BY ELIZABETH ROWE
With so many rewards programs for consumers to choose from, credit unions are facing a new conundrum. How can your CU reimagine its loyalty offerings to remain keenly relevant and attractive to your members? Read on to find out how customized loyalty strategies are the key.
Loyalty, as a stimulator of member acquisition and repeat business, is the next big thing. While it may seem it has always been a bedrock strategy to pique new member interest and then stimulate repeat engagement after onboarding, our industry seems to be shirking the necessity of infusing loyalty throughout the full range of our members’ interactions with our institutions. Certainly most of the biggest, most recent hoopla in the world of payments has been around mobile. But without a robust loyalty strategy, we subsume our brands to handset manufacturers and operating systems rather than develop (and then redevelop) the critical loyalty offerings that can give us relevancy and centrality in the member experience.
Then and Now
This is the first time financial services institutions have dealt with vendors actively working to usurp the primary relationship we have with our members. Imagine if in the 1980s, NCR had run a huge marketing campaign telling consumers to always look for one of their trustworthy ATMs. Or if International Vault had launched a B2C campaign telling consumers to entrust their valuables only to institutions offering their vaults.
But that is what we are dealing with now – the very kinds of firms that would have white-labeled their consumer- facing products and worked exclusively as B2B vendors just five to 10 years ago are now selling directly to consumers and merchants.
And we have been complicit in turning over some of the heavy lifting to those vendors that now promote their brands rather than our brands. But after years of forfeiting primacy (and brand awareness) in member relationships as we have pursued lowest-cost delivery channels, many in our industry are evaluating strategies to recreate the centrality of credit unions in the member experience by asking: How can we differentiate ourselves? How can we make ourselves the first and only provider for payment products and channels?
The first step is a refresh of our use of loyalty and rewards programs.