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Loyalty programs are a tremendous tool for community banks to build trust with consumers and deliver an enhanced shopping experience. These cardholder loyalty programs have always been about showing appreciation for customers that have entrusted the bank with their business.
But given the shift in customer buying patterns over the past year–whether it’s through adopting contactless payments and mobile wallets or by shopping more online–it may be time for an update based on trending customer preferences.
The current market dynamic is now forcing banks to rethink their approach for loyalty programs in favor of providing an individualized experience. This is where rewards and loyalty programs can “get personal.” If a bank’s debit and credit offering does not include a loyalty program that can fit the specific needs of their customers, they risk losing their cardholders to banks that can offer these types of solutions.
Community banks need to offer a rewards program that delivers offers that are personalized, curated, and relevant to individual consumers to demonstrate that they are attuned to their unique needs and wants. The key to creating and implementing this strategy is to make every loyalty promotion measurable to validate the business case for the rewards program investment and continue to evolve future campaigns.
The days of the one-size-fits-all loyalty program is long gone. Rewards need to be timely, meaning that instant gratification at the point of sale cannot be the only time banks are sending customers offers. This is where artificial intelligence and machine learning come into play so that there are opportunities to build thresholds and triggers based on the consumer behavior and data collection.
Data collected from loyalty program activity will help your bank customize future offerings to customers, providing them with the best possible experience. By looking at this type of data, banks can tailor their offerings based on where their customers like to shop and by their channel preferences.
For example, FIS’ PACE Pulse Survey of North American shoppers saw that 20% of people are permanently shopping more online. A bank that adapts its offerings to fit statistics like this has potential for increased card spend while also giving cardholders a reason to keep your bank’s card top-of-wallet for their everyday purchases.
A technology partner can help community banks deliver a best-in-class loyalty program to their consumers at tremendous speed and scale. This new, open loyalty network concept allows consumers to tailor their preferences and create a level of engagement that fits their individual needs.
In the future, consumers will be able to exchange loyalty currency not only for discounts at different points of sale, but to redeem their hard-earned loyalty perks in exchange for stock shares, cryptocurrencies, and a large variety of other options, making this engagement truly currency agnostic. Reach out to ICBA Bancard to learn more about tailoring loyalty programs to your customers’ needs.
Mladen Vladic is vice president and head of loyalty solutions at FIS.