If you haven’t updated your rewards program in a few years (or more), you probably aren’t giving – or getting – the kind of rewards you’re hoping for. The recently-released 2016 Bond Loyalty Report, which surveyed more than 19,000 U.S. and Canadian consumers, reveals that people have specific ideas about the rewards experience they want. And they aren’t necessarily getting it from the companies they patronize. Although the average consumer belongs to 13.4 rewards programs, they’re likely to be active in only 6.7.
Insight Vault caught up with Andrew Gates, CEO of Azigo – one of the loyalty solutions providers behind Member Rewards by CO-OP – to talk about some of the opportunities contained in this year’s Bond report. Listed below are five areas to focus on if you want to make your rewards program more rewarding.
1. Mobilize. According to Bond, 57 percent of members want to engage with rewards programs via their mobile devices; 70 percent find the idea of redeeming accumulated rewards instantly in store appealing, with 43 percent indicating they’d be willing to pay a premium to do so.
“You have to consider where your customers are interacting today,” said Gates. “They have to have full access to your rewards program through their phones – whether that’s through a standalone app or an integrated API in your mobile banking app.”
Worried that the cost is prohibitive? “We just made our site responsive, so that when a credit union links to or adds a rewards button to their app, the rewards site functions seamlessly on a mobile device,” said Gates. “We don’t charge you anything to do that, and the mobile app provider you use won’t charge as much as they would to integrate a full API.” In other words, explore your options.
Even if features like in-store redemption aren’t in your current lineup, they should be in your plans. “Paying with points when you’re at a merchant location, or receiving push notifications for special deals or merchant offers is a focus for CO-OP going into 2017,” said Gates.
2. Promote. Bond says: 49 percent of members don’t know whether their rewards program has an app. This is the tip of the iceberg. Members also may assume you don’t have a debit rewards program – or rewards with merchants they already love, or relationship rewards for using more than one product. The more you’ve improved your program, the more urgent it is to let members know.
3. Engage. Members won’t love your rewards program if they don’t use your rewards program. For some, this means a shift in perspective. “Nine out of 10 financial institutions will look at the ROI on their rewards programs by looking at hard ROI instead of the soft ROI of member engagement and happiness with the program,” said Gates. “They think that if only 25 percent of points get redeemed, that’s a win. That’s not a win; that’s a loss.”
Need proof? According to Bond, members who redeem are 2.5 times more satisfied than members who don’t. By contrast, non-redeemers are 2.3 times more likely to defect. All told, about a fifth of any program’s members have never made a redemption.
4. Recognize. In an interesting twist, encouraging members to reward themselves by issuing automatic redemptions may actually backfire. “While it sounds great to have 100 percent redemption, when you do it without having the member participate or take an active role, it doesn’t have the desired effect,” said Gates.
Instead, consider ways to encourage individual members to redeem. “For example,” said Gates, “what if during an interaction with them you asked whether they were aware they had a substantial number of unredeemed points? And even better, what if you could offer them a $10, $20 or $50 Amazon gift card right on the spot? That’s a way to recognize them personally for doing business with you, and surprise them with a reward.”
No surprise, though, that Bond reports program satisfaction is 2.7 times higher among members whose program representatives make them feel special and recognized. Personal interaction ups the ante, and helps cement the connection between rewards and loyalty.
5. Personalize. Recognizing your members’ individual behavior and preferences is a great opportunity to offer person-to-person interaction. But that’s just one facet of offering a personalized rewards program.
Using data to uncover member behavior and preferences – then looking for ways to promote the program elements and rewards your individual members might like best – is a sure way to boost awareness, participation, engagement and satisfaction. In fact, Bond reports that satisfaction is eight times higher for programs with high levels of personalization.
Upgrading your rewards program requires both effort and resources. But it doesn’t have to be costly: “Structured properly, even a generous rewards program doesn’t have to be a loss leader,” said Gates. “Depending on the robustness of your merchant-funded program, it can be low-cost or even revenue-generating.”
To learn more about Member Rewards by CO-OP, click here.
Editor’s Note: This post previously published on August 24, 2016.
For expert insights on card loyalty and rewards, view the premium content video from THINK 16:
“Driving Engagement, Delivering New Revenue & Developing Deeper Member Loyalty,” available exclusively from CO-OP Financial Services.