Invest in cardholder loyalty rewards programs for long-term customer retention.
Many rewards program managers or card issuers view rewards programs as a cost — something to watch on the balance sheet. Yet cardholder loyalty programs are anything but a drag on the bottom line. In fact, the companies who reap the most benefits from their loyalty programs are the ones that treat them as an investment in long-term customer retention.
In the long run, loyalty programs forge stronger connections with consumers. They ultimately lead to acquiring new customers, while growing engagement with existing customers through more credit card transactions and higher spending. Rewarding customers for their allegiance to your card is an investment worth far more than the costs of the rewards themselves.
Differentiate Your Business
Don't underestimate how much of a competitive advantage a strong loyalty program can drive. Customers are eager to sign up for rewards programs — anyone can appreciate exclusive access to discounts and freebies, and special personalized treatment makes customers happy and motivates them to remain loyal in return. But, a cardholder loyalty program is only as strong as the effort behind it. If your program fails to satisfy the needs of your customers, they won't make it their top choice when it matters — at the time of purchase! Treat your program as a long-term investment and don't hesitate to give customers what they want, even as their preferences change.
In a world where customers are saturated with options, giving cardholders the freedom to choose when, where and how they spend their points will help guarantee long-term success. Mastercard's Pay with Rewards, for example, allows customers to redeem points within seconds of a purchase. That freedom has paid off: Customers who redeem spend three times more than non-redeemers, and issuers with a program have seen a 26% increase in transactions and a 10% gain in active cardholders. Customer spending also increased in several areas, including seven percent for grocers and restaurants, four percent in drugstores and three percent at gas stations. Flexibility is key to increasing program engagement and preventing attrition, as customers now prefer loyalty programs that offer them more transparency and control.
Renew Your Commitment to Your Customers
It's hard to find someone who doesn't love a reward. When customers recognize that you're providing attractive incentives as appreciation for their loyalty, they'll be more likely to keep your card top of wallet. Partnering with experts who can help you establish and manage a loyalty program gives you the ability to offer a wider array of products and services to customers. If your loyalty program hasn't been a priority, the opportunity to illustrate your commitment to customers is reason enough to renew and refocus the initiative.
As you'll quickly discover, investing in a cardholder loyalty program is a long-term investment in customer satisfaction and your bottom line. It's as simple as that.
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