Cash (Back) is Still King for Card Rewards Programs, Says J.D. Power Survey
Great news credit card issuers!
“It’s a really good time to be a credit card customer,” stated Jim Miller, Senior Director of the Banking Practice at J.D. Power when the research powerhouse released the fourth wave of its J.D. Power 2017 Credit Card Satisfaction Study.
“Overall satisfaction is up across the board, and growing numbers of card companies and regional banks are coming to the market with new products that offer rich sign-up bonuses, increased cash-back rewards and new benefits,” Miller added.
In fact, according to the study:
Cash (back) is king: Overall customer satisfaction with credit card issuers reaches its highest level in the history of the study (802 on a 1,000-point scale), but scores are highest for cards that provide cash-back rewards programs. By contrast, airline cards and store-branded Visa/MasterCard rewards credit cards have the lowest levels of satisfaction among rewards cards.
Moreover, while cash may be king, it’s not the only reward incentive issuers can use to capitalize on higher levels of satisfaction. J.D. Power emphasized the need for creativity. “The key for issuers in this highly competitive marketplace is to develop strategies that increase customer satisfaction, which, in turn, decrease attrition and promote higher levels of credit card spend,” Miller stated. Here are a few tips for credit-card issuers:
Analyze Transactions to Design Rewards Programs: Of course consumers like cold-hard cash. Yet you can offer different types of rewards, from flat cash-back percentage based on total spend, to different rates based on type of spend. Examine purchasing behavior looking at where, when and how cardholders use their cards to design programs more likely to drive usage.
Make It Easy to Understand: There’s a thin line between compelling and complicated. No one likes to feel duped. If you offer varying cash-back rates depending on types of purchases, be very clear on rules and limitations to avoid frustrating customers.
Monitor Programs and Make Adjustments: From offering special spending categories that rotate monthly (i.e., higher cash-back rate for restaurant purchases this month, grocery purchases the next) to more effective engagement with customers through creative digital and print communication, continue to examine and enhance your rewards program for ongoing success.
Want to learn how you can add loyalty and rewards solutions to drive customer satisfaction and generate revenue? Request a free briefing with one of our Loyalty & Rewards Specialists.