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Changing the Direction of Banking: A Q&A with LendingClub® on Personalization and Delivering Customer-Centric Benefits

August 23, 2023 Loyalty360
Changing the Direction of Banking: A Q&A with LendingClub® on Personalization and Delivering Customer-Centric Benefits
Leaders in Customer Loyalty, Powered by Loyalty360
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Leaders in Customer Loyalty, Powered by Loyalty360
Changing the Direction of Banking: A Q&A with LendingClub® on Personalization and Delivering Customer-Centric Benefits
Aug 23, 2023
Loyalty360

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LendingClub® was founded in two unlikely ways. First, it began during the Great Recession of 2007, when banks were not issuing loans because of the economic climate. Second, it started as a Facebook app connecting users with personal lenders. But its model disrupted the personal loan industry. At a time when banks were looking out for their own interests, LendingClub® was working to take care of its members. 

The company focuses its efforts on developing financial health in its members. With this focus, it provides a range of perks, benefits, and support to build space in members’ budgets and put cash in their pockets. One of its primary resources is the Stackit rewards program, which uses customer data to automatically deliver discounts and cashback on purchases. 

Mark Johnson, CEO of Loyalty360, spoke with Amber Carroll, SVP, Membership & Lifecycle Marketing for LendingClub®, about the brand’s customer loyalty initiatives, how it continues to disrupt the industry, and how Stackit uses personalization to drive engagement with the program.  

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Send us a Text Message.

LendingClub® was founded in two unlikely ways. First, it began during the Great Recession of 2007, when banks were not issuing loans because of the economic climate. Second, it started as a Facebook app connecting users with personal lenders. But its model disrupted the personal loan industry. At a time when banks were looking out for their own interests, LendingClub® was working to take care of its members. 

The company focuses its efforts on developing financial health in its members. With this focus, it provides a range of perks, benefits, and support to build space in members’ budgets and put cash in their pockets. One of its primary resources is the Stackit rewards program, which uses customer data to automatically deliver discounts and cashback on purchases. 

Mark Johnson, CEO of Loyalty360, spoke with Amber Carroll, SVP, Membership & Lifecycle Marketing for LendingClub®, about the brand’s customer loyalty initiatives, how it continues to disrupt the industry, and how Stackit uses personalization to drive engagement with the program.  

Mark Johnson:

Good afternoon and good morning. This is Mark Johnson from Loyalty 360. I hope everyone's happy, safe and well. But I welcome you back to another edition of our Leaders in Customer Loyalty series. In this series, we have the privilege of speaking with leading brands about what they are seeing in here on the front lines of Customer Channel and Brand Loyalty. Today we have the pleasure to speak with Amber Carroll. She's the Senior Vice President of Membership and Life Cycle Marketing for Lending Club. How are you today, amber?

Amber Carroll:

I'm doing well, Mark. Thanks for having me.

Mark Johnson:

Absolutely. Thank you for taking the time to speak with us today. We'd like to start these on a more personal note, to get to know the individual we're speaking with. So we'd love to know a little bit more about you, your background, what you do at Lending Club and maybe even a fun fact or a passion you have outside of work.

Amber Carroll:

Perfect. So I lead all of marketing, which includes brand product marketing, owned and paid marketing, social and marketing analytics. I joined Lending Club about two years ago. Actually, it's my anniversary this month. I was really inspired by the company's commitment to its members and its desire to challenge the way banking is done. Prior to Lending Club, I spent 20 years in financial services, working across a variety of roles and functions for some of the biggest brands. My experience also included a six-year tour overseas, working in an international capacity in the protection and credit card businesses.

Amber Carroll:

In terms of fun fact, I am a creative person and I definitely need creative outlets. I often refer to myself as a failed Pinterest mom. I mean, I love Pinterest, always scrolling, and I get inspired by the projects that I see on the platform, and then I try to create my own version. One year, I combined my love of Pinterest with Halloween. I created this slimer costume for my son Mikey. He was five or six at the time. This costume included using a pasta strainer to craft this giant head. It was made with love, but terrible, really, really terrible. Luckily, my son Mikey he has a really big heart and he sure loves his mama, so he actually wore it and he didn't complain and he marched around the kindergarten Halloween parade with pride.

