3 minutes
Rewards must speak to your brand.
Sponsored by CO-OP Financial Services
Research shows that the majority of consumers prefer to do business with brands that offer rewards. And for credit card issuers today, rewards are nothing short of a make-or-break equation.
According to the 2018 Bond Brand Loyalty Report, rewards significantly influence consumer behavior and brand relationships. 63% of consumers surveyed modify when and where they spend to maximize loyalty points, 70% said they are more likely to do business with a brand offering rewards, and 70% are more likely to recommend brands with good loyalty programs.
Card loyalty programs are a must for credit unions; however, designing an effective rewards program requires a unique approach that speaks to your brand.
Here are four proven rewards strategies to drive rewards program success:
1. Include seasonal offers.
As a general rule, it is best to design a rewards program that is simple and predictable, so members understand how it works and know what to expect.
Seasonal offers such as summer travel vouchers, holiday spend incentives and Super Bowl promotions work well because they occur year after year and are thereby easy to remember.
2. Reward in tiers.
Members who have multiple accounts or transact daily should receive better offers than less active cardholders.
To that point, consider setting up your rewards programs in tiers, a strategy that has worked well for the airline industry. For example, cardholders who use their cards only occasionally might receive one incentive for transacting five times a month—and a better one for 10 transactions.
Offering premium reward levels, such as silver and gold, gives your top cardholders both a goal to reach and recognition for reaching it. Interestingly, rewards programs have become so popular with consumers, many will pay for additional perks and status. The 2018 Bond Loyalty Report shows that a full “37% of customers are willing to pay a fee for an enhanced tier of membership in their loyalty programs.”
3. Brand the card itself.
This practice is critically important, yet often overlooked. Your card is what members are pulling out of their wallets every time they transact. It is a walking billboard for your credit union and adds to the experience of the member. Your cards should reflect your credit union’s brand, using bold colors so that they stand out in the members’ wallet.
4. Engage local businesses in the program.
Local merchant-funded rewards are also important to offer, as they reinforce your credit union’s ties throughout the community and differentiate your card from those offered by large banks.
To encourage participation, make it easy for local businesses to join your program and be sure to emphasize how your program will benefit these businesses. Your credit union has the trust of the community members these businesses trying to reach—and being associated with you through your loyalty program allows them to benefit from that relationship.
The most important part of a successful credit card rewards program is having the right strategy and analytics framework in place. That is what CO-OP’s SmartGrowth team specializes in—we leverage data analytics, customized marketing campaigns and ongoing optimization strategies to help credit unions grow their card portfolios.
Deb Wieczorek is VP/strategic advisory and portfolio growth at CUES Supplier member CO-OP Financial Services, Rancho Cucamonga, California. Learn more about CO-OP SmartGrowth Consultant Services and download our latest whitepaper, “How to Succeed in the Credit Card Business: A Blueprint for Credit Unions.”
