Moderna plataforma de serviços bancários da FIS
Faça seu banco evoluir com uma plataforma central moderna.
March 6, 2018
Mladen Vladic, General Manager – Loyalty Services
Competition for credit card customers is heating up. To stay ahead of the pack, issuers are reinvigorating their programs with new loyalty rewards that reduce friction in communications, engagement and redemption experience.
Consumer credit borrowing is growing – the Fed reports an annual rate of nearly five percent, but traditional paths to revenue are not growing at the same pace. Time-worn tactics used in the credit card industry are increasingly falling out of favor. Annual fees are no longer widely acceptable to consumers looking for new credit cards, as one example. In fact, lack of annual fees is the most significant factor – cited by 85% of consumers – in choosing a credit card, according to a recent Aite study.
Direct mail, meanwhile, is being replaced with digital communications. In 2008, the top ten banks mailed 8.1 billion card offers – today, that number has been cut in half.
On the other hand, cash back rewards – chosen by 50% of consumers, according to Aite – attracts customers, but offers no benefit beyond the value of the currency; they also fail to build lasting connections with cardholders.
Currently, 38% of consumers who earn points or cash back save them for the future, but have no specific redemption goal in mind. Fortunately, encouraging those consumers to set goals can boost card usage and revenue.
Here’s how: If my goal requires 10,000 points to achieve it and I’m aware of how my current level of charges translates to points, I know how long it will take me to reach my goal. I also can calculate the impact on my timeline of shifting more spending to the card. The closer I get to the goal, the more likely I am to focus on achieving it.
Types of rewards offered by issuers are more important to consumers than interest rates when choosing a credit card. In fact, 82% of consumers cite the type of rewards offered as a driver of credit card choice, while only 62% cite interest rates. What emerges are more desirable rewards choices that can sway card choice and increase engagement.
Real-time, point-of-sale (POS) redemption is proving to be a crowd pleaser, especially among younger consumers. FIS’ Premium Payback program, rolling out at fuel pumps across the country, satisfies growing appetites for immediacy and convenience. With one swipe, eligible consumers are prompted to redeem their points – eliminating the need to scan a separate loyalty card or visit a website to redeem points and then wait for one’s reward.
The Emergence of point hubs, like points.com, enable point transfers, thus giving consumers more flexible redemption options. Cardholders can transfer their default loyalty currency to alternative hotels or airline program currencies, for example.
Low-point redemption options, such as charitable giving, gamification, sweepstakes, and auctions can allow all cardholders to participate in their rewards program.
• With charitable giving, consumers can elect to donate any amount of points to a designated cause. Aggregated points translate into meaningful donation amounts. For instance, cardholders in FIS’ client programs collectively donated close to $700,000 to help hurricane victims last year.
• An alternative low-point option – gamification – leverages consumers’ fascination with games to drive usage. Scoreboards allow gamers to compare scores, which fuels competition and motivates players to collect more points.
Redemption for memorable experiences generates long-term loyalty and positive word-of-mouth. One of our client’s cardholders recently won a raffle for two tickets to Super Bowl 2018 – a memorable experience on a grand scale and a compelling reason to use that card for future purchases. However, the winner’s experience doesn’t need to be the Super Bowl to become etched in the consumers’ memories.
Stock redemption through Stockpiles’ eGift cards, which offers denominations ranging from $25 to $100, provides cardholders with a way to grow their money. Choices include top brands such as Google, Tesla, Facebook, Apple and Disney, as well as Gold ETFs, and a generic card that lets users select from Stockpiles’ expanded list of stocks.
As undifferentiated rewards fade in popularity, emerging rewards such as real-time, POS rewards are on the upswing, driven by consumers’ growing demands for immediacy, convenience, and flexibility. It’s time for financial institutions and merchants to evaluate if and how new types of rewards can support their customer acquisition and retention strategies.
FIS | General Manager, Loyalty Services
Mladen Vladic has more than 15 years of experience in the Loyalty and Payment Card Industry. He has managed and headed both the Product Strategy and Operations organizations that support over 4,500 financial institutions and retailers. Mladen is responsible for developing and implementing loyalty solutions for multidimensional complex operational problems at FIS.
Vamos trabalhar juntos para atingir suas metas. Entre em contato conosco usando os links abaixo, e um representante entrará em contato com você.
Sua experiência é nossa prioridade. Estamos aqui para ajudar.Saiba mais