Mark Johnson:

Well, that's good then. I've never been on Pinterest, but I hear it's very creative and a great way to get all kinds of ideas. I just I just redid my daughter's bathroom. So I'm doing a basement now, so I probably should stay away from it because I already have people wanting me to do their next bathroom. I'm like I didn't do it, I just designed it. But so I'll stay away from Pinterest just for that reason.

Amber Carroll:

A little side hustle.

Mark Johnson:

Yeah, it could be so. Lending Club, fintech. Obviously you said you want to kind of change how banking is done. Very passionate about that. Can you give us a brief history of the Lending Club, what you guys do, how you do it, where you do it?

Amber Carroll:

You bet Lending Club has been in business for about 15 years. Our company is no stranger to challenging environments. It was actually started in 2007, during the Great Recession. At that time, credit was being pulled back from everyone, but consumers still really needed some help. Lending Club, believe it or not, was originally a Facebook app that allowed borrowers to post requests for money with personal stories. Investors could read those stories and invest in a person. Investment amounts could be as low as $25. Investors would then earn interest on the loans they funded.

Amber Carroll:

So at that time, lending Club provided a very innovative solution. We took a very traditional credit product the installment loan and we brought it online. Installments installment loans at that time had really fallen out of fashion because it just wasn't as lucrative for traditional banks as credit cards. So we really brought personal loans back into the fray, took a very niche product, we made it digital, we put it online and we made it seamless. Since we launched in 2007, our vision of transforming the banking industry remains the same, and today we remain committed to relentlessly advantaging our members by challenging the way banking is done. And you mentioned this In 2021, Lending Club was the first US fintech to buy a bank, with its acquisition of Radius Bank Corp. So now we offer more ways for people to pay less when they're borrowing and earn more when they're saving.

Mark Johnson:

Okay, interesting. So the micro lending was kind of the genesis for lending club way back with Facebook. I guess it could be micro and a little bit bigger, but that's kind of how it was started. That's interesting.

Amber Carroll:

Yes.

Mark Johnson:

Okay, great. So when you look at the products and services you offer, you have a broad selection of financial products and services you know from bank accounts, personal loans, business loans and more. Is that kind of a full array of the products you offer?

Amber Carroll:

Yeah, yeah, we have definitely grown, and there's more to come. We are actively building products that will meet our members' needs.

Mark Johnson:

That's awesome. So when you look at your loyalty program, how does your loyalty program work, how do Lending Club members engage with it and what are the benefits to those who are part of the program?

Amber Carroll:

Yeah. So just starting a bit back, in my opinion, our member loyalty goes well beyond the traditional views of points, earn and burn programs. Our member loyalty is really built into our core products and servicing, and this shows up Mark in what we call know me, show me and reward me experiences and interactions. So I'll step you through it a bit. So we talk about know me when our members come back to do more business with us and we do have one of the highest repeat business rates in our space. We have the data to create a frictionless experience right. Our members are not entering their name and address over and over again just because they're either taking out an additional product right or doing a different type of business with us. And you know we really can do that because we have a 360 view of our members right. That allows us to create those simple, seamless experiences we talk about show me. That's really about putting money back in our members' pockets. It's what we do right. That's what we are founded on, that's what we continue to do, and the way we do that is by using advanced analytics to proactively identify savings opportunities. We then surface personalized offers to our members and in a couple of clicks they have money back in their pocket. And just to highlight the savings that we create for our members in some of our core products on average members who do a balance transfer loan with us, they reduce their APR on high rate credit cards by about 4% and that saves them about $1,800 over the life of their personal loan. Right, we could all use a little savings right now.

Amber Carroll:

The last bit is the reward me piece, right. So we provide access to exclusive member products and services, and this includes one of our newest offerings, stackit. So Stackit is a browser extension that shows up for our members providing cash back at their favorite retailers on everyday online shopping. So, unlike traditional offers, they don't have to go find them and link them. There's no hoops to jump through. They search for what they want. If an offer is available, it shows up right in their path. We have over 15,000 merchants that are available. In our rewards program, our customers and members can start redeeming for gift cards once they've accumulated $5.

