As the market becomes overwhelmed with rewards programs and options, credit unions need to take a step back and evaluate their existing programs to ensure it meets member expectation. Rewards program engagement is suffering due to competition and lack of basic insights by the member.
For a credit union rewards program to be affordable and sustainable while appealing to the member base, you need to evaluate the following options:
Leverage Data Effectively
In today’s environment, a “one size fits all” approach will not effectively engage your members. Member data and segment markets need to be evaluated based on cardholder preferences. Once cardholders are segmented, you can market to and reward members through highly-customized solutions. It’s ok to start small – segmentations don’t have to be detailed and complex. Start by evaluating purchasing patterns or household income to be able to offer something valuable to the member as an individual.
Generate Perceived Value
Successful programs have the least cost while generating the most perceived value. To identify this value, you must first have an insight into what your members find valuable. Consumers in general are always looking at ways to earn more rewards, so in turn you should customize your offering to your members’ unique needs. However, it’s easier said than done as you must apply your data to receive this valuable insight.
Have a Flexible Program
Operating against a constant change of preference, rewards programs must be flexible enough to adapt and change to reward members for new behaviors. The concept of “preferred financial institution” has changed, consumers have changed, and members have changed. Has your rewards program kept up with the change?
Keep It New and Interesting
I’m often asked how to keep an existing program “new”. The answer lies within your data. Having only cash back or only a rewards program isn’t enough to engage and grow your cardholder base. You must be prepared to not only offer a rewards program, but also continuously engage with them through different types of promotions and campaigns as a means to energize your program.
In a study done by KPMG, 80% of consumers get excited to find a new way to earn loyalty points. Always look for ways to remind your members of your rewards program and benefits, and offer special promotions to increase card utilization and member loyalty. Keep in mind, while most purchases are made online, they are made by a default card on file – so your goal is to keep your program energized to ensure your card is top of the default chain.
Partner with the Right Vendor
Work with your processor to identify how they can help you grow your program by offering different rewards promotions and campaigns. Most, if not all, card processors today have a strong marketing team to help credit unions expand and grow their cardholder base by offering different reward campaigns.
Data is only as good as the strategies you have in place. Take the time to evaluate your member base. That way you can utilize your insights to prepare actionable solutions designed to help you grow your cardholder base while creating loyal members who will consistently choose your card over others.