Tuesday, February 5, 2019
An independent study published by Blackhawk Network found growth in real-time loyalty programs is largely driven by younger consumers. The report, A Heart-to-Heart About Increasing Loyalty, was based on a survey of 1,500 loyalty program participants across numerous verticals, including retail, airline, hotel, food and beverage, online retail, bank, gym, telecom, and utility sectors.
Citing gift cards as the most popular redemption method, researchers found a majority of respondents redeem small rewards frequently, cashing out before rewards reach the $100 mark. "People love to get their rewards and the sooner, the better," researchers wrote. In loyalty programs with high levels of engagement, 90 percent of members redeem points at least once a year and more than 50 percent of members cash in for a reward at least four times per year, according to the study.
Theresa McEndree, vice president of marketing at Blackhawk Network, observed that effective loyalty programs keep participants coming back, which results in higher redemption frequency. "Combined with the fact that most consumers want to redeem their rewards well before the $100 mark, our findings suggest that retailers and organizations can increase consumer engagement with their loyalty program by simply offering the right rewards at the right values," she said.
Research shows that 80 percent of members seek opportunities to redeem points for rewards at values far below the $100 mark. These findings support McEndree's contention that most consumers prefer not to wait for a big payoff. Retailers can increase loyalty by offering a series of small rewards that are easy to attain, researchers stated.
With gift cards dominating redemption categories, researchers also noted that consumers want the cards to be broadly accepted online, in stores and at banks and telco companies. Following are additional highlights from the study:
Mladen Vladic, general manager, loyalty services at FIS, said FIS Premium Payback, a real-time rewards redemption network, enables consumers to redeem unused points at checkout. The program, launched a few years ago, is increasing customer traffic and driving incremental revenue, particularly in the fuel category, where price sensitivity is especially strong, he noted.
"Consumers tend to have an irrational feeling about gas prices and will sometimes drive across town to save a few cents at the pump," Vladic said. "FIS Premium Payback can incentivize consumers while working together with a fuel rewards program to create a seamless experience at the dispenser."
Vladic said FIS partnered with Shell and leading service retailers to engage in a different way. "This multimerchant coalition is taking immediacy to the next level with a cents-per-gallon instant redemption at the POS," he added. "This is creating a richer purchase environment across numerous verticals as our partners use real-time decisioning to enhance the customer experience."
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