As the economy opens back up, credit card spending is beginning to reach pre-pandemic levels. Now is a good time to re-evaluate the strength of your own credit program. Since 42% of cardholders use their credit cards to earn rewards (Experian), an effective rewards program can be a significant motivator to make your card top-of-wallet for members.
In today’s digital age, consumers are used to customized offerings and giving direct input into the creation of services and products. They also expect comprehensive service that supports their personal goals. By focusing on these key expectations, your credit union can unlock the potential of both its credit program and member relationships.
- Well-timed, Customized Rewards – These are essential to satisfying cardholders and attracting new applicants. Timing is essential. Special offers for initial card use encourage card activation. Seasonal rewards, for example travel, can bring mutual benefits. With travel costs currently increasing, your credit union’s rewards program provides a great opportunity for members to maximize their value and for you to continue building brand loyalty. Travel expense purchases also tend to be higher interchange-generating categories, which boost your non-interest income.
- Communication and Engagement – Knowing what rewards fit members’ spending habits and priorities help with creating effective strategies. The best way to find out what your members want is to ask them. Email survey requests, strike up a conversation on social media or even in person, hold a drawing and add the question to the entry slip. Encourage members to share their questions in all your communications.
- Education and Support – Over half of participants in one survey on Experian indicated they did not feel totally satisfied with their credit card program and didn’t know what card would work best for their needs. Clear communication about the benefits and details of your reward promotions along with tips for making the most of credit card use can help increase satisfaction. Likewise, informative articles and videos can answer commonly asked questions and give tips for managing credit well. Online matching tools, apps to help build credit, and clear information about the qualifications for your own credit program and rewards can help people feel confident about applying for a new card.
When used together, these three key tactics can open the door for greater opportunities to grow your rewards program and member loyalty. Once you know how members use their cards and why, you can create the rewards programs they want while providing clear guidance to members about what they can expect from their credit rewards. You can even segment communications like emails to highlight information specific to what your individual members want to know.
Creating a successful credit rewards strategy involves significant work and time, but can bring great return in both short-term financial yields and long-term member loyalty. At LSC, we’re here to help ease the burden of building a strong rewards strategy for your credit union. Contact us at 1-800-942-7124 to learn more.