A Thing
The Green SheetGreen Sheet

Wednesday, January 10, 2024

Green Sheet interviews Engage People's Len Covello

A new report by The Wise Marketer, commissioned by Engage People, shows a growing number of consumers are using points as currency. Based on an October 2023 survey of 1,000 U.S. consumers, Paying with Points – Tomorrow Is Too Late found 84 percent of respondents are redeeming points online and in stores, an 80 percent increase over the previous year, researchers noted.

Len Covello, chief technology officer at Engage People, discussed the Pay with Points (PwP) trend with The Green Sheet. Following are interview highlights.

What effect do you think the current economy is having on consumer preference for PwP?

Consumers prioritize cost savings and seek value from loyalty programs in the current economy. In this instance, PwP becomes particularly appealing during economic downturns and inflationary periods, as it allows tangible benefits to consumers to use a fixed and funded currency like loyalty points to subsidize future purchases. This trend indicates a growing preference for leveraging loyalty points over traditional payment methods in challenging economic times.

What changes have you seen recently in this trend?

In the payments landscape, there has been a shift influenced by current economic conditions. There's a growing interest in loyalty programs that provide immediate value and cost savings. This change is driven by consumers' reactions to economic uncertainties, leading them to seek more tangible benefits from these programs. This trend is evident in two key areas: First, there's a marked increase in inquiries from businesses looking to enhance or establish loyalty programs. Second, we've seen a significant uptick in redemptions from existing partner programs, with more than 50 billion points redeemed. These changes indicate a clear shift in consumer behavior and business strategies in the loyalty program sector.

How do you expect PwP to shape the payments landscape in 2024 and beyond?

PwP is expected to play a prominent role in the payments and loyalty landscape in 2024 and beyond. As technology advances, making integrations more seamless and enhancing personalized experiences, PwP will become increasingly convenient and appealing to consumers. This evolution will likely create a more competitive and dynamic payment and loyalty ecosystem.

What data points in this survey surprised or fascinated you and why?

The survey data I found particularly fascinating include the high percentage (84 percent) of consumers likely to use loyalty currency in the future. Additionally, the fact that 76 percent are willing to switch credit cards for better PwP benefits is striking, especially among retail cardholders. This suggests a strong consumer inclination toward programs that offer tangible financial benefits, such as PwP.

It’s also worth noting that the primary motivation for utilizing PwP is to save money and combat inflation. The preference for redeeming points at everyday locations like grocery stores, online retailers, gas stations and fast-food restaurants further highlights the practical value consumers find in these programs. These insights reveal a significant consumer interest in loyalty programs that provide real economic advantages, particularly during financial uncertainty.

Do you have advice on how rewards and loyalty providers can stand out in the market?

In today's competitive marketplace, rewards and loyalty providers can stand out by focusing on customization and personalization, and tailoring their offerings to meet evolving consumer needs. Providers should offer flexible redemption options and clear communication, ensuring their loyalty programs address immediate, everyday expenses.

Being innovative and creative in differentiating your offerings from competitors and embracing new and emerging trends are crucial. Staying ahead of demand requires conducting ongoing research to understand and anticipate consumer preferences and adjusting your strategy as needed. Finally, adopting a digital and omnichannel approach ensures a seamless and engaging customer experience across all platforms.

How can payments professionals help merchants implement rewards and loyalty to drive results and profitability?

Payments professionals can boost merchants' results and profitability by implementing rewards and loyalty programs. By ensuring a seamless integration of these programs into the existing payment processes, they help maintain system compatibility and operational efficiency. Additionally, by leveraging data analytics, payment professionals provide merchants with valuable insights into consumer behavior, enabling more targeted and effective loyalty strategies.

Furthermore, their expertise in offering solutions that enhance the overall customer experience ensures that these programs are efficient and appealing to consumers, driving increased engagement and profitability for merchants.

What common elements do successful rewards and loyalty programs share?

Successful rewards and loyalty programs typically have several key elements in common. They offer simplicity in how rewards are earned and redeemed, ensuring an easy, frictionless process for members. Clear and transparent communication about the benefits and terms of the program is essential. These programs often feature personalized offers tailored to individual consumer preferences, enhancing the user experience and providing real value. The immediate value is a focal point, ensuring customers feel the benefits immediately.

Additionally, integrating these programs with widely used payment methods and financial tools is a critical factor, as it adds convenience and accessibility, contributing significantly to the program's success.

A copy of Paying with Points – Tomorrow Is Too Late is available at thewisemarketer.com/the-wise-marketer-announces-new-pay-with-points-research-study-jointly-created-with-engage-people/ . end of article

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

Facebook
Twitter
LinkedIn
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
A Thing