A holistic loyalty program gives cardholders more benefits from the products they already use.
It's no doubt that loyalty programs are essential to customer retention and satisfaction. But what should you do if your traditional loyalty program isn't delivering the same results it used to? Banks and issuers should broaden their view of loyalty and look to relationship rewards as a new way of engaging with their customers.
Seamlessness Creates Sticky Customer Relationships
With relationship rewards, customers can enroll multiple accounts into a single loyalty program--whether the account is for a credit card, savings account, or mortgage. Then they can watch their points accrue all in one place, and you can become their primary bank of choice. This provides a significant advantage to customers, as they have more chances to earn points and offers. It also encourages customers to overcome commonly perceived weaknesses of loyalty programs, whether it's unachievable milestones or confusing offerings. When customers see their combined points stack up, it also demonstrates the value of signing up for more services, such as adding a business credit card or opening a checking account.
Not only do customers love the flexibility of earning points from a variety of transactions, it helps your products become stickier. According to research conducted by Mastercard, customers who are members of a relationship rewards program tend to make greater use of the products they have with their bank, the more products they have.
Invest in Connecting Fragmented Systems
While many banks realize the benefits of relationship rewards, many don't overcome the complex integration processes this type of program requires. A successful relationship rewards program depends on unified data sources, key performance indicators (KPIs), communication channels, and customer identifiers.
In terms of data integration, understanding the customer is easier said than done. A debit card customer might receive an email offer for a new credit card, compare products online, then call a 1-800 number for additional information. This represents the all-too-common challenge of useful customer insights becoming siloed in different departments. Similarly, each business line has different KPIs that a successful relationship rewards program needs to capture. For example, a credit department may want more revolvers than transactors whereas a debit department aims to increase deposits. The same divide often exists in communications channels and other internal systems that will serve as the critical foundation of any relationship rewards program.
Though integration is challenging, now is the time to act. Going forward, fragmented systems will only become an increasingly significant hurdle. If you can offer seamless experiences and centralized touchpoints—including a relationship rewards program—customers will reward you with their long-term loyalty.
Go Small for Big Picture Results
If you've done your research and you're ready to bring relationship rewards to your customers, business experimentation can help determine the features and offers that resonate most with your customers. Taking a test-and-learn approach analyzes the incremental impact of campaigns across segments and provides more insight than purely tracking portfolio performance or redemption rates as a whole.
This strategy also gives banks and issuers the freedom to test potential loyalty program features with smaller segments to quickly see which offers are getting the most engagement and which ones are missing the mark.
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