From the introductions of Green Shield stamps in Britain in the late 19th century to Betty Crocker box tops in the 1920s and frequent-flier programs in the 1980s, rewards programs aimed at fostering loyalty have evolved to reflect changing consumers’ behaviors and preferences.
The redemption habits of today’s cardholders underscore a growing preference for cash rewards or an equivalent such as gift cards – the idea of “points as currency.” These rewards have displaced yesterday’s toaster or blender and even free airfare.
Particularly troubling is a recent statistic from
Credit unions need to adapt in order to reengage their cardholders.
Members expect three things from their credit union’s credit card loyalty programs:
Personalization (“You should know me by now”) According to the Bond Loyalty Report, a typical consumer holds an average of 14.8 memberships with various organizations and institutions but are only active with 6.7 of them – indicative of a mismatch between what’s offered and what consumers want. Furthermore, only two in 10 are very satisfied with the level of personalization provided by their current programs. Credit unions are sitting on an enormous amount of cardholder data that, if used properly, gives the organization the ability to personalize offerings to the individual member. Now is the time to replace the outdated catalog approach of loyalty programs with relevant offers that fit today’s lifestyles and provide a superior redemption experience.
Immediacy (“Don’t make me wait”) It’s time to say goodbye to the months- or years-long waiting time necessary to garner enough points for meaningful redemption, especially when companies raise the number of points required over time. According to Blackhawk, most consumers want to redeem their rewards well before they reach the $100 mark. Technology today allows consumers to use their points immediately at the point of sale, regardless of whether the transaction is in person or online. Connecting with consumers on their terms requires a new loyalty program model – one that integrates the company’s program into consumers’ regular routines and meets their expectations for quick and easy redemption.
Ease of redemption (“Don’t make me jump through hoops to redeem”) Members want frictionless redemption experiences – less effort for more timely rewards. This experience needs to be one that’s simple, provides immediate gratification and takes the burden of redemption off the backs of cardholders.
Relaunching your loyalty program
Fully utilizing the data you have on hand will allow you to craft an offering that can help the individual consumer. Develop your cards to provide benefits and give actionable rewards that you know members will enjoy and use frequently. Also, if possible, partner with a technology company that takes the burden off your shoulders. Technology providers are usually full-service partners that can do everything for your loyalty program, including using the data at hand to customize your program while guarding both your organization and its customer’s data from would be fraudsters.
Throughout the last year, so many businesses have had to adapt in order to stay relevant and capitalize on any opportunity in front of them. By intelligently integrating loyalty points into the regular transaction process, credit unions can provide cardholders with the solutions they want and differentiate themselves by keeping their loyalty program front and center in their members’ minds.
