As a credit union, you are community-minded and enjoy much tighter relationships with members than most banks have with their customers.
While members are engaged by your friendly branch atmosphere and great rates on auto loans and mortgages, when it comes to your card portfolio the competition can be tough.
Thinking local – and rewarding local – is a great way to engage members, and motivate them to reach for your card at checkout.
“The credit card industry is extremely competitive today, and credit unions have to play to their strengths to succeed,” said Andrew Gates, CEO, Azigo, Inc. “Big banks continue to have a reputation for being stodgy and impersonal. But as a credit union, ‘local’ is a brand position you own – and your community ties serve as a great point of differentiation.”
Constructing a Program That Serves the Community Well
Even though your local rewards program is primarily there to inspire cardholder loyalty, Gates reminds credit unions to keep it focused on serving member and community interests.
“It is important to be genuine,” he said. “If you are making a sincere effort to build a program that improves the community, everything else will fall into place.”
The most effective local rewards programs, he adds, really do strengthen the ties between the credit union, local businesses and the community.
“Local rewards speak to members in a very unique and meaningful way,” he said. “We all want to see our communities thrive, and we take pride in supporting local businesses. There really isn’t another incentive you could provide members that has the same emotional appeal.”
For best results, Gates recommends keeping program logistics as simple as possible. “Members need to be able to easily earn, track and redeem points with merchants,” he said. “Make it easy for local businesses to participate as well. Signing up should require them to answer just a few basic questions by email or on your website.”
Engaging Local Businesses
He notes that there are several ways credit unions can incorporate local merchants into their programs. “The best way to start is by offering double or triple points to members that spend with them,” he said, adding that businesses should also be invited to provide redemption options, such as product discounts to your member cardholders.
To get the word out to local businesses, Gates advises credit unions to emphasize how your program will benefit them.
“There is no need to be heavy handed with your marketing outreach,” he said. “Let the surrounding business community know the program is there – and then let it grow organically. Remember that you have the trust of the community members they are trying to reach, and being a part of your loyalty program allows them to ride on your coattails a bit.”
Holding Events That Bring People Together
Once on board, Gates suggests holding co-sponsored events with participating businesses.
“Host an auction night for rewards members only, allowing them to spend points on prizes provided by local merchants,” he said. “These types of gatherings can open up public relations opportunities as well. Invite the community newspaper to cover it, and post event photos on social media to thank members for attending.”
Generating Employee Enthusiasm
Gates also encourages credit unions to rally employees around the program. “Rewards programs should be fun, and should reflect your credit union’s personality,” he said. “If the people sitting around the credit union conference table come up with a great idea, let them run with it. Employees should be involved in the program, proud of it, and talking it up with members.”
He adds that championing local causes can make the program even more impactful.
“Give members the option to donate points to a local charity, school or senior center – or to support your credit union’s ‘Race for the Cure’ team,” he said. “Ultimately, local cache is your reward for cultivating member relationships well. So get inspired, be creative, keep it personal – and watch your program take off.”
See what four key strategies can grow your card program and your overall brand by downloading our eBook below.
The post Rewards with Local Cache – Why the Path to Cardholder Loyalty Starts on Main Street appeared first on Insight Vault.