance, social media, and e-commerce.
Mining and refining all your valuable customer data beyond transactional results leads to many possibilities to tailor personalized messages.
When executed seamlessly, personalization can elevate customer relationships and forge brand advocates.
It’s All About Relevancy
The message to marketers today revolves around relevancy, the linchpin to sustainable customer loyalty.
The right message at the right time modifies customer behavior. This drives the shift toward personalized communication today. And brands can leverage invaluable customer data from a loyalty program to do just that.
The more personalized, the more relevant, the higher probability of engagement.
If a loyalty program that supports a PLCC can make communication consistently relevant and personalized, then a brand finds itself in a very enviable position.
If customers are members of a PLCC that is integrated with a loyalty program, they usually are more amenable to offer their personal information and keep it updated for rewards purposes.
PLCC and Loyalty Programs: Putting It All Together
Every brand wants to collect customer data that can be leveraged positively in the future.
A PLCC alone doesn’t generate the same incentive to engage without a comprehensive loyalty program around it to lend proper support.
A PLCC might sound a bit stodgy and muted for some people. But, if it is contained inside the umbrella of a loyalty program, that taps into a customer’s emotive sensibilities.
Emotional engagement is so critical today among loyalty marketers. It leads to increased engagement and better results for your brand.
That’s why PLCCs and loyalty programs can (and should) coexist.