Loyalty rewards and the psychology of payments
To compete effectively for members’ wallet share, credit unions must focus on increasing engagement and forging deeper connections. The formula for success starts with understanding your members’ needs, winning their attention, engaging them where they are, and repeating this cycle.
A recent study found that more than two-thirds of active cardholders in the U.S. use a card issued by a national bank as their primary card, compared with only 8.3% who received their primary card from a credit union. Yet more than a third of these national bank cardholders would be willing to switch to a card offered by a smaller institution, if it offered the right features.
Credit unions can acquire and deepen member relationships across all segments and categories of behavior by becoming more deeply embedded into transactional value streams and winning the primary financial interaction moment by moment. Per proprietary research captured in Co-op’s 2023 CU Growth Outlook Report, 45% of respondents cited engagement as the top reason for maintaining a primary relationship with their financial services provider.
Establishing an emotional bond is key. According to an oft-cited study of retail brands by Motista, emotionally connected consumers generated 306% higher lifetime value for a brand over those customers that were simply “satisfied.” Moreover, according to TransUnion, 80% of consumers would switch financial institutions for a better experience.
continue reading »