Amber Carroll:

Stackit also has another great feature where it applies coupons at checkout for the member. So our members can get additional savings without having to scour the internet. I feel like me I'm a deal hunter. I'm out there looking for coupons internet coupons Our members don't have to do it. If there's one out there, we're going to apply it already. So it's called Stackit for a reason Cashback on everyday purchases at 15,000 merchants. Additional coupon codes show up at checkout and our members earn more cash back when they pay with their lending club rewards debit card. So I would call that a triple stack.

Mark Johnson:

That's awesome. When you look at your clients, personalization is a topic that's very germane to your audience. You have about 150 brands that are members. We meet on different topics and personalization is very germane, especially right now, this economic uncertainty we have. When you look at personalization, what does personalization mean to the Lending Club and how do you work to capitalize and personalize in your reward program, your product offering and your branding?

Amber Carroll:

Great question. So marketers have been on the path for personalization for some time now. Right, and our ambitions are going to be very similar to some of the others who are tuning in to your podcast. Right, we want to deliver the right product to each person at the moment that they need it. So, while our ambitions are the same, how a brand like Lending Club shows up is really what's different. Right, as a FinTech Bank, lending Club is well-versed in technology and advanced analytics. One way we are driving personalization is in our marketing messaging. So at Lending Club, we use large language models today to optimize our marketing communications. So themes like recognition, partnering, congratulatory, cheerleading have provided, on average, about a 31% response lift on already strong performing communications. We also use advanced targeting and offer personalization to make sure that we're surfacing and promoting the right offer to our members. So being able to provide messaging and offer personalization at scale has really helped Lending Club maintain, again, that highest return member rate in the industry and strong member satisfaction scores.

Mark Johnson:

One of the big benefits of FinTech obviously the Genesis Company was seeing a market opportunity, market need and being able to execute against it the Facebook start and then obviously buying a bank and then continue to iterate. But how does your company help your members achieve their financial goals? Because obviously the FinTech opportunity can be quite different and you guys are doing some very unique things now how do you help your customers achieve their financial goals?

Amber Carroll:

I think the biggest way is, again, I don't think anyone. I have yet to meet folks who are not looking for savings opportunities, especially in this climate. So again, it's about looking at their current position and if someone is carrying high rate credit card debt, for example, or another example is if someone has purchased a vehicle and they have a loan on that vehicle, we have products that are really designed to lower the cost of borrowing and put that savings back in our members pocket. And to give you a sense, I talked about the $1800 on average for debt consolidation type loans on an auto refi that can look like $2,100. So again, it's about using data, data we see from credit bureau reports, data that we have on their relationship with us and then finding those opportunities to surface pre-approved offers for them to put that money back in their pocket.

Mark Johnson:

You talked about kind of ML/AI, kind of neural networks, and how you were leveraging some of the application. But when you look at some of the technologies out there, customer loyalty is bigger than just the points and the rewards and the thresholds. It's really looking at human behavior kind of from an economic perspective right from behavior economic perspective and integrating technologies that work. So you know, how are you using the chat gpt, ai, ml to help augment your customer loyalty efforts?

Amber Carroll:

Yeah, I would say you know. Technology and specifically chat GPT are super hot topics in the market, right, you can't go anywhere without you know, seeing these, these businesses sprout up or articles on it. And while it's early days, I think there are a few use cases that are easy to see from marketing organizations. But I would also say some areas to watch out for, right. So the first is chat GPT can help generate ideas and it can really cut down research time on content creation. However, right, it's not a straight copy paste. One of the key aspects of marketing and branding is in its differentiation. So content for a brand like Lending Club is delivered with a point of view that helps provide thought leadership. Right, our content also supports building our members knowledge and answering relevant questions about financial services and our specific products and offerings. Right, the last piece is, you know, our content is written in our own unique brand voice. While we do use large language models to optimize our content, these models are calibrated based on our members and it's fine tuned for Lending Club.

