Ensure long-term customer loyalty with a seamless rollout of your rewards offerings
Rewards programs may be an effective way to acquire new cardholders, but winning their long-term loyalty can be another matter entirely. While finding real solutions to that problem can be a challenge, understanding its root cause is fairly simple.
Consumers frequently cite rewards as an important factor when choosing a credit card, but many never redeem them. That means for whatever reason, customers aren't always getting what they want out of a rewards program. When planning a new rewards program or credit card rollout, issuers should be aware of the discrepancy between what they think consumers want, and what they actually utilize. That gap could be the difference between simply attracting customers and actually retaining them.
Why Digital Rewards?
Digital delivery comes down to simplifying processes, lowering redemption hurdles and removing friction from customer interactions. Consumers have become accustomed to digital self-service through their experiences with mobile apps and online retailing. For a loyalty program, offering the ability to accrue, track and redeem points, cash back or miles in real time is no longer a distinction — it's an expectation.
In a recent Mastercard Rewards Cardholder study that surveyed over 5,000 consumers, nearly seven in 10 people (69%) said they would likely redeem rewards at the moment of purchase if the option were available. Because digital interactions are fast and easy, they drive more frequent redemption and encourage customers to keep reaching for the card that gives them the most value.
Leverage these three best practices when planning a digital loyalty program.
1. Design for Unified Commerce
It's crucial to meet cardholders' high expectations for a seamless experience. Make it easy for customers to interact with the rewards program anywhere, anytime and through any touchpoint. Begin with an understanding of the end consumer and design an intuitive flow to minimize friction and maximize consistency across multiple digital channels, including email, text, app and POS.
2. Apply Data-Driven Insights
One of the distinct advantages of an integrated digital reward program is the ability to capture comprehensive data insights across different forms of cardholder interaction. This wealth of information will allow you to leverage a robust, data-driven approach to optimizing your loyalty program.
Monitor your program's success by tracking key performance indicators (KPIs) like transaction frequency, reward redemptions and especially the rate of sign-up bonus redemptions. Establish benchmarks based on industry comparisons and monitor customer acquisition trends as the program progresses. Test varying terms and offers. Learn from the results. Adjust. Repeat.
All of these strategies will help you drive increased redemption rates. While not every revelation will be actionable, taking a test-and-learn approach will help reveal unexpected paths to program success.
3. Focus on Operational Excellence
Like any broad consumer initiative, perfecting your digital rewards program will require ongoing coordination between marketing, product development, IT, finance, operations and management. Since each group of stakeholders will need a view into ongoing program performance and upgrades, report queries or email won't cut it for a program of this scope. Central data management is necessary to enable ongoing monitoring across divisions and provide a single version of the truth.
As loyalty programs become increasingly complex, many organizations are relying on external providers for their expertise. Loyalty experts can provide end-to-end support, including program design, implementation and marketing.
The Rewards of Great Rewards
Rewards and bonus offers have become table stakes in customer acquisition. Continue to nurture loyalty with a digital-first program that delivers seamless, frictionless and attainable reward redemption.
Rewards are just the beginning. When you invest time and effort in a digital-first loyalty program, you can turn happy cardholders into customers for life.
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