BY DWAYNE SPRADLIN
When it comes to loyalty programs, is your credit union in the minority of those that are actively used or the majority of those that are not? If your CU falls into the latter category, you may be investing a lot of time and money without much payoff. These four guidelines will help turn your rewards program around.
According to the 2015 Colloquy Customer Loyalty Census,1 the average American household maintains memberships in 29 loyalty programs.
However, the average American household is active in only 12 of those 29 programs. Businesses managing those 17 inactive programs lose time and money to keep them running, but every program should be increasing customer loyalty and generating revenue. In fact, successful rewards programs can drive increased purchasing behavior since current customers spend 33 percent more than new customers, on average.2
Banking rewards are no different. Eighty-eight percent of consumers deem rewards availability to be a top priority when choosing a financial institution,3 and nearly two-thirds of customers are willing to increase wallet share to participate in a banking rewards program.4 At the same time, fewer than one in five customers reports receiving rewards for their debit transactions,5 and fewer than half of all financial institutions currently offer debit rewards programs.6 As major financial institutions have curtailed their debit rewards offerings in recent years,7 the time is ripe for credit unions to seize the opportunity by building a loyalty program that stands out.
More organizations are offering banking rewards than ever before, from fintech startups to core providers and everyone in between. But when selecting partners, credit union leaders need to evaluate solutions that align with their service-oriented traditions and bring value to members and stakeholders throughout their communities.
Credit unions can use this guide to ensure their loyalty programs remain profitable while rewarding their members and the broader communities they serve.
Maximizing the Customer Experience
Despite new technology and non-traditional banks challenging existing banking models, credit unions have always held onto one unique advantage: superior customer service. Before implementing any rewards program, CUs should evaluate and identify solutions that put the member first. Credit unions understand their members and communities more intimately than larger institutions, so their loyalty programs should match the personalized service and knowledge offered in-branch.