In today’s progressive world of digital banking, brick-and-mortar locations are no longer a requirement and new generations of cardholders are drawn to digital platforms that simplify the financial process. This makes competition very high, resulting in the possibility of losing cardholders to other financial institutions that provide enhanced benefits that align with consumer demands.
Financial institutions can’t afford to lose existing members. As a result, they must find ways to retain and gain new members regularly to increase portfolio revenue and cardholder engagement. Our loyalty experts are sharing the top ways that financial institutions can stay competitive, retain customers and generate increased revenue through their loyalty programs in response to market demand and trends.
Encourage Local Cardholders With Quality Earning And Redemption Opportunities
Encourage Local Cardholders With Quality Earning And Redemption OpportunitiesIn a study conducted by PYMNTS.com, 55% of loyalty program users would be “very” or “extremely” interested in loyalty offerings from local merchants (PYMNTS.com, 2021). In the last two years, there has been a growing interest in shopping locally and sharing the wealth with small businesses, driving financial institutions to respond with more earning and redemption opportunities in their loyalty program. One way to offer this to cardholders is through local bonus point opportunities, rewarding cardholders for spending at local merchants, such as ampliFI’s card-linked offers. By giving your cardholders more opportunities to earn locally and engage with their community, they are motivated to not only utilize their rewards card more often, but also be retained as a cardholder instead of switching to an alternative financial institution.
Integrate With Digital Wallets For Cardless Purchases
As cardholders grow their online shopping habits as traditional stores make shopping more contactless, approximately 40% of digital wallet users say they would be “very” or “extremely” likely to leave their current financial institution in exchange for another if they gained greater rewards for shopping (PYMNTS.com, 2021). Although this trend is fairly new with the addition of Millennials and Gen Z to the market, they are trend drivers who are ultimately pushing for this to be an industry standard because these cardholders are significantly more likely to switch financial institutions in comparison to Gen X and Baby Boomers. With access to a digital wallet, it makes online and in-person purchases simpler without the need to have the card present at the time of purchase. As a result, cardholders are more likely to use the card often and maintain a relationship with their financial institution instead of switching to a competitor.
Target Your Cardholders With Unique Account And Card Options
Not all card and loyalty programs are created equal. Each generation, demographic and geographic location warrants different needs and wants, and it’s important for financial institutions to respond accordingly. By offering different types of options, your financial institution can tailor your rewards program for each account type to address targeted cardholder needs, such as real time rewards for cardholders or travel bonus points for frequent flyers. It’s important to hone in on your cardholder expectations and formulate a rewards program strategy that aligns with their lifestyle, resulting in higher cardholder delight, higher perceived value and long-term retention.
Fostering the right strategy to grow cardholder retention with your loyalty program is a crucial part to any effective long-term goal. With the shift in market demand, cardholders have more options in financial management and spending, but offering targeted and tailored loyalty and rewards programs can help drive cardholder growth and retention.
Looking for the right partner to drive cardholder engagement for your financial institution? Contact ampliFI’s loyalty experts to schedule your free consultation and demo, and learn more about how you can turn industry trends into the gold standard of banking.