“The era of transactional loyalty is over.” – Mladen Vladic, General Manager of Loyalty Services, Global FIS.
Inflation, rising fuel costs and anticipation of holiday shopping has consumers looking for more ways to save on everyday purchases, and brands are more than willing to help, especially when that help translates into a loyal customer relationship. One way brands can alleviate the wallet strain and gain loyalty is by incorporating Premium Payback by FIS, a real-time way for customers to redeem credit card rewards points at checkout.
Loyalty360 met with Mladen Vladic, General Manager of Loyalty Services, at Global FIS, to learn more about the company’s fintech services, its recent partnership with Walmart, and the company’s overall views on customer loyalty.
Vladic emigrated to the United States as a civil war refugee from Eastern Europe and has been with FIS for fifteen years serving many different roles in the loyalty division. Always on the lookout for ways to improve the customer experience, he says he often goes by “Mike” at Starbucks to not slow down the process for himself, the barista and other customers in line.
He explains, “It’s another validation that consumer engagement and the solid relationship between a brand and the consumer is a two-way street, and we should contribute to that experience as well.” He should be earning double Star rewards!
Staying Relevant with a Holistic Customer Approach
Founded in 1968, FIS has been serving clients worldwide with payment, banking and investment fintech software. In a nutshell, it is powering and advancing the way the world pays, banks, and invests. As a back-office technology stack, FIS serves a wide range of industries, from banking to retail to enterprise technology. FIS is a one-stop-shop, delivering a frictionless customer experience that makes doing business less work for the clients they serve.
In one word, Vladic says that customer loyalty is about engagement. It’s the concept of acting loyal versus feeling loyal. This behavioral approach to loyalty and engaging the customer at every touch point is what creates brand ambassadors. Consumers are quite willing to provide additional, personal data to companies in exchange for tailored, personalized experiences if their privacy is respected.
Every touch point equals an engagement. Vladic stresses that these engagements can be good or bad, but every interaction with the consumer counts.
He adds, “It’s all about staying relevant to the consumer. Engaging the consumer in the right way will ensure that you stay relevant to them. The era of transactional loyalty is over.”
Going forward, customer loyalty rewards are all about engagement where the exchange of tangible rewards is no longer even a requirement. Today’s consumers value timely, personalized messaging just as much as a tangible reward. This holistic approach to customer loyalty is centered around creating a relevant experience for consumers at every touch point, day in and day out.
Premium Payback Pays Back Threefold
When the loyalty team at FIS examined the traditional credit card points redemption experience, the area had not been disrupted for a long time. But consumers had changed. Cardholders didn’t want to call 800 numbers or log on to websites to redeem their loyalty points. They were looking for a frictionless experience to redeem points and save on purchases they were making in real-time.
Premium Payback was the answer. The pay-with-points through POS and e-commerce channel brought points redemption as real-time . The concept is simple: shoppers with eligible credit cards are prompted at checkout with the option to use accumulated rewards points as currency to be deducted from the purchase amount. This frictionless solution was a win-win-win for all parties involved – the end user, the banker, and the retailer. It was an immediate success.
“At the end of the day, if you don’t meet the needs of the customer, nothing else matters,” says Vladic.
By removing the friction from the redemption process and providing that experience in real-time, it increases the buying power for the consumer. With no app to download and no website to visit, the ability to use loyalty points as currency during the transaction is a frictionless user experience that will keep customers engaged.
Premium Payback benefits not only the credit card holder, but the financial institution that issues the card. It’s a new way to engage consumers and is the only redemption process in existence that requires consumers to spend on the card at the same time. An added benefit is burning liability off the books at a lower cost.
The latest retailer to join the network is no lightweight. Walmart joined Premium Payback to give its credit card members the opportunity to redeem points at over 4700 Walmart locations across the U.S. Early adoption has been very strong, and it not only expands the reach of the network, but it continues to be a way for the retailer to help its customers stretch their dollars during times of economic uncertainty. Being able to redeem loyalty currency in real-time increases buying power, and has been a mutual win for Walmart, the credit card issuer, and the consumer.
Spotlight Existing Features to Drive Engagement
The biggest challenge for any brand today is staying relevant. Disruption began in the banking space prior to Covid and has been doing nothing but accelerating ever since. Some brands are doing very well and harnessing the disruption during the recession to stay relevant to consumers.
Vladic cites two examples of brands that have done an exceptional job of leveraging their assets and capabilities: Bank of America and Amazon.
Bank of America recently launched its first rewards day while Amazon premiered Prime Day in 2016. These one-day promotions drive a sense of urgency to customers and encourage spending while advertising savings.
He says, “It’s a brilliant marketing move to leverage the existing feature functionality and put a spotlight on the brand to drive more incrementality in terms of spend and engagement by the cardholder.”
Many in the industry can learn from this lesson and look at their existing assets to see how they can reposition that feature functionality capability to stay relevant to the consumer. But it doesn’t have to be a big change. Performing small pilot tests to see what works is a first step that any business can take to test the waters.
Thinking Small is the Next Big Thing
Where does Vladic and his team at FIS believe the industry is heading? Think small.
“Focus on delivering micro experiences where you incrementally introduce new experiences,” he says. However, these micro experiences and microservices need to be embedded into the context of solidifying a holistic relationship with the customer. Using tactical micro experiences is a very strategic move brands can make if they are deployed as part of an overarching relationship with the customer.
The traditional banking space has a competitive advantage with the number of products and services they offer to consumers. The real challenge becomes how those financial institutions can effectively solidify the overall relationship to stay relevant to the customers.
Vladic has the answer, stating, “Loyalty is the tool to help solidify that holistic relationship with the customer.”