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Seven Tips To Tap Your Customers’ Engagement Potential This Holiday Season

With the holiday season upon us, Americans will once again be participating in one of their favorite past-times – racking up points from credit card rewards programs. A recent study revealed what some may consider a surprising statistic– consumers are more eager to earn points then spend them. According to a 2017 Maritz market study, 73% of loyalty program members identify themselves as “point savers” rather than “point spenders.”

In addition, 50% of this “saver” population (or just under 37% of the overall population) save without an end goal in mind. This specific behavior presents a unique challenge for teams managing loyalty programs, especially in the credit card world where the potential to earn is so high, since the monetary value of points must be accounted for at the time they are earned, not spent. The end result is a lopsided accounting ledger for those card providers whose saver population decides to hoard points.

And while the term “liability” is widely accepted in the loyalty program world, its connotation is extremely negative. Instead of thinking about members’ unredeemed points as the evil two-ton gorilla that sits on their balance sheet, program owners should see liability as something to embrace, not just something to manage. Unredeemed points are an opportunity and represent the engagement potential of their program to develop a deeper loyalty between their consumers and their brand.  

How can credit card companies maximize their “engagement potential” this holiday season?

If credit card companies aren’t already segmenting by behavior, this is a good place to start. Companies should complete an assessment to split cardholders into three simple groups: actively engaged, unengaged with potential, and unengaged with high likelihood of being lost. Consumers who fall into each of these categories are in very different places in their customer journey and companies should interact with them in different ways. Quick notes on each:

  • Actively Engaged:  This group offers you the best opportunity to personalize their experience. Look to utilize existing data resources like recent spend behavior and redemption history to entice members with meaningful and relevant redemption options.
  • Unengaged with potential: Gone are the days of the generic “It’s been a while” and “We miss you” emails.  Re-engagement is a difficult task, but something that a smart approach can effectively achieve. Businesses who are committed to the long-term success of their re-engagement campaigns should constantly run A/B tests with this segment so they can refine their approach, tracking the specific hooks that are able to move members back up into the active segment and learning how far gone is too far to recover.
  • Unengaged and likely lost: Let them go. There are some members whose point balance liabilities are just that, a liability. A healthy breakage rate is modeled into most points-based programs, and executing a campaign that prompts the use of points from a segment whose business has been lost will adversely impact that balance.

Now that we know who card companies should be targeting this holiday season, let’s take a look at some best practices for how to entice customers into redeeming their unused points.

1. Engage them early. The holiday points redemption spike starts in October. If companies are waiting until Thanksgiving to hit their holiday stride, they will have missed out on the majority of their redemption window.

2. Encourage members to explore. Humans are creatures of habit, but the holidays are a magical time. A Maritz study showed that the rewards members want most (in order) are cash back, gift cards, and merchandise. But during the holiday months there is an uptick in the percentage of redemption that takes place for gift cards and merchandise.  While any engagement is positive, card providers will experience a win-win when they maximize redemption in the holiday window when the trend is in favor of these categories which usually have a lower cpp (cost per point). Using aspirational imagery and copy that encourages members to explore these redemption options will be effective since members are already primed for consumption during this time of year.  Additionally, this is a great opportunity to set the “default” redemption behavior to these categories for members who have never redeemed before.

3. Talk to them the way an online retailer would. Businesses talk to consumers differently around the holidays; so should rewards programs. This approach includes everything from implementing limited time discounts to grab attention and create urgency, to appealing to consumers’ value of time by juxtaposing the ease of online shopping against the madness of brick and mortar holiday retail. The end-goal is to drive conversions, something that online businesses are getting down to a science, so there is no reason to reinvent the wheel.

4. Tie into one of the season’s oldest traditions – lists. The goal here is to narrow the focus and avoid choice overload. When consumers face too many options the most likely outcome is for them to fall back on their default behavior or do nothing (in the case of savers, these options happen to be one and the same). Card companies can help simplify the decision process by showcasing select redemption options in list form. Create Top 10 giftable lists from popular but generic categories like gift cards or electronics. Encourage members to “check people off their list using points” in a manner that feels productive and efficient, tying into the universal motto of the holiday shopping season, “one less thing.”

