The Importance of the Redemption Experience
Financial institutions are competing for both the acquisition and retention of cardholders, and loyalty programs are one of the most popular tactics being deployed by many banks and credit unions to stand out. If loyalty rewards is one of the strategies your credit union is leveraging, delivering a positive rewards redemption experience that aligns with modern cardholders’ digital expectations is key to building brand loyalty and long-term relationships with your members. Today’s cardholder wants freedom of choice and an easy and quick redemption experience. Deliver on this aspect, and you will improve the likelihood that your cardholders will stay engaged and explore other services your financial institution offers.
At their core, loyalty and rewards programs are designed to incentivize behavior. They are built on the idea that positive reinforcement will encourage cardholders to repeat rewarded behaviors, and for credit unions, this means repeat purchases with their rewards debit and/or credit card. A well-designed and executed loyalty program can create a life-long member…or it can end the relationship and run the risk of negative word-of-mouth. Explore three key ways to deliver a redemption experience that will make your cardholders members for life.
Offer Real-Time Rewards
The fastest and easiest way to redeem is to use rewards without the inconvenience of logging into a dedicated rewards website. Real-time rewards are the simplest redemption category in the market currently, and they provide cardholders with immediacy and relevancy. Depending on the program, real-time rewards either prompt the cardholder on the POS system directly and convert their points into a discount at checkout, or they send the cardholder an email or text message asking if they would like to use their points right after the sale to receive a statement credit for their purchase. Discounts and statement credits delivered to cardholders on the recent purchased items, offering an unprecedented, customized redemption experience. It also reminds the member of their relationship with your credit union and builds loyalty, all while creating a redemption loop encouraging card usage to earn points so they can use those points in cash-like ways.
Digital Integrations
Members are more likely to engage with your loyalty program if your credit union uses modern technology and integrations to deliver seamless access. However, according to Finalytics.ai, many leading credit unions are struggling to deliver digital experiences that align with cardholder demands. “Based on analysis of the Top 100 credit unions, the average user experience score comes in at 2.31 out of 5.” Taking advantage of the opportunity to use single sign-on (SSO) with your loyalty provider to improve access to the rewards site. SSO also adds security and builds trust as the integration and consistent branding safe navigation to the cardholder. Utilize mobile app integrations if possible to make accessing your credit union and loyalty program easy for on-the-go members. Finally, make sure your credit union allows integration with digital wallets. Digital wallet access makes online and in-store transactions easier, drives top-of-wallet status, and delivers a convenient and seamless experience to members.
Offer Several Redemption Options
According to Wise Marketer, in many cases, the value of the loyalty program is defined more often by the variety of rewards available not the actual value of the offers delivered. It is difficult to please everyone. Your member demographics likely represent different ages, genders, geographical locations, and more. One of the best ways to ensure your members find value in your loyalty program’s redemption offerings is to offer a variety of choices in your redemption catalog. Offering a mix of classic rewards (cash back, gift cards, travel, event tickets, and merchandise), real-time rewards, and wealth rewards like cryptocurrency or stock ensures there is a redemption option of interest for all your members.
Credit unions can improve their ability to compete in the acquisition and retention of cardholders by designing their loyalty programs to deliver positive experiences that incentivize members to use their debit or credit rewards card and engage with the rewards program. A well-designed and executed loyalty program can deliver surprise and delight experience to your members and create life-long members. For more information on loyalty programs and opportunities to enhance cardholder engagement, follow ampliFI Loyalty Solutions on LinkedIn