Amber Carroll:

Another use case is chat. Again, I don't think you would want to let chat GPT loose and interacting directly with your members or customers, but I think it can help identify the most common requests and the content marketing teams, right, can craft the appropriate responses that reflect the way that the brand engages. These products already exist in the market. The last one I'd call out is research. Right, when a company is starting to think about a new product, right, you can actually ask chat GPT tell me about ex customers in the United States. Right, chat GPT does a great job of summarizing available information. Right, it's limited to the most recent information, but it's a good starting point. Again, a caution here is it shouldn't replace your primary research, which helps identify unique needs that your company or solution can address in a very differentiated way.

Mark Johnson:

Employee engagement is very important in a low-efficiency program offering, but the bigger picture customer experience, customer loyalty efforts and having engaged employees is very important. When you look at the employee engagement piece of the customer loyalty discussion, how do you train your employees or do you engage them differently? Or they just, since it's a fintech company, do they have a proclivity to be more customer focused? How are you doing that and doing it so well?

Amber Carroll:

I love this question. So at London Club, our brand is built not only on how we deliver on our members' needs with our products, but specifically how it feels to engage with us. Our member care team operates with what we call our London Care Ethos, and it's really three things. The first is build a relationship Right. So we're looking to establish rapport through personable language and shared experiences. You've heard me say on our discussion today, members. That's because London Club has members, not customers, and that reflects how important it is to us to build community and inclusion.

Amber Carroll:

The second part of our London Care Ethos is making it easy. We know finances can be complicated. We are here to try to take the complication out and make things simple and easy. The last piece and I think this is really important is around thinking ahead. So it's not about the personal loan they're talking to us about today or a checking account. It's about our members reaching their financial goals. We want to help them to see the bigger picture and work towards that future. I would also add very rarely do you hear the words empathetic or kind with a bank, but at London Club we hear this from our members consistently and it's a point of differentiation and pride for us, and I was recently looking through some of our NPS feedback and one of the things that I saw was London Club makes getting a loan easy and almost effortless, and as you build a relationship with London Club, they become your partners in business and financial solutions. And it gives me goosebumps just thinking about it. But that's it. This is not a one-off. This is consistent feedback from our members.

Mark Johnson:

Okay, and when you look at the economy, we've talked a little bit about some economic uncertainty. One of the things that we've heard from a number of brands is that customer loyalty, loyalty programs can be a hedge against economic uncertainty. How do you think your loyalty program meets the challenge, especially when you look at kind of the financial goals that could be impacted in this time of economic uncertainty?

Amber Carroll:

Yeah, absolutely. I talked about the savings that London Club's core products provide to our members. You see the impact this has on them from the quotes that I just shared and high satisfaction. We are helping them to put savings back in their pocket now. But we know that the cost of everyday items is also going up. Right and Stack it our everyday shopping rewards program helps our members earn cash back on those items and, for example, members who are using Stack it consistently, they're putting about $80 back in their pocket in just a few months. But loyalty isn't just born from rewards, right? Sometimes life happens and it may be a challenge for some of our members to meet their obligations. I think this is where London Club really shines Members who need our help. They receive kindness, empathy and support, not judgment. Our member care team has programs to help our members get back on track, and that sets us apart. This builds partnership, trust and loyalty. At London Club, we have our members backs in good times and also in challenging times.

Mark Johnson:

Excellent. And when you look at your customers, there's a great deal of discussion how customers have changed. They changed. Going into COVID change, coming out of COVID retail to change, financial services had to change. How do you think your customers are changing and how are you adapting to and responding to those changes?

Amber Carroll:

Yeah, I think. Just first a little bit about our members. Right, our members are established. They have strong incomes with good credit. They have historically come to us for lending needs, which already sets them apart. Right, they're active and proactive in managing their finances. Our members are striving to make their finances work for them and to move towards their goals, and so, for me, there's really a natural progression in our relationship with them. First we help them to create financial space and savings right, I've given a few examples here around debt optimization, auto refi or spend earn wins. Then we move on to building greater resiliency right, this ensures that our members can manage when unexpected expenses show up car repairs, medical bills, you name it. And then finally, once they've got that space a bit of a cushion, then they can shift to be more future focused, working towards bigger goals and financial aspirations.

