5 Ways Embedded Finance Can Increase Your Brand’s CLV
Embedded Finance

5 Ways Embedded Finance can increase your CLV

For some brands, the biggest challenge isn’t finding new customers. Rather, it’s keeping the ones they've already earned. 

On average, a company loses 10-25% of its customer base every year. At the heart of this dilemma is understanding the importance of customer value, which speaks directly to how a customer perceives their experience with your brand. While most Fortune 1000 companies understand the importance of customer value, less than 7% actually have a dedicated C-level role focused on retention. 

Today’s consumers are interested in spending their time and money with brands that deliver personalized experiences. From unique rewards and loyalty programs to customized content and tailored product offerings, brands that are focused on delivering meaningful experiences are seeing an increase in customer lifetime value (CLV) rates. 

One particular technology that brands are utilizing to increase CLV rates is embedded finance, which allows brands to implement financial services directly into their existing core offerings. From bank accounts and branded cards to international payments and customizable rewards programs, embedded financial services can, to put it simply, make your customers happy and bring them to you more often, which in turn boosts customer loyalty and retention rates.  

Here are five ways embedded finance can be used to increase your brand’s CLV.


1. Customized rewards programs

When a customer feels like they’ve received a superior product or service from a brand, they’re more inclined to share the good news with friends and family members. They’re also more likely to spend money with your brand. A great way to increase your CLV and build brand loyalty is to offer more customized rewards programs.

Embedded finance enables brands to offer rewards that are tailored specifically to every customer. And we’re not talking about generalized cash-back rewards programs that credit cards offer. We’re talking about exclusive rewards that really matter and speak directly to individual customers.  

Imagine Nike offering a branded card that delivers early access to limited edition shoe releases or exclusive athlete-sponsored NFTs. Or the Phoenix Suns offering a branded card that rewards die-hard NBA fans with first-chance access to season playoff tickets or merchandise signed by the team.

With embedded finance, brands can tailor their rewards programs to fit each fan or customer’s needs.


2. Seamless, convenient experiences 

Friction points are sure-fire ways to divert a customer’s eight-second attention span. Anything that acts as a barrier to a sale plays a significant part in lowering customer engagement and increasing churn. 

What’s the magic antidote to friction? Convenience. 

Take a look at a food delivery service like Postmates. It integrates payment and location services directly into its app, so customers don’t divert from the platform when placing an order. Customers don’t even have to worry about tipping the delivery driver with cash because all payments are handled during the checkout phase. 

By creating a self-contained ecosystem that unites several different functions within one platform, Postmates’ popularity has soared in recent years, gaining more than $730 million in revenue in 2021 and making over five million deliveries per month.

The key to creating higher customer value and increased retention lies in your brand’s ability to deliver seamless experiences. Embedding financial services directly into your platform creates a one-stop shop solution that packs the ultimate convenience punch.


3. Move money quickly 

Waiting for your money to arrive at its final destination is excruciating. Whether you’re waiting for a deposit to land in your checking account or you’re counting down the days for an international payment to clear, when it comes to the process of moving money, waiting has always been a part of the traditional banking game.

But with embedded finance, the standard waiting rules no longer apply.

When a brand chooses to embed financial services directly into its existing business structure, it unlocks a world of instants for customers and employees. From branded prepaid cards that can be loaded immediately to unlock cash-back savings, to digital wallets that streamline payments, to automated payroll advances, moving money has never been more convenient. And, if a brand has a large customer base that sends money across borders, it can even utilize cross-border remittances which allows customers and employees to send money internationally at lightning-fast speeds. 

The more instant gratification a brand can offer — especially along the lines of monetary services — the happier (and more loyal) the customers and employees will be.


4. More options, more opportunities 

People crave options because they promote individuality.

Embedded finance enables any brand to deliver a host of convenient financial options that are designed to keep customers loyal and engaged. For instance, your brand could provide mobile check deposit and cash-loading opportunities at ATMs. Or, it could simplify the purchasing process by offering a Buy Now, Pay Later program. You could even enable your customers to buy, hold, sell and convert cryptocurrencies. Embedded finance opens the doors to a new world of customized financial solutions that improve your customers’ everyday lives. 

As the global economy continues to grow, international financial service options are a must for any brand. With an embedded finance partner like Alviere, a brand can enable its customers to send and receive money around the world in 100+ countries and currencies.

The more options your brand can provide for its customers, the more opportunities it has to increase CLV, retention, and revenue.


5. Capture data to improve user experience 

When it comes to creating personalized experiences, utilizing first-party customer spend data should always be in a brand’s CLV strategy playbook. 

First-party data is information that a company collects directly from its customers via interactions on websites, apps, social media sites, surveys, and more. This type of data, which includes purchase history, interests, time spent on a website, and demographics, is the “holy grail” of customer information and can pave the way for brands to deliver more personalized content, ads, and experiences. 

Prior to the advent of fintech companies, when a brand chose to offer financial services to its customers, such as a credit card, the process required the use of a traditional bank. Such “partnerships” were oftentimes very one-sided with banks capturing all of the customer data – including the first-party data – and keeping it for themselves. 

But new financial technologies, such as embedded finance, are enabling brands to take control of the customer data to improve personalization and marketing spend impact. When a brand embeds financial services with a partner such as Alviere, it gains ownership of the first-party customer spending data. So whenever your brand-issued debit, credit, or prepaid card is used by a customer, your brand automatically captures the transactional-level spending data from that purchase, whether it happens in or out of your store. 

Once you can see when, where, and how customers spend, your brand can optimize and micro-target its marketing outreach efforts accordingly. For example, if your brand sees that its customers are spending their prepaid promotional cards on DoorDash, your brand could launch a targeted ad that says, “spend $100 on our website, and we’ll give you a $10 gift card to use at DoorDash.” Or, if your brand sees a trend that customers are paying for Lyft rides using your brand’s credit card, you could pursue a new partnership opportunity with the ride-sharing platform to boost customer acquisition and loyalty. 

Embedded finance has the power to unlock valuable customer insights that can be used to deliver enhanced personalized experiences. The more you know your customer (KYC), the more you know how to serve them up ads, offers, and rewards that incentivize them to come back…again and again.

Embedding financial services into your brand’s existing business structure can unlock new opportunities to improve customer lifetime value and pave the way for new revenue opportunities. 

Reach out to us today, so we can work together to outline a customized solution for your unique customer base and business goals.

Written by Alviere