Four ways embedded finance can help businesses improve customer stickiness

5 Minute read
2 years ago

When it comes to retaining and growing business, ‘stickiness’, or the ability to keep customers engaged with your service, both while using it and repeatedly over time, is essential. Customer stickiness helps you close more transactions by keeping them engaged, while an experience that keeps customers coming back raises their lifetime value significantly.

Embedded finance is a powerful tool for driving stickiness among your customer-base. By creating tailored experiences that meet your users’ needs you can enhance the financial elements of the buying journey with simpler processes, additional services or personalisation that retains business long term. In a market where customer experience is the key determiner of success, this can provide a significant advantage to your business.

Simplifying customer experience

As digital becomes the norm, an accessible and straightforward purchasing experience is important for closing a transaction. For online purchasing, embedding payments can shorten the step required to complete a buying journey, enhance convenience, and reduce the risk of your customer not completing their transaction.

Businesses can enhance the ongoing customer experience with tools such as virtual cards. Utu is a technology company that helps customers benefit from tax-free shopping abroad. Instead of relying on photocopies and manually recorded transactions, Utu uses a virtual card powered by Nium. This makes it easier for customers to claim back their refund simply by entering their card number in the credit card field of any tax refund form or kiosk.

Providing value-add services

In the consumer and business space, embedded finance provides the chance to integrate additional services into your buying experience. This uses existing customer information, either provided at checkout or already stored in your customer relation management (CRM), to connect to third-parties to suggest products that are relevant to your audience.

For example, Air Asia has branched into offering additional services that simplify the travel booking experience, such as hotels, travel packages and food delivery through their mobile app Super App. By integrating additional value into its purchasing journey, not only can it increase per customer spend but also become a one stop shop for the travel experience.

Facilitating more valuable purchases

For consumers, more is better when it comes to payment options, especially for high-value purchases, where sticker shock can be one of the most common reasons for abandoning a cart at the point of purchase.

By integrating with a financing partner, retailers can offer buy now, pay later (BNPL) services to make purchases more affordable. These services are increasingly popular, with over 26% of Millennials and almost 11% of Gen Z shoppers having used BNPL to finance their most recent online purchases, as compared to 7.5% of older consumers.

High-end fitness equipment company Peloton has partnered with finance provider Affirm to offer customers an in-context consumer lending option at the point of sale, which quickly accounted for 30% of Peloton’s monthly online sales, enabling sales that would otherwise not have happened.

Creating tailored purchasing experiences

Modern buying experiences rely more and more on providing a tailored experience. With multiple outlets offering similar products at similar prices, knowing when and how to offer something to the right customer can make the difference between growth and stagnation in your business.

Gathering and analysing reliable data on your customer is the foundation of a personalised experience. By embedding payment systems into your existing purchasing journey you can increase visibility over your customers’ transactions, tracking product types, transaction volumes and purchasing rhythms to create bespoke deals that suit their unique needs. 

Starbucks has built data gathering and personalisation into the foundation of its Starbucks Rewards app, making the easiest option for consumers the most beneficial for the businesses. Gathering insights on customer purchases, they can then generate personalised offers and regards to drive repeat business.

Embedded finance can you help build a value-driven relationships with your customers

Embedded finance gives businesses the opportunity to build relationships that go well beyond the initial purchase to provide value throughout the customer lifecycle by delivering convenience, value and insight.

Nium’s flexible platform enables you to customise your own payment flows and build the services you need into your business, all with one API. With one platform, you can create unique experiences for your customers that meet their needs and drive retention and revenue for your business.

To find out how you can use embedded finance to build closer relationships with your customers, get in touch with our team today for a free consultation.

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