Loyalty programs are landing all around us – and some are more engaging to consumers than others. While rewards offerings themselves can vary widely from program to program, according to Andrew Gates, CEO of Azigo, Inc., there are a number of proven best practices every credit union should follow.
Implementing these strategies will keep your program on point, helping you realize the member enthusiasm, engagement and long-term loyalty your credit union is seeking.
- Get in the Game
Research by Rosetta reveals that engaged consumers buy 90 percent more frequently and spend 60 percent more per transaction. They also bring three times the value to a brand over the course of one year.
Plus, Gates adds, not having an effective loyalty program can put your entire card portfolio at risk. “Rewards cards are the industry standard, and the competition in this market is fierce,” he said. “You simply have to offer cardholders rewards in order to keep them from being lured away by competitors left and right.”
- It’s David Vs. Goliath – Think Like David
While the credit industry is dominated by the likes of Chase and Bank of America, Gates reminds credit unions that big banks don’t have all the advantages.
“David beat Goliath by leveraging his strengths,” said Gates. “For credit unions, this means cultivating your community ties.”
He advises credit unions to get local businesses involved in their loyalty programs. “Even if you don’t have a merchant-funded platform, there are ways to give local merchants access to your base that bring value to your members – and that drive card usage,” said Gates. “Promotions and events involving them that offer exclusive discounts to member cardholders can set you apart and also pave the way to future marketing opportunities.”
- Enroll, Reward and Consult Employees
Gates notes that program engagement – and assessment – should always start with your own employees.
“Make sure your employees carry your credit card, or at least have access to points through an employee incentive program,” he said, adding that the best program feedback – and new ideas – frequently come from within.
“So many times, we go into a room full of executives, and they start talking about what the program should look like, and what it should offer,” said Gates. “To get an accurate read on what works and what doesn’t, you need to venture outside the think tank and boardroom.”
He encourages credit unions to have employees report on their experiences with the program. “Find out what they like and dislike about other programs as well,” said Gates. “Their insights are valuable and just might surprise you.”
- Keep It Simple
According to Gates, many times when a program is first introduced, members are given clear guidelines on what a “point” equals.
“They know, for example, that they get one point for every dollar spent on their credit or one point for every two on debit transactions,” he said. “Then the impulse is to add complexity with things like double points for dining out and triple points for travel.”
Gates advises credit unions to make it interesting and have special promotions along these lines, but to keep the program relatively simple and straight forward.
“Seasonal promotions, such as summer travel vouchers and holiday spend incentives, ignite member engagement because they are so easy to remember,” he said. “Keep in mind that your goal is to say ‘thank you’ – you are not trying to trick anyone.”
- Your Best Members Deserve Better Rewards
Gates encourages credit unions to give their most engaged members more opportunities to earn points. “All members are not created equal,” he said. “Members that have multiple accounts and use your cards the most should receive additional rewards. And you can always set up two rewards programs. The airlines have their programs organized in tiers, and they have been very successful with that strategy.”
- Offer a Mobile App
Gates advises credit unions to make every effort to introduce a mobile app along with the program. “It goes without saying that your members are constantly on their smartphones,” he said. “You can always advance your mobile technology over time to enhance the member experience.”
- Success Takes Marketing, Marketing, and More Marketing
“I can’t emphasize this point enough,” said Gates. “The biggest mistake credit unions make is that they put points on a credit card and think they have a loyalty program. The loyalty program needs your staff, and particularly your marketing department, to rally around it on an ongoing basis.”
- Be the Kind of Organization That Inspires Member Loyalty
According to Accenture, 81% of consumers admit that it is frustrating to deal with a company that does not make it easy to do business with them.
“Be in the member service business at all times,” said Gates. “Make sure every connection you have with members is worthy of their loyalty – and then your rewards program becomes icing on the cake.”
He continued, “Ultimately, the best way to reward members for their loyalty is to give them your time, expertise and attention, and to help them realize their financial goals and dreams.”
Launch your loyalty program into the big leagues with our How-To Guide: Applying the Tactics of the World’s Best Loyalty Programs.
The original article 8 Winning Strategies for a Successful Credit Union Rewards Program can be found on Insight Vault.
