Here's how receipt data extraction can skyrocket customer loyalty
Image credit: Sensibill
Yesterday’s traditional receipt data no longer does the trick (and it sure won’t get customer loyalty to stick)
What’s white and black and used all over? If you guessed “receipts”, you’re right on the money.
Receipts aren’t exactly new—heck, the first receipt used to record a sale of goods dates back 5,000 years ago. But since then, receipts (and the receipt data extraction technologies used to read them) have changed a lot. From recording purchases and tracking sales to gathering dust in old shoeboxes, there’s a lot that you can do with these thin, off-white pieces of paper (and even more they can tell you about a customer).
For financial institutions, receipts represent an untapped goldmine of data and insights that could be used to understand their customers on a deeper, more human level. They should be thought of as the single source of truth for gaining a more holistic view of a customer, where FIs can adapt their offerings and services to nurture more loyal, financially healthy customers.
What happens, though, when that goldmine goes untouched and customer receipt data is ignored in favor of doing things the traditional way?
Reaping the rewards of receipts
There’s an old saying that goes, “You don’t know what you don’t know”. In the case of FIs, not knowing your customers means not knowing how to serve them on a more granular, personal level. For customers, that means missing out on a slew of benefits their institution can and should be offering—like tips and advice, rewards, financial health insights, spending metrics, new services, and more.
Welcome, receipt data extraction.
When looking at receipts, the human eye sees surface-level details like what was purchased, how much money was spent, and where the receipt is from. Look at enough receipts from the same customer, and you may start to see a pattern.
Now, dive deeper—think, several layers deep.
How receipt data extraction works
Let’s say that the same customer mentioned above is able to upload their receipts to their mobile banking app, and they upload around 20 receipts per month. With each uploaded receipt, your bank begins to gather more data on that customer, gaining insight into what they’re buying and how they spend their hard-earned money.
Now, imagine your FI had something like a receipt data extraction API that could break down the information from those receipts (right down to the SKU-level) so your institution could understand that customer on such a granular level that you now know:
The customer is a 30-something male
In the last 4 months, he has regularly spent 30% of his budget on groceries and childcare goods
Repeat grocery purchases include diapers, formula, diaper wipes, baby wash, and organic baby food
He regularly purchases these items from a store called Local Mart
The majority of his grocery spend takes place on Thursdays
Most of the items he purchases are bought using discount or coupon codes
As an FI, leveraging receipt data extraction would allow you to gather all of that information to deduce that the customer is most likely a new father who watches his spending by shopping with coupons or during weekly sale periods. In knowing that, you’d also see that he could benefit from a rewards or cashback credit card, an RRSP or 529 Plan for his new child’s future college fund, and a reduced interest rate on his existing line of credit.
Extraction breaks down all of that customer’s receipt data into deeper insights your FI can use to get to know and understand him; once you do, you can tailor every product offering and service to him in a way that actually makes sense for him—both his present and his future. As a customer, he sees that your FI is paying attention to his needs and knows how to serve him better—nurturing a happy, financially healthy, and loyal customer.
Why receipt data extraction matters (for you and your customers)
From a customer loyalty perspective, providing the right products at the right time puts your FI in a unique position to nurture customer relationships. After all, no one enjoys being targeted with irrelevant offers or services that don’t truly benefit them. And, if they can’t get what they need from you, they’ll go elsewhere.
But data extraction isn’t just about placing the right products in front of people at the right time; it’s about making your institution more human through personalization.
67% of millennials and 35% of baby boomers expect products and offers to be personalized; meanwhile, 83% of customers are willing to share personal data if it results in more personalized offerings.
When customers know that their FIs understand them, look out for them, and are tailoring their offerings to their needs, a mindset shift occurs: customers want that engagement from their FIs and they want the personalization, so they’ll share the necessary data to get it.
This goes hand-in-hand with loyalty and engagement. 84% of customers feel being treated like a real person is the key to winning their business, but more than that, 79% of customers feel understanding their needs on a more personal level influences their loyalty. To keep customers from jumping ship to another FI, yours can’t afford to ignore the benefits that receipt data extraction provides in knowing customers as people, and not just another number in the system.
