?By: Annie Cox, Vice President, Loyalty Solutions
As cardholder spending preferences have drastically changed during the COVID-19 pandemic, flexibility is more important than ever to ensure your financial institution’s loyalty programs are evolving with your customers’ needs. With many saving instead of spending, while traveling and dining less frequently, providing expanded rewards opportunities to make customers’ everyday lives easier is key for setting your financial institution apart – both in these uncertain times and in the future.
A recent Javelin Strategy & Research report, The Evolution of Loyalty and Rewards, shows that while some rewards programs are less significant during economic downturns, cash back remains relevant and important to cardholders during financial hardships. Historically, some of the most popular types of programs have been centered on travel, dining out, and spending—all things that are suffering from the impact of COVID-19.
It is important to keep in mind that consumer spending scenarios will continue to change through the remainder of 2020, which translates into shifts in rewards preferences under different spend categories – which is why giving your customers more choices in their reward redemptions will help maximize their earning potential while strengthening brand loyalty for your financial institution.
Top Reward Programs Less Relevant During Economic Hardships
Figure 2. Reward Program Memberships, All Consumers
Source: Javelin Strategy & Research, 2020
Presenting Relevant Opportunities to Drive Engagement
Making it simple for your customers to earn meaningful rewards faster is critical for a successful loyalty rewards program. Accomplishing this involves offering multiple redemption options in spend categories that align with your customers’ lifestyle needs and goals, while giving them control of their experience. Here are some tips for keeping your financial institution’s rewards programs relevant and engaging – and your customers transacting.
- Provide versatile redemption options, including online shopping, point of sale, gift cards, points to cash and purchase rebates.
- Track trends in customer engagement with your rewards programs. Leverage your program data to understand your customers, segmenting and targeting your messaging with relevant offers.
- Effectively communicate the value and benefits of your loyalty program to your customers that will inspire them to use their cards.
- Consider launching a marketing campaign/sweepstakes to incentivize spending.
Loyalty is an investment, not an expense. Growth happens with the right loyalty rewards program, as customers experience a stronger connection to your brand and use more of your services more frequently. When you expand the opportunities to reward your customers faster and easier, you will build their trust and retain their loyalty in these challenging times and for years to come.
Annie Cox, CCUE, CUDE, is vice president of Loyalty Solutions. In this role, she manages a suite of growth solutions including Rewards, Loyalty Enterprise Rewards and Merchant Funded Rewards programs, helping financial institutions define growth strategies. Prior to managing Loyalty Solutions, Cox was a member of the New Product Development team. In previous roles, she specialized in education and growth initiatives in the financial services industry.
