Today’s consumers must choose not only where to shop and what to buy, but also how to pay. Ever-evolving options from store cards to online channels have placed increasing importance on achieving top-of-wallet status.
With the entry of new payment options, Apple Pay and Android consumers are faced with new choices in an ever-changing landscape. For some companies, loyalty programs have become a powerful tool to influence consumers’ decisions about payment choice.
Below are four key ways credit unions can ensure their loyalty and rewards programs are keeping their cards top-of-mind and top-of-wallet for members:
Understand your Members
A 2019 PSCU study found that 75% of consumers receive a reward or benefit by making purchases with their credit card. Consumers are increasingly utilizing specific payment methods for particular transactions as they continue to focus on maximizing the returns from their loyalty memberships. Conducting research and leveraging data and analytics on the front end is essential to ensuring credit unions are targeting the right members with the right offerings.
Have a clearly defined value proposition for all program benefits and only market to members who benefit from each respective item. Targeting a member with marketing communications surrounding program benefits not relevant to him or her is not only ineffective, but it could also have a negative impact on the return on investment (ROI). For example, a member that does not own a car does not need a credit card that earns points or receives cash back on gas purchases.
Additionally, make sure to communicate your value in a clear and concise way. This needs to be repeatable and demonstrate a clear message to the consumer.
Measure and Optimize
Defining key performance indicators (KPIs) early on will help optimize programs and align decision making for desired outcomes. Most importantly, defining a narrow and specific goal for the program is essential. For example, creating a marketing program around brand awareness when your stated goal is to grow share of wallet with existing members could lead to misalignment and poor performance. Establishing a goal will help determine what types of programs to offer, as well as create benchmarks to compare and optimize against. Routinely reviewing metrics and realigning communications and keeping your end goal in mind when making all decisions about the program is key.
Keep up the Momentum
Once a member chooses to participate in a loyalty program, it is imperative for credit unions to consistently remind him or her of the value of the program. Consumers are notorious for short attention spans, and competition can quickly make your world class program obsolete. In fact, a LoyaltyOne study found the average consumer is enrolled in 29 loyalty programs. Communication about new offerings and reminders about current program offerings will ensure members not only take advantage of those features, but also keep the credit union card in top-of-wallet position.
Knowing you are not only vying against with competitors but the other roughly 29 loyalty programs a consumer is enrolled is just a reminder that you need to continually drive home the value you are bringing to your member.
By understanding your members, strategically determining targeting, clearly communicating value, setting KPIs and being diligent with respect to ongoing marketing and communications efforts, credit unions can ensure their loyalty programs are not only performing successfully, but that their cards are also top-of-wallet amongst members. With a growing marketplace, it is imperative that you continually follow up with your members to assess their current perspective.