Ancestry as the perfect example
When you want to explore your heritage or family history, you turn to a service or platform like Ancestry to discover who you are and what your family’s heritage looks like. But Ancestry doesn’t just give you a family tree—they fill in all of the blanks in between, allowing you to gain a more in-depth view of your history, right down to your genealogy.
Now imagine if your FI operated like Ancestry does: customers provide surface-level data (in this case, receipts), and an API does the heavy lifting of extracting such in-detail data that you not only know how your customers spend but why they spend, what they need, how they’ll spend in the future, and how your FI can help them achieve whatever their perfect picture of financial wellness looks like.
With Ancestry, people know the exact members of their family and all of the little details that had a hand in shaping where and who they are today. Receipt data extraction enables your FI to do the same thing for its customers on a financial wellness level.
What’s the upside for your FI?
Extraction doesn’t just benefit customers, though it’s certainly one of the top benefits in understanding their needs.
From an operational perspective, harnessing a receipt data extraction API can do much more than just read receipts.
For one, it eliminates the need for manual transcription, where customers no longer need to input data or fill in specific values manually just to get insights into everyday spend. Manual transcription can go the way of the Dodo, as far as we’re concerned!
Receipt extraction also enables you to work more quickly and with accuracy. In the case of our receipt data extraction API, an FI can extract over 150 data points, including merchant, total, items, taxes, and more from a given receipt. It also happens to be scalable across merchants and various receipt formats.
The best part? Our API can be fully integrated with your existing mobile banking solution, where our API leverages our proprietary multi-brain OCR and self-learning machine learning (ML) technologies, to extract and make sense of your receipts - right down to the SKU-level. It’s some truly powerful stuff.
Here’s the secret to using receipt data extraction for customer loyalty
Especially today, keeping customers engaged with any solution (much less digital banking) is a challenge, to say the least.
You’re concerned about customer churn, while customers are concerned they’re not getting the most out of services and solutions—especially when those solutions are meant to look out for their financial well-being.
Extraction helps solve both of those challenges in a few key ways:
By leveraging deeper insights into who your customers are, you’ll know how to serve them better—breeding confidence and loyalty among happy customers
Knowing what your customers need, when they need it, allows you to engage with them in the right way and the right time—rather than creating more noise with irrelevant information and products
Tailoring your approach is simple when you know what customers want and how to position products and messaging—this encourages engagement with digital banking tools that customers keep coming back to, and streamlines digital onboarding
This all ties back to the idea that you don’t know what you don’t know. But what if you did? Customers who have no reason to turn elsewhere are less likely to churn because they get what they need from your institution, all because you leverage deeper, better data.
Taking receipt extraction one step further
Just when you thought receipt data extraction couldn’t get any better…
It does!
This is where segmentation becomes extraction’s best friend.
In a nutshell, segmentation involves segmenting customers based on the data and insights gathered through receipt extraction. Sure, you can segment customers based on surface-level data like demographics (think: age, gender, location), but that only gives you the basics of what you should already know about your customers.
When used in tandem with extraction, segmentation leverages the deepest sources of purchase-level data to unlock unprecedented insights about an FI’s customer base. By marrying transaction data and powerful SKU-level data (for example, from our Receipts solution), we’re able to predictively and proactively get a deeper understanding of individual customers faster than traditional data sources.
This is where new approaches can outpace the old, where the insights you gather can inform more than just personalization—they’ll benefit marketing campaigns, sales initiatives, engagement efforts, onboarding, and more.
And that receipt data? It captures a wealth of SKU-level information that provides your institution with real-time customer behavioral and lifestyle segmentation analysis—allowing you to truly offer more customized experiences and personalized products to customers.
When married together, extraction and segmentation enable you to help drive more tailored solutions, increase wallet share, and ultimately deepen customer loyalty. Now that’s a win-win for you and your customers.