Traditional cash back is a popular redemption option in a loyalty program amongst cardholders, but as a financial institution, it can be a more expensive option versus other redemption opportunities because it can impact your revenue. The point-to-dollar ratio for each redemption option can vary based on point earning and redemption value, and delivering high perceived value for low monetary value can help you to maximize your revenue while delivering an exceptional loyalty experience. Our loyalty experts have collected four tips to drive cardholder redemptions away from traditional cash back redemptions to cash-like alternatives to help your financial institution’s bottom line to grow.
Inform Cardholders About Their Options
Continual marketing to cardholders to inform and educate about redemption options will remind them of the flexibility you are providing with alternative ways to redeem their points. By creating and launching an awareness campaign in a time frame that aligns with a cardholder’s needs and wants, your financial institution can influence the cardholder during the decision making journey of how to redeem their points. In return, your financial institution can see higher engagement rates and higher portfolio revenue.
Our Recommendation: Create a section in the cardholder’s monthly statement that features the most popular and engaging redemption options, while also educating your cardholders on the vast quantity of options they have to redeem their points.
Deliver Quality Real-Time Rewards
Offering the opportunity to redeem rewards in real-time drives cardholder redemptions for options perceived as cash-like to the cardholder and valued by the financial institution, making it a win-win scenario. Using real-time rewards, such as ampliFI’s Pay With Points and Fuel With Points solutions, the financial institution can offer easy-to-use solutions to redeem points for instant usage. For example, with ampliFI’s Pay With Points real-time rewards option, cardholders can cover the cost of purchases with their points on their statement, reducing the amount that they owe.
Our Recommendation: Build a real-time redemption suite into your loyalty program, allowing for cardholders to instantly redeem points for rewards. Just like cash back can be used as statement credit, ampliFI’s Pay With Points and Fuel With Points options allow for cardholders to redeem points to cover the cost of their transaction or to gain discounts at the pump, giving them surprise and delight when they are notified that this is an option.
Show Value in Traditional Rewards
Cardholders often perceive traditional rewards, such as gift cards and travel benefits, as lower valued versus cash back and high value rewards. Cardholder interests and needs drive their perceived value, and financial institutions have the ability to promote and market different redemption options based on cardholder redemption history and category spend. For example, if a cardholder’s account shows significant spending in travel, they may highly value travel rewards, so promoting the purchase of airline miles for points or travel gift cards can help drive higher cardholder redemptions for lower monetary value.
Our Recommendation: Take the time to understand what spending categories and redemption options are most popular among your cardholders, and create marketing campaigns that drive them to redeem points in those categories, such as local and national merchant gift cards, travel excursions, new headphones and more.
Encourage Aspirational Rewards with Wish Lists
Help your cardholders work toward a bigger goal by guiding them toward alternative reward options by promoting wish lists on the rewards website. By creating a wish list featuring desired rewards, they are encouraged to save their points to work toward a greater points value for a larger reward item. In turn, cardholders are encouraged to spend to reach that goal faster and achieve that aspirational reward for their engagement and spending behavior.
Our Recommendation: Give your cardholders the option to redeem points for more luxury reward purchases, such as Apple products or designer brand items. As the financial institution, you have control to determine the point-to-dollar value of the redemption categories, allowing for cardholders to save points for items that are highly desired.
Creating a holistic loyalty program to deliver high perceived value to your cardholders can be difficult when each individual has different needs and wants. Our experts feel that flexibility and a wide selection of redemption options will provide the most success for your program, and in turn will drive higher spend and increased revenue to your portfolio. By analyzing your cardholder data and targeting them through quality marketing, your financial institution can help deliver rewards that they love while maintaining and growing your portfolio revenue.
Interested in driving loyalty and engagement with cardholders through a diverse loyalty program? Let our experts help! Explore our full suite of loyalty solutions at amplifloyalty.com or schedule a demo today to learn more at email@example.com.