Every purchase tells a story

The Secret Sauce to Retaining Customers

‍
‍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.
‍‍

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 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 newest Loyalty Movement Report, we dive into customer behavior in the Grocery category to better understand engagement over time by analyzing the entire grocery category with more than $200B in consumer spend behavior.*

Grocery Category Loyal Customers

On average, 58% of a merchant’s customers are not actually  loyal. But the loyal segment has a much higher share of wallet (84%) than a not loyal segment (18%).

Top Customers (top 20% of most frequent transactors) still show that more than ⅓ are not loyal customers. Yet the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at all groceries 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.

Grocery Loyalty Movement

Overall, quarter over quarter, 60% of customers tend to remain in their existing segments while 40% increase or decrease their loyalty to a merchant. Yet 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 (33%)  and down (37%) - into other segments. 

Grocery Leaky Bucket

Grocery brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 81% and 71% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 20% staying the same).
• Loyal customers are far less likely to churn. Customers that are Tied are 42% more likely to churn and customers that Prefer the competition are 185% 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 brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 42%-185% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, 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 Grocery category in our data, collectively representing over $200bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into approximately 1 of every 2 card-based transactions in the U.S., allowing us to see where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Learn more at www.cardlytics.com.

‍

At Cardlytics, we believe in making commerce more rewarding for everyone. We’ve created a unique platform where everyone benefits – our brand advertisers, our financial institution partners, and consumers – and finds meaningful value in card-linked offers and cash back rewards. 

We continue to strengthen and build on our extensive network, welcoming new financial institution partners and brand advertisers with a shared mission of bringing more value to consumers. We’re delighted to launch our newest partnership with American Express, whose proprietary owned digital advertising platform, Amex Offers, continues to transform to meet the demands of a dynamic retail environment and bring value to Amex Card Members and merchant advertisers. Together, we're working to scale the number of card-linked offers on the platform, helping more advertisers market to Amex Card Members and providing Card Members with access to more value through cash back rewards via the personalized digital experience they already know.

We look forward to ramping up our partnership in the coming months and delivering relevant and personalized offers to Amex Card Members at scale.

Big Box Retail: Stop Taking Customer Loyalty for Granted‍

‍
‍Introduction
‍‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over 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 Big Box category to better understand engagement over time by analyzing 8 brands with more than $400B in consumer spend behavior.*

Big Box Retailer Category Loyal Customers

On average, 76% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (70%) than a not loyal segment (15%).

Top Customers (top 10% of most frequent transactors) are evenly split between loyal and not loyal customers. But the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at 8 big box retailers 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.

‍Big Box Loyalty Movement

Overall, quarter over quarter, almost 80% of customers tend to remain in their existing segments while 20% increase or decrease their loyalty to a merchant. Yet 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 (29%)  and down (36%) - into other segments. 

‍Big Box Leaky Bucket

Big Box brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 87% staying the same). Those customers that are Tied have the greatest propensity for a behavior change (with only 32% 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 250% 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 brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 50%-250% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, 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 a sample of 8 of the largest merchants including a mix of online marketplaces, memberships and omni-channel retail, collectively representing over $400bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into approximately 1 of every 2 card-based transactions in the U.S., allowing us to see where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Learn more at www.cardlytics.com.

Executive Summary

• Advertisers have increasingly used MMMs to better analyze the performance of their marketing efforts across channels, but continue to face some challenges with data.
• Measurement of card-linked offer (CLO) programs have also historically posed a challenge to MMMs.
• Cardlytics is working with leading marketing measurement experts to develop best practices for integrating Cardlytics campaign data into media mix models, helping our advertisers more accurately measure incremental impact of Cardlytics campaigns and the rest of their marketing program.

‍Media Mix Models and card-linked offers

For brand advertisers to truly understand and analyze the performance of their marketing efforts, measurement plays an essential role. Since it is not enough to analyze the performance of a single channel in isolation, advertisers lean on Media Mix Modeling (MMM) solutions to better understand the full picture of their marketing efforts, which channels are impacting their overall spend, and how to determine future budget allocation. MMMs have been especially beneficial for marketing analysis and reporting, marketing budget optimization, scenario planning, and performance tracking – but advertisers continue to face challenges with data quality, invalid or incomplete data inputs, and accounting for broader shifts in market economics. 

