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In the ever-evolving landscape of advertising, brands are constantly seeking innovative and effective ways to connect with new customers and drive sales. One increasingly powerful tool gaining significant traction is the card-linked offer (CLO). This unique approach to customer acquisition leverages real-time purchase data to deliver targeted offers directly to consumers through their payment cards, creating a seamless and impactful experience.

CLOs are rapidly becoming a key driver for both online and in-store transactions. Their effectiveness stems from the ability to tap into actual consumer spending habits, providing advertisers with a level of precision and insight often unmatched by traditional channels. By analyzing past customer purchase behavior, brands can identify and target high-value, in-market audiences with relevant offers, fostering a higher likelihood of conversion and repeat business.

What Makes CLOs a Game-Changer?

Compared to conventional performance marketing tactics, CLOs offer several distinct advantages:

• Data-Driven Precision: CLOs provide access to rich, deterministic purchase data, eliminating the reliance on probabilistic estimations. This allows for highly accurate targeting of specific consumer segments based on their actual spending patterns.
• Measurable Incrementality: One of the most compelling benefits of CLOs is the ability to accurately measure the incremental impact of marketing campaigns. By establishing clear test and control groups based on historical purchase data, advertisers can gain a true understanding of the uplift generated by their offers.
• Fraud-Free and Brand-Safe Environment: Operating within the secure infrastructure of financial institutions, CLOs offer a 100% bot and fraud-free environment, ensuring that advertising spend reaches genuine consumers.
• Omnichannel Reach: CLOs are effective in driving both online and in-store sales, providing a unified approach to reaching consumers regardless of their preferred shopping method. This omnichannel capability is crucial in today's interconnected marketplace.

The Evolution of CLOs: Trends Shaping the Future

The landscape of card-linked offers is continuously evolving, driven by advancements in technology and a deeper understanding of consumer behavior. Key trends shaping the future of CLOs include:

• Enhanced Personalization: Leveraging the power of machine learning, CLOs are becoming increasingly sophisticated in delivering hyper-personalized offers tailored to individual consumer preferences and predicted future needs.
• Deeper Data Integration: The integration of CLO platforms with CRM systems and data connectivity partners enables advertisers to layer their own first-party data with transaction insights, leading to even more refined targeting and a holistic view of their customers.
• Expansion into New Verticals: While traditionally strong in sectors like dining, retail, and travel, CLOs are expanding their reach into new and unexpected industries like the auto industry, demonstrating their versatility and broad applicability.

Building Brand Loyalty Beyond the Transaction

The power of CLOs extends beyond simply driving a single purchase. By strategically utilizing targeted offers and understanding customer behavior, brands can foster long-term loyalty. CLOs enable businesses to re-engage lapsed customers, incentivize repeat purchases, and cultivate stronger relationships with their most valuable consumers.

Cardlytics and Qualtrics recently partnered to survey shoppers and evaluate the perspective of customers who leverage card-linked offers. Unsurprisingly, the survey found that CLOs create a more rewarding experience for shoppers and can act as that critical tipping point to influence purchase decisions.

In fact, the data shows customers spend more with card-linked offers in-hand:

• 60% of customers engage more with card-linked offers when their finances are tight
• 64% agree that having card-linked offers encourages them to spend more per transaction
• 72% of customers are more likely to spend with a brand that offers card-linked rewards 

Integrating CLOs Into Your Advertising Strategy

While CLOs offer significant potential, advertisers must understand how they fit into their broader strategy. As the lines between traditional affiliate marketing and CLOs become increasingly blurred through greater network integration, a unified approach is emerging. However, it's crucial to recognize the unique attribution models associated with CLOs, which often focus on overall incremental lift rather than last-click attribution.

Navigating the CLO Landscape: Key Considerations

For brands considering implementing a CLO program, several factors are crucial for success:

• Understanding the Nuances: It's vital to recognize how CLOs differ from traditional affiliate marketing and understand their specific capabilities and limitations.
• Strategic Budgeting: Carefully consider the pricing models associated with CLOs, whether it's a cost-per-acquisition model or funding the offer directly.
• Focusing on Incrementality: Shift the focus from simple return on ad spend to measuring the true incremental return generated by CLO campaigns.
• Leveraging Data Wisely: Tap into the rich data insights provided by CLO partners to refine targeting, personalize offers, and understand customer behavior.
• Embracing Testing: Like any effective advertising channel, experimentation is key to unlocking the full potential of CLOs.

The Future Is Linked

Card-linked offers represent a powerful evolution in customer acquisition and engagement. By harnessing the wealth of purchase data available, brands can connect with consumers in a more relevant, personalized, and measurable way.

Cardlytics is not only a leading commerce media platform, but we are also the pioneer in card-linked offers. Through our partnerships with top financial institutions, we have visibility into approximately $5.8T in annual consumer spend, allowing us an unrivaled view of consumer spending. Our platform helps you reach real customers at the right time when they are thinking about how and where to spend their money. With targeting based on past purchase history, our offers provide real value to consumers and act as the critical tipping point for a purchase.

