Is your loyalty program driving results for your business?
Brands and card issuers will launch a points-driven loyalty program with a clear purpose – to spur customer engagement and ultimately increase customer lifetime value. And it pays off: successful loyalty programs have high customer-engagement levels, typically seeing a 90% increase in purchase frequency and 60% higher spend per transaction .
However, not all loyalty programs have found such results easy to achieve. Senior decision-makers of these programs have shared some of the critical challenges they face:
- Firstly, customers often don’t know what they’ve earned. Whilst points are valuable within the context of the program, customers can quickly lose track of how many they have earned, or how many they need to take advantage of the rewards the program offers.
- Secondly, customers often find reward offers to be limited in choice, or unappealing. Many programs have a fixed portfolio of rewards, either negotiated by the program owner or the supplier. This is usually due to a limited resource pool who cannot negotiate and sign partnerships on an international scale.
- Finally, 73% of customers save points instead of spending them . More than 50% of accumulated points, with an estimated worth of $50 billion, are never redeemed . Unclaimed rewards can create a significant financial liability on a company’s balance sheet. To compensate, some program owners turn to implementing breakage rules such as points expiration to mitigate such liability. .
However, by increasing breakage, you risk alienating your engaged customers who’ve been actively spending and saving points.
So, how to reduce accrued liability of a points program whilst retaining loyalty?
The answer is to encourage reward spending. When your loyal customers are engaged and spend, you’ll reap the benefits of a healthy loyalty program, lower accrued liability and lower the dependency on points expiring, or other forms of breakage.
“Pay with Points” is a new feature on Ten Lifestyle Group’s (“Ten”) Digital Platform and service to encourage point spend. This feature allows members to pay for any concierge bookings with points.
Simply by raising the visibility of what your customers have earned, expanding the choice of the rewards to include concierge experiences, and making the redemption journey seamless and easy, you can start improving your loyalty program today.
At Ten, we provide unique bespoke customer experience (CX) solutions to engage and retain loyalty with our clients’ high net worth and affluent customers.
Using Ten Digital Platform and this new Pay with Points feature, you’ll have the tools to offer more value than ever before and strengthen the brand connection with your customers.
Benefits and impact of the Pay with Points program
Ten Pay with Points encourages reward spend through:
- Visibility: high visibility of accumulated points at multiple stages of the journey*, including the payment page, reminds members about their points.
- Choice: a wide choice of relevant rewards for the member to redeem (or purchase).
- Convenience: the points redemption process is simple, straightforward, and easy to understand.
- Flexibility: members have the flexibility to pay by card, points, or both*, making this a convenient payment method.
- Promotional mechanics: our technology supports special promotional campaigns, such as double-point events, to directly increase spending on the Platform.
Ten Pay with Points delivers business value through:
- Boosting customer value by directly encouraging points redemption and/or spend on card via the Digital Platform (which can be configured to limit members to paying only via our clients’ approved payment methods).
- Having high-spending, highly engaged customers who are less likely to leave points on the table – at Ten, members spend up to 30% more thanks to regular, personalized interactions. For more information, please visit this case study on the value of concierge.
- Allowing each client to determine the value of the points to fit in with their business strategy.
- Enabling integration with a client’s existing points-based program via a secure API between Ten and the client’s points bank/platform.
- Customer Engagement from the Consumer’s Perspective – Rosetta Consulting
- Top 5 Things To Know Before Launching a Loyalty Program – The Wise Marketer
- Can Blockchain Help Loyalty Programs? – Bitcoin Magazine, Nasdaq
- Loyalty Big Picture – LoyaltyOne