FIS Modern Banking Platform
Advance your bank with a modern core platform.
Bill Hampton I Credit Union Division Executive, FIS
November 30, 2020
From the introductions of Green Shield stamps in the late 19th century to Betty Crocker’s box tops in the 1920s and frequent flier programs in the 1980s, rewards to foster consumer loyalty have evolved to reflect changing consumer behaviors and preferences.
The redemption habits of today’s cardholders underscore a growing preference for cash rewards or an equivalent such as gift cards – “points as currency.” Recently released statistics from creditcards.com demonstrate that currency rewards have displaced yesterday’s toaster or blender and even free airfare.
Particularly troubling is the statistic showing 22 percent non-redemption during 2019. This means that fully one-fifth of cardholders are not engaging with companies’ loyalty programs. Another sign of eroding engagement is declining cardholder satisfaction, slipping from 47 percent to 44 percent between 2018 and 2019, according to the recent Bond Loyalty report.
Credit union cardholders expect three things from loyalty programs:
Isn’t it time to replace the outdated catalog with relevant offers that fit today’s lifestyles and provide a superior redemption experience – one that’s simple, provides immediate gratification and takes the burden of redemption off the backs of cardholders? Isn’t it also time to reward loyalty members regularly instead of making them wait months, or even years, to be thanked for their business?
Connecting with consumers on their terms requires a new loyalty program model – one that integrates the company’s program into consumers’ regular routines and meets their expectations for quick and easy redemption. FIS Premium Payback represents an example of this new model. Premium Payback will frequently engage credit union members by presenting them with the ability to enable loyalty point redemption at point of sale (POS). Cardholders with enough points to qualify for redemption can opt to use their rollback offer when they present their payment card or digital device at POS.
The redemption rate for Premium Payback is four times greater than coupon redemption and 50 percent of those enrolled redeemed their points two or more times in 12 months. Ninety percent of users rated the experience as “good” or “very good” and spending increased by 36 percent after program implementation.
Premium Payback cardholders are even using their points online. In fact, since launching its Premium Payback partnership program with FIS, eCommerce giant PayPal has seen incredible results. Compared to the same time period in the year prior, overall card spend increased by 16 percent once the program rolled out with debit card spending increased by 20.2 percent, while credit card spends increased 10.8 percent. Following the larger late July release, overall spend increased to 16.9 percent during the first week of launch. It later settled into a trend of consistent increases, averaging about 14 percent overall.
By intelligently integrating loyalty points into the regular transaction process, credit unions can provide cardholders with the solutions they want and also differentiate themselves by keeping their loyalty program front and center in their members’ minds.
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