Measuring the effectiveness of card-linked offer (CLO) programs, such as Cardlytics’ platform, have historically posed a challenge to MMMs. Because our platform shows digital ads within the walled environment of digital banking channels and measures performance through card-linked data from our banking partners, it has been difficult for advertisers to get an accurate view of CLO performance. 

‍Integrating Cardlytics data with MMMs 

To help our advertisers address these challenges with CLO measurement, we are excited to announce that Cardlytics will be working with leading MMMs, including Analytic Partners and Ipsos MMA. By integrating Cardlytics data into these models, we are able to help our advertisers, modelers and analysts better understand the unique value of our platform as part of the overall marketing mix. 

Through a tailored training program with each MMM, we are working together to ensure that:

• Cardlytics data is properly incorporated into their models 
• Modelers understand how Cardlytics and card-linked offers work, and how CLO campaigns are measured 
• Data is interpreted appropriately and modelers are equipped with best practices for potential enhancements to their models (e.g., elevating lower-funnel metrics such as clicks and redemptions, rather than just ad impressions) 

In addition to integrating into MMMs, Cardlytics continues to invest in our own Test vs. Control solution to demonstrate the incremental benefits of our platform.

‍Considerations for enhancing measurement 

It’s important for advertisers to keep the following considerations in mind when thinking about CLO measurement with MMMs:

• Pay-for-performance advertising means that model relationships seen in other digital channels may not exist. Some models are better for upper-funnel media channels, which may not be appropriate for measuring the effectiveness of CLO campaigns.
• Our adstock and ability to provide campaign-level detail are unique, and provide full funnel visibility for deterministic customers, from impression to engagement to purchase. 
• Supplementing with customer-level metrics (e.g., Cardlytics’ Test vs. Control analysis) can provide a more comprehensive picture of campaign effectiveness. 

If you are interested in learning more or already partner with an MMM, reach out to your Cardlytics Account Manager or email mmm@cardlytics.com to discuss how we can help ensure your CLO program is being measured properly.

The Secret Sauce to Retaining Customers

‍
‍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.
‍‍

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 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 newest Loyalty Movement Report, we dive into customer behavior in the Grocery category to better understand engagement over time by analyzing the entire grocery category with more than $200B in consumer spend behavior.*

Grocery Category Loyal Customers

On average, 58% of a merchant’s customers are not actually  loyal. But the loyal segment has a much higher share of wallet (84%) than a not loyal segment (18%).

Top Customers (top 20% of most frequent transactors) still show that more than ⅓ are not loyal customers. Yet the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at all groceries 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.

Grocery Loyalty Movement

Overall, quarter over quarter, 60% of customers tend to remain in their existing segments while 40% increase or decrease their loyalty to a merchant. Yet 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 (33%)  and down (37%) - into other segments. 

Grocery Leaky Bucket

Grocery brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 81% and 71% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 20% staying the same).
• Loyal customers are far less likely to churn. Customers that are Tied are 42% more likely to churn and customers that Prefer the competition are 185% 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 brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 42%-185% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, 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 Grocery category in our data, collectively representing over $200bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into approximately 1 of every 2 card-based transactions in the U.S., allowing us to see where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Learn more at www.cardlytics.com.

‍

At Cardlytics, we believe in making commerce more rewarding for everyone. We’ve created a unique platform where everyone benefits – our brand advertisers, our financial institution partners, and consumers – and finds meaningful value in card-linked offers and cash back rewards. 

We continue to strengthen and build on our extensive network, welcoming new financial institution partners and brand advertisers with a shared mission of bringing more value to consumers. We’re delighted to launch our newest partnership with American Express, whose proprietary owned digital advertising platform, Amex Offers, continues to transform to meet the demands of a dynamic retail environment and bring value to Amex Card Members and merchant advertisers. Together, we're working to scale the number of card-linked offers on the platform, helping more advertisers market to Amex Card Members and providing Card Members with access to more value through cash back rewards via the personalized digital experience they already know.

We look forward to ramping up our partnership in the coming months and delivering relevant and personalized offers to Amex Card Members at scale.

