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Opinion

Why Rewards Need to Go Mobile to Remain Competitive

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Technology is a game-changer in all aspects of our personal and business lives, and it is part-and-parcel to building successful member rewards programs. Technology — particularly mobile technology — has evolved to the point where even the smallest CU can create a robust rewards campaign on par with that of a large financial institution.

This is due in large part to off-the-shelf software programs that greatly increase the efficiency and ease of supervising a rewards program — managing a database, running a rewards website, fulfilling the redemptions — while keeping the cost in line with benefits.

Rewards are increasingly becoming a decision driver for consumers when choosing what card to use. Credit unions must ensure that their program is performing optimally.

It's worth the effort. A 2014 study by MasterCard Worldwide shows that the average monthly payment card spending of a consumer who is on a rewards program is $814 compared to $344 spent by a non-rewards consumer. The rewards cardholder is also happier with his or her payment card provider — 63% expressed overall satisfaction compared to 48% of non-reward cardholders.

The question is, how to consistently make the most of these growth opportunities?

Credit unions wanting to engage members must connect with them according to how they choose to interact, which means digitally and especially via mobile devices.

Indeed, mobile technology may be one of the greatest things to ever happen for businesses with a loyalty proposition. It enables the delivery of ultra-personalized rewards, interactive experiences and services wherever the member is located, including at the point-of-sale. Even more promising, all of this is measureable. Strategies can be adjusted in real time, in a test-and-learn environment, so that the loyalty proposition becomes more precise and more sophisticated over time and more rewarding for the member.

While a mobile-based rewards program is vitally important in today's loyalty enterprise, it doesn't necessarily mean it has to be complicated. State-of-the-art web technology, such as plug-and-play programs that recognize a mobile device's screen size and adapts web content accordingly, allows a credit union to properly present rewards information regardless of the device.

Another important factor for a successful loyalty program is ensuring the ease with which members can earn, track and redeem their rewards. In addition to delivering a responsive design solution as described above, CO-OP Financial Services also launched a member rewards mobile app enabling members to check balances, reach customer service, search for local deals and easily redeem points for e-gift cards.

Utilizing mobile technology through credit unions' mobile apps is made easy with API technology—providing a "one-stop-shop" for all credit union benefits within their applications. Truly, credit unions can optimize their loyalty programs with more diverse and targeted rewards and promotions that are intrinsically meaningful, while at the same time emphasizing and elevating their brand. Mobile channels create the opportunity for intensely personalized interactions with members.

Rewards technology is advancing quickly with such iterations as gamification, "the next big thing." Gamification allows a credit union to establish a rewards structure so that whenever one of its members shops at three different local businesses during the same week, they can unlock a new level of rewards opportunity. This "scavenger hunt" approach is a fresh, engaging way to keep rewards fun and experiential for the member.

While rewards are a valuable tool for driving loyalty, they are just one component of a comprehensive loyalty strategy. Rewards work best when members are already engaged in your credit union and its community presence. The right technology must combine with a true adherence to being mission-based institutions, people committed to helping people. And when you do that, rewards programs add a dimension that can rank among the best products you can offer.

Jennifer Kerry is vice president, credit card services for CO-OP Financial Services, Rancho Cucamonga, Calif.

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