As technology advances and the integration of CLOs within the broader marketing ecosystem deepens, this innovative approach is poised to play an increasingly vital role in driving business growth and fostering lasting customer relationships. Get started with Cardlytics today to see how CLOs can help your brand acquire customers and strengthen customer loyalty in today’s economic climate: https://www.cardlytics.com/marketing-solutions

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a commerce media platform, powered by our publishers’ first-party purchase data, that makes commerce smarter and more rewarding for everyone. We offer a range of solutions to help advertisers and publishers, including financial institutions, grow and strengthen customer loyalty. With visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K., Cardlytics enables advertisers to engage consumers at scale and drive incremental sales through our industry-leading financial media network. Publisher partners can enhance their platforms with relevant and personalized offers that improve the shopping experience for their customers. Cardlytics also offers identity resolution capabilities through Bridg, which helps convert anonymous shoppers into known and reachable customers. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, Los Angeles, Champaign, New York and London. Learn more at www.cardlytics.com or follow us on LinkedIn.

Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed billions in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In this Report, we dive into customer behavior in the QSR category to better understand engagement over time by analyzing more than £5.8bn in consumer spend behavior.*

Findings: loyalty is fluid, not fixed 

We looked into purchase data at all QSRs in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior. 

‍QSR Loyalty Movement

‍Overall, quarter over quarter, 36% of customers tend to remain in their existing segments and 26% increase or decrease their loyalty to a merchant, showing that QSR customers tend to be more promiscuous than other industries. Also, there is much more extensive customer loyalty movement within the “not loyal” segments. 

‍Findings: segment movement 

Diving deeper into the individual segments tells us:

• Loyal customers are the most stable, with 58% staying Loyal.
• Prefer customers also show strong retention — 52% remain in that segment.
• Tied customers are the most fluid — only 10% stay Tied, while 58% shift into Loyal or Prefer.
• Churn risk is highest for Prefer customers, with 35% lapsing — nearly 2x higher than Loyal customers (20%).

‍Segment movement
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Customer movement is happening across all segments, but the Tied group shows the highest churn – only 10% remain Tied, while a combined 58% shift into either Loyal (32%) or Prefer (26%). This volatility signals an opportunity to convert mid-loyalty shoppers with targeted interventions.

QSR Leaky Bucket 

QSR brands are losing customers faster than they are acquiring them – with Lapsed customers (22.3%) outpacing New customers (15.9%). This signals a need to strengthen retention strategies to prevent long-term erosion of customer loyalty.

Takeaways: It’s more costly to acquire or re-acquire customers than to keep existing ones engaged. 

Our analysis shows that 22% of QSR customers have lapsed, outpacing the 15.9% of new customers being acquired. Brands are at risk of net customer loss unless they prioritise loyalty-building efforts.

Our segment movement data also reveals that “Tied” customers are the most fluid, with 90% shifting into other behaviours — with both gains and losses. In contrast, Loyal customers remain relatively stable, and Prefer customers show moderate retention.

To protect and grow market share, marketers must go beyond acquisition. Nurturing relationships and strengthening loyalty can have a direct impact on retention and revenue. 

To foster loyalty, consider these recommendations:

• Deploy an “always-on” strategy to stay connected with customers, regardless of purchase frequency.
• Continuously refine customer segments and tailor reward structures to reflect shifting behaviours.
• Launch targeted campaigns focused on converting fluid segments (like Tied and Prefer) into Loyal customers.

The Secret Sauce to Retaining Customers

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‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into customer behavior in the QSR category to better understand engagement over time by analyzing more than $44B in consumer spend behavior.*

QSR Category Loyal Customers

On average, 81% of the category’s customers are not actually  loyal to any brand. But the loyal segment has a much higher share of wallet (67%) than a not loyal segment (15%).

Top Customers (top 10% of most frequent transactors) are show  reverse allegiance vs overall customers. And the loyal customer segment shows more than 3x higher share of wallet.

Findings

We looked into purchase data at all QSRs in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior. 

QSR Loyalty Movement

Overall, quarter over quarter, 58% of customers tend to remain in their existing segments and 21% increase or decrease their loyalty to a merchant, showing that QSR customers tend to be more promiscuous than other industries. Also, there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment Movement

While all segments show purchase behavior movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (26%) and down (45%) - into other segments.

QSR Leaky Bucket

QSR brands are acquiring new customers at a 3x faster clip than they are losing customers. Yet these customers are less loyal to any specific brand so nurturing the relationship is key.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 63% and 72% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 13% staying the same).
• ‍Loyal customers are far less likely to churn. Customers that are Tied are 50% more likely to churn and customers that Prefer the competition are 100% more likely to churn!

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When QSRs neglect current customers, they risk losing them and undoing past investment - not loyal customers are 50%-100% more likely to lapse/churn than loyal customers. But also QSRs are doing a relatively good job of bringing in new customers so staying top of mind is even more important. Marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with  insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

‍* *For this report, we've selected the entire QSR category in our data, collectively representing over $44B in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
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About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a commerce media platform, powered by our publishers’ first-party purchase data, that makes commerce smarter and more rewarding for everyone. We offer a range of solutions to help advertisers and publishers, including financial institutions, grow and strengthen customer loyalty. With visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K., Cardlytics enables advertisers to engage consumers at scale and drive incremental sales through our industry-leading financial media network. Publisher partners can enhance their platforms with relevant and personalized offers that improve the shopping experience for their customers. Cardlytics also offers identity resolution capabilities through Bridg, which helps convert anonymous shoppers into known and reachable customers. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, Los Angeles, Champaign, New York and London. Learn more at www.cardlytics.com or follow us on LinkedIn.