Loyalty programs have become a cornerstone of consumer engagement strategies for banks and credit unions, offering a pathway to enhanced consumer engagement, retention, and revenue growth. Budgeting for a loyalty program requires careful planning and strategic investment to ensure it delivers the desired returns.

In this blog, we’ll delve into four essential aspects of planning for a loyalty program, providing insights and tips to help you maximize your investment.

Understanding Loyalty Program Operations

At the heart of any successful loyalty program are its operations. This encompasses everything from the program’s structure and the rewards currency used to financing rewards and managing promotions. Effective program operations are designed to generate a positive return on investment by engaging and retaining consumers while meeting the institution’s financial needs. Key Components of Program Operations include:

  • Program Structure: Define your program’s tiers, benefits, and rules. A clear structure helps consumers understand how to earn and redeem rewards and allows you to determine the cost per point and value per point.
  • Rewards Currency: Choose a rewards currency that is appealing and easy to understand. This could be points, cashback, or a combination.  Consider your base earning levels, as well as any promotions and campaigns to drive usage and keep your card top of wallet.
  • Unique Offers and Promotions: Offer compelling card-linked offers and promotions to keep consumers engaged and attract new participants.
  • Acquisition and Retention: Develop strategies to acquire new consumers and retain existing ones through targeted campaigns, personalized offers, and compelling rewards offerings.
  • Reliable Partner: Planning for a successful loyalty program includes securing a solid vendor partner who provides you with the necessary tools to keep your pulse on the financial details of your program.

ampliFI’s customizable programs ensure the loyalty program meets the needs of both your institution and cardholders. For instance, solutions like Pay With Points allow financial institutions to offer lower point values for certain redemptions, which cardholders still find convenient. This approach boosts engagement, spending, and retention while reducing costs compared to traditional cashback redemptions.

Planning for a Loyalty Program: A Guide for Bank and Credit Union Leaders

Reviewing Existing Loyalty Program Contracts

For institutions with a loyalty program, it’s necessary to regularly review your contract to determine if the program maintains alignment with your institution’s short- and long-term goals. Here are some items we recommend looking for:

  • Co-terminous Agreements: Is your contract aligned with processing agreements like debit, credit, and ATM services? What about your brand and core/software agreements? Identifying these connections is crucial for seamless operations.
  • Notification Requirements: Know the official notification period for non-renewal. Are there auto-renewal or auto-rollover terms? Understanding these aspects prevents unwanted surprises.
  • Termination Fees: Examine the details of early termination fees, points buyouts, and penalties. Be prepared for any potential deconversion fees and negotiate terms wisely.

Take the time to carefully read the entire loyalty program contract, and review it more than once if necessary. If you encounter any sections you don’t fully comprehend, don’t hesitate to ask for clarification. This can save you time and money in the long run.

Estimating Rewards and Incentives Costs

A successful loyalty program will boost consumer engagement, drive revenue, and expand the program’s reach. Therefore, it’s crucial to approach this investment with a strategic mindset. Without a well-thought-out rewards scheme, the program may appear as a cost center, making it harder to justify the budget. 

Here are some of the year-over-year returns ampliFI clients saw in 2023:

  • $733 million in interchange revenue generated.
  • 5.4% increase in loyalty point accumulation by active credit account holders, indicating higher engagement and stronger loyalty.
  • 15% increase in point redemption activity, showing greater utilization of loyalty points and effectiveness in incentivizing spending and enhancing satisfaction.
  • 18% increase in consumer spending among new clients, showcasing the transformative impact of loyalty programs on revenue and relationships.
  • 23% increase in transactions and a 15% rise in point redemption activity among new clients, demonstrating heightened engagement and participation.

ampliFI clients work with a client success manager to ensure the program remains relevant and creates positive returns. As subject matter experts, they are invaluable resources in helping navigate these challenges, providing insights and strategies to ensure the loyalty program thrives.

Marketing Your Loyalty Program

Marketing is a vital component of your loyalty program’s success. A well-allocated marketing budget ensures your consumers are aware of and excited about the program. Best practices include:

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  • Frequent Touchpoints: Communicate regularly to your cardholders to keep your loyalty program top-of-mind.
  • Ongoing Promotion: Continuously promote the program through various channels such as POS systems, websites, social media, and email campaigns.
  • Visible Branding: Keep your brand at the center of every interaction to strengthen the relationship between your institution and its consumers. 

Marketing efforts directly impact how well you communicate the program’s value, grow your membership base, and keep existing consumers engaged. ampliFI makes marketing your program easy in several ways:

  • Marketing Portal: Using self-serve, pre-designed templates and your financial institution’s branding, you can quickly and easily select and produce customized marketing materials for print and digital channels. 
  • Email Marketing: We deliver robust email marketing services customized to your institution’s brand, including loyalty onboarding journeys, pre- and post-launch communications, and promotion-specific emails. 
  • Branded Rewards Sites: Our rewards sites are customized to reflect your brand to maximize visibility in connection with the loyalty program’s value, creating an emotional link and strengthening the consumer relationship.

ampliFI Simplifies Loyalty Program Implementation

Implementing a successful loyalty program can be complex, but with the right partner, it becomes significantly easier. At ampliFI, we specialize in helping banks and credit unions design, launch, and manage effective loyalty programs. Our comprehensive solutions cover every aspect of loyalty program operations, from structuring and financing rewards to marketing and engagement strategies. With ampliFI, you can streamline the implementation process and ensure your loyalty program delivers maximum value, driving consumer loyalty and business growth.


Ready to kickstart your loyalty program? Connect with our team at sales@amplifiloyalty.com or click the link below to get started.

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