Is brand loyalty dead?
This was the question posed by Ma. Luz “Yayu” Javier, President & COO of rewards and loyalty company Avanza, Inc. as she started her presentation at the recently concluded 9th General Membership Meeting last September 24, 2010 at the Picasso Boutique Serviced Residences.
The speaker provided some insights about loyalty programs based on the FGD study conducted by Avanza on credit card loyalty programs. The study cited card features, incentives/rewards/perks, international recognition of the card, bank services and prestige for high-tier as the key factors for choosing a credit card. Meanwhile, factors such as overcharging, billing problems, poor customer service and small credit line lead the customers to drop a credit card service.
The study also revealed the types of perks that are attractive to credit card holders. “Anything that’s instant attracts consumers,” Javier said. Other type of perks like discount and zero percent interest offers also attract consumers. It is interesting to note, however, that perks that let consumers spend more are not attractive.
“We are led to the question: Are we rewarding usage or loyalty?” She stressed a company’s loyalty program must consider the consumers’ length of stay rather than their card usage.
To support her statement, she cited a case study on Ultimate Rewards, a loyalty program by global leading financial services Chase. Ultimate Rewards offers “wow” experiences through unlimited rewards and immortal points. As a result, card members are expected to grow to more than 20 million by the end of 2010.
Javier also cited a loyalty program made by Citi Rewards. A combination of value and selection rewards, card members earn points from banking, credit card usage, deposits and paying bills online. Citi Rewards also tied up with popular online shopping websites like Amazon.com and Expedia.com for the rewards. After six years, Citi Rewards has 13 million active members making them the most profitable customer segment.
To wrap up her discussion, she mentioned the future developments in loyalty programs. Due to advances in technology, companies can now use RFID (radio frequency identification devices) to track consumer’s transactions, or mobile advertising for a company’s promotions. Other technological advancements like biometrics and wireless and electronic tags can also be used to track consumer behavior.
To make a loyalty program successful, Javier reminded the audience to communicate to their consumers to know what type of program that will appeal to them. “Make it a relationship program, not just a sales promotions tool.”
To view Ms. Yayu Javier’s presentation, please visit: http://prezi.com/4fkwx9_4snxn/loyalty-for-banks/