[Playbook] How to Optimize Customer Activation + Boost Spending Rate
November 7, 2022
You’ve won the customer, but there’s one critical end-point of the customer acquisition cycle to remember: do they fit into your customer spending cycle?
Better yet, will that customer get monetized? Accelerating digital banking and payments account activation and funding maximizes spending rates, but business leaders need strategic plans to bring those new customers through the onboarding process. Many financial services organizations overlook the critical nurturing stages that bring customers from account creation to activation to spending.
The consequence? Costly churn and negative ROI. It’s important to know if you are gaining or losing money with each customer acquisition. All customers are not created equal, and you must have the formula to drive stickiness with the right customers. That’s why the process of getting a new registered cardholder activated, and getting to actively fund their new accounts and then transact is pivotal to your bottom line.
This is the financial account activation challenge so many financial services organizations face. We’re here to guide you through a step-by-step process called the Galileo Spending Loop. Understanding how to navigate this spending loop can help you proactively address the financial account activation challenge to boost customer retention, accelerate time to revenue, increase customer lifetime value and — most importantly — boost your program’s ROI.
Navigating the Financial Account Activation Challenge:
There are many chances for customers to drop off your radar before they even become part of your ecosystem, which is why each day of the activation cycle matters. Even small improvements in activation rates correlate to customer stickiness, improvement in customer engagement, the chance to win top-of-wallet status and generate revenue opportunities via interchange.
The fintech growth model of rushing to acquire customers without consideration for what value they present for the platform is where companies can get into a bind. Growth figures based on inactive customers can create a false sense of success and is an unsustainable way to achieve customer acquisition ROI. Instead, building a profitable program revolves around getting more customers to activate their accounts, and then keeping them engaged and transacting.
The key to overcoming the activation challenge is minimizing the friction between account creation, activation, funding, and ongoing spending. This requires 3 key areas to consider:
Delivering strategies for fast, frictionless activation so you are engaging customers with the right programs at the right time.
Positioning yourself in the customer spend cycle — from onboarding to activation, growth and providing value-add services, you must nurture your customers through each stage.
Ensure you’re attracting the right customers from the start so your team can remain focused on those who present the most potential for account funding growth.
Of course, there are plenty of places where activation can go wrong that can have a negative impact on your active user base and overall average lifetime value. That’s where companies need actionable steps to remove friction and delays from this process.
In our new eBook, The Payments Growth and Activation Playbook, we address how business leaders can uplevel their card program strategies to improve KPIs across:
ROI: which strategies drive short- and long-term ROI
Time to revenue: which features have the biggest impact on time to revenue
Customer lifetime value (CLTV): who are your best customers and how to increase your lifetime value through ongoing engagement, incentivized spending and retention.
Don’t fret - this process doesn’t have to be daunting. We are your guide to make this process faster and easier. Building a solid foundation gets activation done right and helps you unlock maximum ROI with a customer acquisition strategy. Successful customer activation, incentives and engagement set the stage for monetizing every other phase of the customer lifecycle moving forward.
This playbook provides business leaders a path through the four stages of the activation challenge and the customer lifecycles, which include:
Onboarding: Connect the customer to their account, quickly
Activation: Getting customers to spend
Growth and Value Add: Extending customers’ buying power
Marketing: Keeping customers aware through an omnichannel approach
You'll receive answers to questions like:
What is a good customer retention rate?
How many monthly active users do I have?
How do I calculate my funding rate?
How do I improve my activation rate?
When should I put a customer activation strategy together?
Enjoy our Insights?
Create New Revenue Streams with a New Core Banking System
Building a new core banking system has opened up a gold mine of new revenue opportunities for financial service providers to explore.
What’s Driving SMB Demand for Embedded Finance in 2023?
Small and midsize businesses turn to embedded finance to solve pain points. Here are 3 of the top key challenges SMBs are facing in 2023 and the opportunity.
Client Spotlight: How Ness is Incentivizing Health & Wellness
Rewarding users for the choices they make when it comes to spending and living a healthy lifestyle is Ness' mission with the release of their "health card".
Why Galileo’s Buy Now, Pay Later Model Is Different–and Better
Galileo CPO David Feuer explains a different approach to Buy Now, Pay Later and how banks and fintechs can serve consumers better.
The Age of Digital Transformation - How Should Banks Adapt?
Banking is going digital fast–and you need to figure out how to compete with digital-first fintech challengers. Here's what you need to know to stay competitive.
How Do You Select the Best Digital Banking Platform?
Why you need one, what to look for and how to select the best digital banking platform to support your digital banking strategy heading into the new year.