Credit Card Rewards: Redemption Rising, Satisfaction Sagging
At a time when slightly more than half (52 percent) of credit card customers indicate they selected their new card for a better rewards program, only 54 percent are satisfied with their current rewards programs.
That’s according to a telling survey by J.D. Power & Associates, that also found customers spend more per month on their cards when they like their rewards programs ($1,132, on average) than those who do not find them attractive ($744, on average).
Meanwhile, customers are redeeming their rewards more frequently (53 percent redeemed in 2015, as compared with 49 percent in 2014).
What does this mean for financial institutions?
With more consumers selecting new cards based on rewards and nearly half of them unhappy with their current programs, your institution has the opportunity to attract business away from competitors’ cards.
Steps to Start Leveraging Rewards More Effectively
- Assess Effectiveness of Current Rewards Program: If you don’t have the tools in place to measure your rewards program, that’s where you should start.
- Identify Rewards that Perform Better, Based on Data: Understand what resonates with your customers, expand and enhance those areas , and retire underperforming elements of your program.
- Understand Where Your Customers Use Their Cards: Designing more effective rewards programs starts by gaining a better sense of customer card behavior.
- Implement a Varied & Complete Rewards Program: Nothing turns off card holders more than receiving offers that are not relevant or enticing.
- Enhance Fulfillment and Customer Experience: Even the most attractive rewards are useless if the process of redeeming them is painful. Make your customer interactions as intuitive and seamless as possible.
- Treat Different Market Segments Differently: Once size does not fit all, so dig in on the demographics and develop programs that make sense for different segments.
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.