3 key ingredients for a strong rewards program
Did you know that 88% of consumers view rewards as a top priority when choosing where to bank1? In fact, nearly two thirds of consumers are willing to increase wallet share to take part in banking rewards programs2. Since megabanks have cut back on their rewards programs after the Durbin Amendment in 20113, the timing is perfect for community financial institutions to answer the call.
When choosing a rewards program for your institution, it’s important to keep three things in mind:
- Put Cardholders First
Companies like Amazon are changing the game. If I wanted, I could have microwave popcorn delivered to me in an hour thanks to their Prime Now service, that’s now available on the web4. Yes, it’s impractical to send out for delivery just for a box of popcorn, but for consumers, it’s just the beginning of what can easily be ordered online and delivered to your door almost instantly.
For today’s consumers, instant gratification is crucial. The same principle applies to rewards programs.
With a strong rewards program, users should easily be able to access and track their reward progress from any device. In addition, points should be earned quickly or in real-time, so cardholders aren’t waiting to receive rewards. Since smaller, community financial intuitions are already able to develop more personal relationships with their cardholders than megabanks, this one’s a no-brainer.
- Give the Right Rewards
The average American is enrolled in 29 loyalty programs, but is only active in 12 of them5. It’s clear, traditional rewards programs don’t stand out. Providing discounts to name-brand stores is typical. Since community financial institutions already have easy access to the local communities where their cardholders live and work, it makes sense for them to offer something that the megabanks can’t: local rewards.
Not only will a “bank local, buy local” rewards model entice consumers, but adding these personal touches will boost goodwill in the community while opening the lines of communication between community financial institutions and local business owners.
- Make it Easy
We’ve already established that instant gratification is key, and that applies to the reward redemption process as well.
Kill the expiration dates and the fine print that tarnish the customer experience. Rewards programs that count on “breakage,” when consumers don’t redeem their rewards in order to show profit, can ultimately harm your brand.
A successful rewards program should actively encourage redemptions, satisfying the consumer’s needs as soon as possible. Not only will this help to increase consumer transaction volume, but this will ultimately provide data and insight into your local market.
Want even more insight into what it takes to create a strong rewards program for your institution? Check out the latest whitepaper from Buzz Points, “The Four Pillars of a Successful Rewards Program,” to help ensure you choose a rewards program that is, in fact, rewarding.
Download the free white paper here.
References:
1 http://www.wsj.com/articles/consumers-say-more-rewards-is-their-top-demand-from-banks-1407522160
3 http://www.cutimes.com/2016/01/22/credit-unions-revive-debit-rewards?&slreturn=1462311053
4 http://www.pcmag.com/news/344211/amazon-prime-now-one-hour-delivery-now-lives-on-web
5 https://www.colloquy.com/latest-news/2015-colloquy-loyalty-census/
