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By Troy Land at FIS
When it comes to loyalty programs, credit unions should never automatically assume members are aware of the benefits offered. In fact, a portion of your membership may not even know that your program exists.
There are many reasons why members may not fully understand sponsored rewards programs. For starters, there are all types of rewards out there, so you're not only competing against other banks and credit unions but retailer programs as well.
The average consumer is also enrolled in a number of loyalty programs, so it's no wonder they sometimes become confused or overwhelmed by the information they receive.
All types of companies, large and small, public and private, face similar challenges when it comes to selling into the B2C market — there's simply never enough time, money, or resources to ever fully optimize product performance results.
This will always be the case, as even machines have capacity constraints, maintenance needs, and other limitations. And as long as your program provider is equipping the institution with the tools and knowledge it needs to be successful and achieve its desired ROI, it does not make sense to assert the blame there.
Thankfully, there are a number of simple ways that credit unions can gain a better understanding of their loyalty products, as well as do a better job promoting them internally and to their field of membership.
One example is the billions of dollars in rewards that go unredeemed each year. A CFO may love the breakage benefit that comes with a rewards program, but if these numbers are too high, members are most likely not engaged. This means the institution will struggle to realize the desired acquisition, usage, and retention that caused it to consider offering rewards in the first place.
To strike a good balance, credit unions need to look at the entire picture of both expense management and revenue without narrowing in on one more than the other.
Assuming your rewards program is market competitive, there may still be other internal factors causing low member engagement. For example, if employees don't fully understand a loyalty (or any other) program's features and benefits, then there is a high probability that members won't either.
Options for promoting rewards products typically include word-of-mouth from employees and members, as well as displays and advertisements in the branch, call center, website, home banking and mobile banking applications.
However, the best way to still communicate (at this point in time) is through the Internet, even if members are accessing your site through a mobile device.
Based on research from FIS Global, 80% of users still access rewards information from a computer, although tablet and smartphone access is definitely on the rise.
That means credit unions must maximize this channel to allow for a better user interface and more content to be viewed with fewer clicks. You'll also want to enhance consumer access points as well as incorporate mobile responsive design features and other mobile offerings.
Recently, FIS conducted an internal study on its top 300 financial institutions in an effort to better understand the visibility of member-facing rewards information. This research encompassed a complete assessment of these organizations' home banking websites and how easy or difficult it was to find rewards program information, including the type of content presented, its location, the associated number of mouse clicks to access it, and more.
Key findings from that study include:
There should be no surprise that the more "clean content" displayed for a product offering, the better the overall results.
At the same time, not having any product information at all will have a direct impact on performance, especially when coupled with untrained support staff.
More information is typically better than less, but pay attention to presentation to prevent content overkill.
This alarming finding is likely not just limited to reward products alone. As a result, credit unions should take the following steps to gauge the availability and visibility of their rewards program (as well as any other products):
Although there are many ways credit unions can enhance existing products and services, an easy first step is to simply analyze the primary data that's right in front of you. It's much easier to determine your current state and then plan for future strategies, versus looking at future initiatives when you aren't yet caught up to the status quo.
About The Author
Troy Land is a product strategy leader with more than 10 years of increasing responsibility within the financial services industry including a background in retail banking, payment processing, risk management, relationship management and product development.
Land's extensive knowledge of the payment processing industry and Loyalty solutions make him an emerging commerce expert within the FIS Global team.
About FIS Global
FIS is the world's largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 110 countries. Headquartered in Jacksonville, Fla., FIS employs more than 37,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services, and outsourcing of the technology that drives financial institutions.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at email@example.com or 1-800-446-7453.
January 26, 2014
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