5. Highlight charity options. Numerous studies on pro-social behavior show that people actually receive more joy when they are giving than when they receive. Charitable giving has the unique ability to create a deep emotional response which not only improves the mood of the giver, but also improves the relationship with the party who helped facilitate that interaction, i.e. the credit card brand.

Additionally, more opportunity exists to create community among the members themselves by making their donation visibly part of the whole via a progress bar showcasing the total donated. This strategy creates a bridge for an individual to connect with others who share their values and will reinforce their decision to be associated with the brand.

6. Give them the OK to spend on themselves. Everyone does it. Using points is a great guilt-free way to reward oneself during the holiday season, but sometimes consumers need to be given the green light to do so. Companies openly recognizing that it is the loyal behavior of their customer which earned the points in the first place, and therefore customers should make sure to treat themselves, will resonate with many program participants.

7. Create an end of the season campaign. Finally, card providers need to make sure that once the holiday spend and madness has concluded, they continue instilling repetitive redemption behavior by reminding members of the new balances they have earned from  holiday purchases. One approach to consider is highlighting the specific amount of points earned in the months of November and December to help tell the story.

The holiday season is truly the best opportunity of the year to engage customers and encourage the redemption of point balances. Companies need to find the right approach that aligns with their brand voice, and during the holiday season they shouldn’t be afraid to be a little whimsical. Consumers enjoy a bit of personality, it helps them connect to the brand on an emotional level which is a necessary component for any successful, long-term relationship – even if that relationship is with their credit card provider.

This article originally appeared on Paymentweek.com

Loyalty Through a Millennial Lens, Part 3

Welcome to the final installment of the series Loyalty Through a Millennial Lens in partnership with The Wise Marketer. 

Part 1 was all about Evan’s favorite brands and why he has an affinity to those brands. Part 2 was all about loyalty program’s biggest turn-offs. And now, Part 3 is all about customer data. 

Is there a threshold that brands can cross for the kind of data its collecting and asking customers for? 

According to Evan, as long as a brand is transparent about what they’re going to use the data for and use it to benefit the customers, then he has no hesitations about a brand using his information. Spotify makes it clear that their use of his data is to create something beneficial to him. This isn’t the case for all brands, however. 

To see the full video, click below to learn more about best practices brands can follow to get more data from their customers(and use it for good!) 

October 10th Is Now Reward Points Day

American consumers leave millions of unused points on the table every year, meaning some households are losing out on hundreds of dollars in value. That’s not surprising, as according to a 2017 Maritz market study, 73% of loyalty program members identify themselves as “point savers” rather than “point spenders”. But that habit makes it easy to leave points behind, especially when considering the average US household is a member of nearly 30 different rewards programs.  

Enter Reward Points Day, an annual reminder for consumers to take stock of their various point balances, understand that those points have real dollar value, and recognize that there’s more ways to use them than ever before. For brands, it’s an opportunity to jump start the engagement of their loyal point savers at a vital time of year by creating a heightened rewards experience, especially on October 10th (10/10) itself. 

In fact some already are, with customer-obsessed Southwest Airlines among those who are bringing Reward Points Day to their members’ attention through special promotions and communications this year.   

So what actions should consumers be taking on Reward Points Day? Here are three tips for those looking to stay on top of the points they have accumulated across their various programs: 

  1. Take the time to reset passwords. It might seem inconvenient, but five minutes is worth not losing out on already accrued points.  
  2. Check point expiration dates.  Every program has different rules. Don’t let your hard-earned points drift away because you “didn’t know”. 
  3. Explore the different ways points can be used. Many brands now have alternative rewards options beyond their own services or merchandise. Be sure to review their full array of redemption options.  

Do you know the value of the at-risk reward points sitting in your accounts?