A complex confluence of forces is accelerating, according to Cassie Boutelle, vice president, loyalty products, global retail payments/product management, at FIS Global.
During her session, “The Loyalty Effect,” at this month’s 10th annual Loyalty Expo, Boutelle said that creating new redemption opportunities at the point-of-sale is revolutionizing the way consumers are engaging with their payment card issuers and retailers.
“Turning rewards points into a new spendable currency creates a win-win for all players in the ecosystem,” she said.
U.S. consumers hold 3.3 billion memberships in customer loyalty programs, Boutelle noted during the session. Whether you’re talking about a leading financial institution, a small retail shop, or a global company, there is one common theme that ensures the overall success of your business: Customer loyalty.
The “loyalty effect” is a powerful profit generator because loyal consumers tend to spend more, refer others, and cost less to serve. Boutelle pointed to the following statistics:
Nearly 60 percent of shoppers stated they would be encouraged to shop more with a brand if it had a loyalty program and 67 percent of consumers modify the brands/companies they purchase from to maximize points.
As regulatory pressures and new payments technologies challenge relationships between financial institutions and merchants, she said, it’s important to find ways to collaborate on emerging payment types and create new partnerships to support them including point-of-sale integrations, mobile wallets, and redemption options.
Premium Payback is a new innovative real-time loyalty redemption solution from FIS that enables financial institutions to engage consumers at the POS. This network creates a win-win for consumers, financial institutions, and retailers by offering consumers an opportunity to convert points into currency, reduces loyalty program costs for financial institutions, and provides retailers an opportunity to engage new consumers. Premium Payback is highly adaptable across industries to reward customers, drive loyalty, and increase customer engagement.
Boutelle outline the current loyalty landscape:
- We are solving for $60B in rewards liability across all loyalty programs in North America
- 1/3 of all rewards go unredeemed each year
- 26 percent growth in rewards program participation since the last census
- More than 1/5 of members have never made a redemption
- Non-redeemers are 2.3X more likely to defect than those who did in the last 12 months
- The number of loyalty programs the average U.S. consumer belongs to is 13.4
- The number of loyalty programs the average U.S. consumer is active in is 6.7
FIS has quietly established a leadership position in customer loyalty:
- 25 years of operating card marketing and loyalty rewards programs
- 3,100+ loyalty-specific clients
- 6,800+ individual programs
As a premier loyalty provider, FIS Global’s market reach, client relationships, and industry expertise enable it to create solutions that transform the market.
Merchant benefits:
New lower currency option
Drive incremental sales growth
Leverage existing integrations
Flexible financial & operational models
Cross marketing opportunities
Consumer benefits:
Increased buying power
Higher brand affinity
More access to deals and offers
Ease of redemption
High perceived value