MASTERCARD ADVISORS INFORMATION SERVICES | MERCHANT

Big Data Insights to Better Connect with your Customers May 2013 ANDY MANTIS GROUP HEAD | SVP, MERCHANT SOLUTIONS

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Disclaimer

© 2013 MasterCard International Incorporated. All rights reserved. The information contained herein is the confidential information of MasterCard. This presentation may not be redistributed or reproduced, in whole or in part, without the prior written consent of MasterCard. This presentation contains information acquired from the MasterCard Data Warehouse which is comprised of transaction information provided by third parties (i.e. acquirers, and/or merchants) and hence may contain certain errors, omissions or inaccuracies from time to time. The presentation and the data herein is provided for illustrative purposes only; MasterCard shall have no responsibility for any inaccuracies, errors or omissions in any data, analyses or information provided herein which has been based upon data in the Data Warehouse or data otherwise provided by or on behalf of any third party.

Information Services for Merchants

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Agenda

•Evolution of the Customer Relationship •Need for Behavioral Understanding •A New Approach •Micro to Macro Insights •Behavioral Data in Action •Myths of Big Data •MasterCard Advisors Differentiation

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Big Data in Sports

Big Data for Athletes Big Data gives athletes extra edge at high-tech London Olympics – CareerMash

Big Data for Teams: New Baseball Tech Makes 'Moneyball' Look Like Little League – Business Insider Big Data for Fans: NBA Gives Basketball Nerds the Gift of Big Data- Mashable

…and now Big Data for Retailers

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Insight for Merchants

Knowledge of aggregated consumer segment spend both inside and outside of your locations delivers valuable insight for acquisition, loyalty and retention and strategic decisions.

MasterCard delivers this unprecedented 360-degree view to help you:

Understand your market

Benchmark your performance

Grow your customer base

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Evolution of the Customer Relationship

Interpersonal: 1 to 1

6

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Evolution of the Customer Relationship

Purchase Tracking

7

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Evolution of the Customer Relationship

Demographic Analysis

8

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Evolution of the Customer Relationship

Impersonal Relationships

9

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Evolution of the Customer Relationship

Impersonal Relationships

10

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Need for Behavioral Understanding

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Need for Behavioral Understanding

Unique behaviors?

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Need for Behavioral Understanding

Unique behaviors?

Brand affinity?

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Need for Behavioral Understanding

Unique behaviors?

Brand affinity? Time of day?

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Need for Behavioral Understanding

Unique behaviors?

Brand affinity? Time of day?

Distance of travel?

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Need for Behavioral Understanding

Unique behaviors?

Brand affinity? Time of day?

Distance of travel? Competitive spend?

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A New Approach

Macro Micro

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Macro Insights Drive Micro Trends

Sporting Goods sales has

outperformed the broader U.S.

economy 0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13

Sporting Goods Y/Y Sales Growth U.S. Retail Y/Y Sales Growth excl. Auto and Gas

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Micro Insights Drive Macro Trends Ill

ustr

ativ

e

National 12%

State 8%

Local 15%

Macro trends can drive relative merchant performance Merchant Market Share

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National to Local Store Market Performance National

State

Location

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Competitors

32.5%

RANK #1 02903

02917

Merchant

22.7%

RANK #5

02920

02904

Develop Focused Marketing Efforts That Reach The Right Customers

• Identify areas where you

draw customers as well as

opportunities to attract new

customers.

• Market to these target

segments and measure results

over time.

02906

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Behavioral Data in Action

A retailer with an existing loyalty program wanted to identify opportunities for growth.

Primary Objectives: • Increasing customer spend • Gaining market share from competitors

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Behavioral Data in Action

MasterCard Account Spending In Industry

Total Industry

MACRO

Retailer Account Spending

MICRO

Methodology • Establish which customers have the largest

headroom opportunity • Evaluate the opportunity of Top Customers

and Acquisition Target Customers • Act on Acquisition Target Customers to drive

results

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Loyalty Segmentation

$$$$

$$

$

High Medium Low Not Bought

Total Customer Spend in Industry Total Customer Loyalty

to Merchant

Total Customer Spend in Industry

Total Customer Loyalty to Merchant

Methodology

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Loyalty Segmentation

$$$$

$$

$

High Medium Low Not Bought

Total Customer Spend in Industry

Total Customer Loyalty to Merchant

Non Top Customers

Top Customers

Identifying Segments

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Loyalty Segmentation

$$$$

$$

$

High Medium Low Not Bought

Total Customer Spend in Industry

Total Customer Loyalty to Merchant

Top Customers

Quantifying Opportunity

Acquisition Target Customers

Annual Spend At Merchant:

$91 Annual Spend at Competitive Set:

$722

Annual Spend At Merchant:

$527 Annual Spend at Competitive Set:

$381 Illus

trat

ive

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Behavioral Segmentation

Acquisition Target Customer:

Active Lifestyles

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Behavioral Segmentation

General Demographics

Age: 40+ Income: $75K+

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Behavioral Segmentation

Brand Affinities

Apparel Home Appliances

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Behavioral Segmentation

Related Category Spend

Tennis

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Behavioral Segmentation

Unrelated Category Spend

Entertainment

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Behavioral Segmentation

Channel Preferences

Propensity to buy online

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Behavioral Segmentation

360° Customer View

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Behavioral Segmentation

Top Customer: Everyday Spenders

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Behavioral Segmentation

General Demographics

Age: 40+ Income: 75K+

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Behavioral Segmentation

Brand Affinities

Hockey Equipment

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Behavioral Segmentation

Related Category Spend

Electronics

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Behavioral Segmentation

Unrelated Category Spend

Fuel

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Behavioral Segmentation

Channel Preferences

Growing propensity to buy online

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Behavioral Segmentation

360° Customer View

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Acquisition & Engagement

58% (Your Spend) 58%

(Your Spend) 42% (Competitor)

Growth Opportunity

We believe that this provides a new benchmarking metric to allow for a more detailed view of growth, relative to market

Targeted Campaign

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Acquisition & Engagement

58% (Your Spend) 58%

(Your Spend) 42% (Competitor)

KNOW ACT MEASURE

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Myths of Big Data

Myth 1: Raw data is enough.

Myth 2: All sources are created equal.

Myth 3: Big data breeds Big Brother.

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Why MasterCard is Uniquely Qualified

• 1.9 billion global cards.

• 160 million transactions/hour.

• Knowledge of aggregated, holistic consumer spend delivers key insights for acquisition, loyalty and retention.

• MasterCard delivers this unprecedented 360-degree view, from macro economic to micro segmented, spanning a full range of industries.

Driving business advantage through insight and foresight and engagement

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