Amber Carroll:

I think the need around proactive, actionable nudges to make your finances work for you and then the ability to easily act has been there for a very long time. Right, it's been in banking a while and this has always come through in the research that I've done. But banks haven't delivered. Banks show consumers pictures of their finances, but they don't tell them, what options they have and the impact of taking those actions, and so I think that the change driven by our current environment is people are looking for actionable solutions and more ways to make their finances work better, more ways to balance the demands of life with a dollar that isn't going as far, and that the change driven by COVID specifically is the willingness and desire to engage digitally More and more. Banking is now something you do, it's not a place you go.

Mark Johnson:

Okay, you've talked a little bit about your customers how their relationship with money changed their financial health, financial literacy. How are their behaviors changing overall?

Amber Carroll:

I think they're again more active in their finances and they're looking for solutions. They're not well, they're not going to sit complacent, and again you see a lot more willingness and openness to work with a provider that offers digital capabilities even more. So right, they want to be able to manage their finances through their mobile device.

Mark Johnson:

Okay when you look at other customer loyalty programs. Are there other programs out there you admire that you're loyal to from a customer loyalty perspective and if so, what do you like about their offering?

Amber Carroll:

So, mark, this is a very timely question. My team has recently done a lot of research, talking to our members, talking to our employees, to ask this very question. What was interesting is like what we heard is some of the favorites are Costco right, access to great deals, comfort and knowing that they will be treated right. You know, credit card offers great cashback rates and useful tiers. Starbucks is another great one. They love the ability to customize how they use the rewards they can pay through the app. And you know, starbucks has essentially become a bank.

Amber Carroll:

So for me personally, I am a huge fan of Nordstrom's. It's a great brand. They have the core tenants of a great loyalty program recognition, right Of the business I give them with a tier status. Right, I'm icon member. Reciprocity the more business I give them, the more I earn. Right, I get more triple point days. Early access to things. Right, there's benefits that come along with it no cost tailoring again. Early access to sales and special events. And then for me, it's their secret sauce, which is an unwavering commitment. Right, they stand behind the quality of the products that they sell. There's hassle-free returns, they give you personal style advice and they have a knowledgeable and friendly staff.

Mark Johnson:

Excellent. And the last question I have what can Loyalty360 do to help you and your team and your customer loyalty journey?

Amber Carroll:

Well, I've definitely tuned into some of the podcasts and it's always great to hear how different companies and brands are approaching their own loyalty programs. Right, a lot of the fundamentals are consistent. I talked about that. So, recognition you know different tiers, reciprocity, benefits, access but the way companies bring their DNA and purpose into the delivery of their programs Mark, these are the insights that come through the conversations you're having with marketing and loyalty of leaders, and myself and my team are all ears.

Mark Johnson:

That's great Well, amber. Thank you very much for taking the time to speak with us today. It was great getting to know you on a more personal level, but also some things you're doing at Lending Club very interesting and some of it's quite profound. So I appreciate all you're doing around customer loyalty, but also to help your customers achieve their financial goals. That's great to hear.

Amber Carroll:

Well, we appreciate the conversation. Thanks for including us, Mark.

Mark Johnson:

Absolutely, and thank you everyone for taking the time to listen to and make sure you join us for another edition of our Leaders in Customer Loyalty series soon. Have a wonderful day.

Intro
Tell us about you and your role at Lending Club
Overview of Lending Club
How does Lending Club's loyalty program work
What does personalization mean to Lending Club
How do you help Lending Club members achieve their financial goals
How has ML/AI impacted your customer loyalty efforts
Employee Engagement
Economic Uncertainty
How have your customers changed since COVID
Financial Literacy and customer behavior
Loyalty programs you admire
What can Loyalty360 do to help you
Outro