Consumers have come a long way since cutting coupons out of newspapers and the backs of cereal boxes, but the draw of a good deal remains.
What has changed is the way consumers engage with discounts, how they get these discounts, and their concept of value. So naturally, organizations are grappling with how to change their loyalty and rewards programs to adapt to the new paradigm of consumer-first marketing.
The ultimate demand from consumers is to gain more value for the money they spend. Or in the case of credit unions, more value from the relationship between the member and their credit union.
In today’s hyper-connected marketing environment, consumers feel constant pressure to get the best deal for a purchase. What coupons or deals are available? Where can they get them? What combination of deals is the most effective?
This “deal fatigue” can be counterproductive for businesses because when consumers are confused on how to get the best value, they often jump to a competitor that offers a simpler, guided deal experience.
In addition to being exclusive, credit union rewards programs need to be simple to understand and redeem without requiring consumers to jump through a lot of hoops.
Having a lot of options for deals can lead to deal fatigue. By limiting the options consumers have, it’s easier to pick out what works best for them.
Brand loyalty
Consumers have brand loyalty for a reason: that brand has repeatedly demonstrated remarkable value and service.
How long does it take for a consumer to become loyal to a brand? According to a recent survey by customer experience management firm Infomoment, 77% of consumers have been doing business with their trusted brands for 10 years or more.
Another survey by cloud solutions provider YotPo found that 37% of consumers consider themselves to be loyal to a brand after more than five purchases, and 33% say the same after three purchases.
Obviously, it takes a significant amount of time to build consumer loyalty and raise engagement. What if credit unions could borrow some clout to move the brand-building process along?
Partnerships with trusted brands can help credit unions leverage the brand loyalty of these partners. However, organizations should be wary of the downsides: a negative impact to a partner’s brand reputation can affect their own.
VIP status
Consumers expect businesses to tailor loyalty programs to suit their needs, and they don’t mind sharing some information about themselves for this purpose as long as it provides them with a better shopping experience.
According to the 2018 Personalization Pulse Check from Accenture Interactive, 91% of consumers are more likely to shop with brands that recognize, remember, and provide them with relevant offers and recommendations.
But be careful when gathering data. While consumers are generally tolerant of businesses collecting some information, they do have limits. Around 73% of consumers said no retailer or brand has communicated with them in a way that felt “too personal.”
However, among the 27% who did feel the brand overstepped their bounds, two-thirds were uncomfortable because they didn't willingly provide the data used.
Loyalty and rewards programs are big business. According to the 2017 COLLOQUY Loyalty Census, the U.S. has an estimated 3.8 billion loyalty accounts.
Financial services account for 17% of that number—nearly 664.1 million membership accounts. Those present many opportunities for engendering deeper financial brand loyalty and turning members into advocates.
Credit Union Magazine’s Summer 2023 issue highlights the lending outlook for the rest of the year, how credit unions leverage fintech companies to boost digital lending, the power of lending partnerships, common Bank Secrecy Act violations, and the shift board members must make when becoming chair.