Big Box Retail: Stop Taking Customer Loyalty for Granted‍

‍
‍Introduction
‍‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over 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 Big Box category to better understand engagement over time by analyzing 8 brands with more than $400B in consumer spend behavior.*

Big Box Retailer Category Loyal Customers

On average, 76% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (70%) than a not loyal segment (15%).

Top Customers (top 10% of most frequent transactors) are evenly split between loyal and not loyal customers. But the loyal customer segment shows an almost 3x higher share of wallet.

Findings

We looked into purchase data at 8 big box retailers 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.

‍Big Box Loyalty Movement

Overall, quarter over quarter, almost 80% of customers tend to remain in their existing segments while 20% increase or decrease their loyalty to a merchant. Yet 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 (29%)  and down (36%) - into other segments. 

‍Big Box Leaky Bucket

Big Box brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 87% staying the same). Those customers that are Tied have the greatest propensity for a behavior change (with only 32% 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 250% 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 brands neglect current customers, they risk losing them and undoing past investment - not loyal customers are 50%-250% more likely to lapse/churn than loyal customers. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, 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 a sample of 8 of the largest merchants including a mix of online marketplaces, memberships and omni-channel retail, collectively representing over $400bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into approximately 1 of every 2 card-based transactions in the U.S., allowing us to see where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Learn more at www.cardlytics.com.

Executive Summary

• Advertisers have increasingly used MMMs to better analyze the performance of their marketing efforts across channels, but continue to face some challenges with data.
• Measurement of card-linked offer (CLO) programs have also historically posed a challenge to MMMs.
• Cardlytics is working with leading marketing measurement experts to develop best practices for integrating Cardlytics campaign data into media mix models, helping our advertisers more accurately measure incremental impact of Cardlytics campaigns and the rest of their marketing program.

‍Media Mix Models and card-linked offers

For brand advertisers to truly understand and analyze the performance of their marketing efforts, measurement plays an essential role. Since it is not enough to analyze the performance of a single channel in isolation, advertisers lean on Media Mix Modeling (MMM) solutions to better understand the full picture of their marketing efforts, which channels are impacting their overall spend, and how to determine future budget allocation. MMMs have been especially beneficial for marketing analysis and reporting, marketing budget optimization, scenario planning, and performance tracking – but advertisers continue to face challenges with data quality, invalid or incomplete data inputs, and accounting for broader shifts in market economics. 

Measuring the effectiveness of card-linked offer (CLO) programs, such as Cardlytics’ platform, have historically posed a challenge to MMMs. Because our platform shows digital ads within the walled environment of digital banking channels and measures performance through card-linked data from our banking partners, it has been difficult for advertisers to get an accurate view of CLO performance. 

‍Integrating Cardlytics data with MMMs 

To help our advertisers address these challenges with CLO measurement, we are excited to announce that Cardlytics will be working with leading MMMs, including Analytic Partners and Ipsos MMA. By integrating Cardlytics data into these models, we are able to help our advertisers, modelers and analysts better understand the unique value of our platform as part of the overall marketing mix. 

Through a tailored training program with each MMM, we are working together to ensure that:

• Cardlytics data is properly incorporated into their models 
• Modelers understand how Cardlytics and card-linked offers work, and how CLO campaigns are measured 
• Data is interpreted appropriately and modelers are equipped with best practices for potential enhancements to their models (e.g., elevating lower-funnel metrics such as clicks and redemptions, rather than just ad impressions) 

In addition to integrating into MMMs, Cardlytics continues to invest in our own Test vs. Control solution to demonstrate the incremental benefits of our platform.

‍Considerations for enhancing measurement 

It’s important for advertisers to keep the following considerations in mind when thinking about CLO measurement with MMMs:

• Pay-for-performance advertising means that model relationships seen in other digital channels may not exist. Some models are better for upper-funnel media channels, which may not be appropriate for measuring the effectiveness of CLO campaigns.
• Our adstock and ability to provide campaign-level detail are unique, and provide full funnel visibility for deterministic customers, from impression to engagement to purchase. 
• Supplementing with customer-level metrics (e.g., Cardlytics’ Test vs. Control analysis) can provide a more comprehensive picture of campaign effectiveness. 

If you are interested in learning more or already partner with an MMM, reach out to your Cardlytics Account Manager or email mmm@cardlytics.com to discuss how we can help ensure your CLO program is being measured properly.