Practical Rewards That Drive Real Engagement: How Credit Unions Can Keep Members Loyal
In a world where financial services abound, traditional
banks, credit unions, and financial institutions are grappling with a loyalty
crisis. A Bain & Company report revealed that only 29% of
customers remain loyal to their primary bank. Several factors are driving this
erosion of loyalty: the surge in digital products and channels, fierce
competition from fintechs, and evolving customer expectations that are
reshaping the financial sector.
Another contributing factor is banks’ and credit unions’ ongoing struggle to differentiate their rewards programs, especially when traditional travel perks like flights and hotels have become standard offerings industry-wide.
When competitors—whether traditional banks, credit unions, neobanks, or fintech startups—offer a similar, uninspiring array of rewards, the question for members and customers becomes: why stay?
Credit unions often respond to this challenge with competitive rates and a shared mission—such as serving members of a military branch. However, these core strengths have limits. Larger banks frequently lure members away with a broader array of financial products, services, and rewards. To remain competitive, credit unions must rethink their approach to member retention and incentives, focusing on smart, value-driven rewards that deliver deeper engagement and long-term member satisfaction.
Driving Deeper Connections with Credit Union Members
One of those intelligent rewards categories is car rentals. According to Driving Loyalty: Market Insights on Car Rentals & Reward Programs, a recent CarTrawler report based on a survey of over 3,500 US consumers, car rentals are the third-most cited category respondents want to use their loyalty program points for, trailing only flights and hotels. The report also found that 60 million Americans rent a car annually – a significant market credit unions can tap into, if they make car rental booking and reward options available to their members.
Car rentals present a unique opportunity for credit unions to engage the 45% of consumers who say they are likely to rent cars through a loyalty program. Perhaps as importantly, a majority of loyalty members (88%) who rented a car through their program in the past year were willing to do so again. This indicates high satisfaction and strong potential for repeat engagement for credit union members who utilize car rental rewards.
Exceeding Members’ Expectations: Delivering Benefits and Rewards That Resonate
Offering car rental rewards may be a good start, but the real opportunity lies in making those rewards meaningful and relevant to members' lives. By focusing on everyday convenience and aligning with customer preferences, credit unions can create a loyalty experience that goes beyond the standard travel perks offered by most banks. Providing a diverse selection of valuable rewards not only incentivizes members to stay but also helps credit unions stand out in a crowded market. More importantly, offering rewards that truly resonate with members can help community institutions increase relevancy among their customer bases and differentiate themselves from other providers.
Members expect both rewards and redemption structures to be tailored and align with their personal preferences. According to the Driving Loyalty report, 63% of respondents regularly combine points and cash for redemptions, underscoring the demand for flexible payment options; credit unions can enhance loyalty by providing those flexibility and personalized perks, such as customized car rental offerings or exclusive benefits for frequent users.
For example, a credit union could make electric vehicle (EV) rental options more prominent for their under-50 members, who are nearly twice as likely to prefer this type of vehicle as older renters (55% to 27%, according to the Driving Loyalty report). Members-only discounts, simple booking processes, and transparent pricing can further enhance the member experience by reducing frustrations related to hidden fees or high costs. These tailored and thoughtful solutions are designed to improve satisfaction, encourage repeat engagement, and strengthen loyalty.
Providing Everyday Value
Car rentals also have relevance beyond the relatively infrequent periods when consumers are planning to travel. Almost a quarter (24%) of US car rentals are for non-travel-related purposes, such as moving, family visits, or weekend trips. Most of these rentals (63%) are picked up at local branches rather than airports, often in the heart of the communities served by credit unions.
These “everyday” car rentals provide a year-round engagement opportunity for credit unions, as members using their cards for these rentals can accumulate points, which often encourages additional spending on the card. Whether for short trips or daily errands, these rentals can become a consistent part of members' lives, making the loyalty program more relevant in their day-to-day activities, not just during vacations. With the right partnerships, credit unions can position themselves as go-to providers of their members' everyday mobility needs, improving loyalty and member retention rates while creating additional revenue streams.
Credit unions, like all financial institutions, are facing major loyalty challenges. The key to overcoming these lies in crafting rewards experiences that are engaging, meaningful, and, above all, undeniably valuable. Incorporating car rentals into their rewards programs, credit unions can deliver practical, everyday value that resonates with members. Car rental rewards promote frequent, relevant interactions, building satisfaction and loyalty in ways that standard rewards often fail to achieve. It’s a strategy credit unions can’t afford to overlook.
Download your free copy of the CarTrawler report, Driving Loyalty: Market Insights on Car Rentals & Reward Programs here.
Aleksander Kaczmarek, VP of Loyalty Partnerships, CarTrawler
Aleksander Kaczmarek has over 13 years of experience in loyalty, specialising in identifying, launching, and growing strategic partnerships across the travel, financial services, and retail sectors. He has previously held roles at IAG Loyalty (Avios) and Affinion International (CX Loyalty). Currently, Aleks serves as the VP of Loyalty at CarTrawler, the world’s leading B2B technology provider of car rental and mobility solutions to the global travel industry.