Enrollment in loyalty programs is rapidly rising across the financial services industry.
Participation in loyalty programs is rapidly rising across the financial services industry. In this post-Durbin world, with capped interchange fees and a web of new regulations, Financial Institutions (FIs) continue to invest in loyalty programs to help retain customers, reward loyal card users and generate sustained card revenue growth. Recent research by Accenture indicated that one-third of all North American cardholders participated in a loyalty program in 2011. Offering loyalty rewards programs helps FIs, especially community, regional and mid-sized institutions, attract and keep high-value customers. Highly customizable rewards programs have proven to motivate cardholders to activate their cards and use them frequently.
In response to the lure of accumulating points, loyalty-driven cardholders use their cards almost twice as often as nonparticipating cardholders. Recent Fiserv research shows that card portfolios with rewards benefits sport 15 percent higher activation rates and spending increases of as much as 40 percent. Loyalty programs are proven to keep customers since program enrollees leave their FI at less than one-third the rate of non-participating cardholders. Loyalty programs benefit customers and FIs and, therefore, are here to stay.
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