How a Comprehensive Loyalty Program Can Benefit Banks, Merchants, and Consumers

Business leaders and economists widely recognize the significant impact of loyalty incentives on consumer behavior.

Loyalty incentives possess the remarkable ability to engage and motivate individuals, influencing their purchasing decisions and forging enduring brand relationships.

From discounts and rewards to exclusive promotions and personalized offers, loyalty incentives are indispensable tools wielded by businesses to shape consumer preferences and guide their choices.

Historically, loyalty incentives for bank credit and debit cards have taken various forms, including cashback rewards, travel points, and exclusive discounts.

Banks leverage consumers’ desire for tangible benefits and value, creating powerful incentives to use their cards more frequently and for a wider range of transactions.

A recent study conducted by Visa’s Consulting and Analytics team revealed that consumers increasingly seek highly tailored and differentiated loyalty propositions.

They desire businesses that understand them as individuals, value their patronage, connect with them emotionally, and resonate with their beliefs. Furthermore, consumers expect seamless and relevant experiences that align with their lifestyles.

As this trend continues to evolve, there is a clear shift away from the traditional transaction-based points and cashback rewards approach.

Instead, merchants and financial institutions should aim to establish ongoing emotional connections by providing personalized lifestyle solutions.

The objective is to create stronger customer loyalty by offering unique solutions that are challenging for competitors to replicate, thereby transforming the loyalty market.

Visa’s Card Linked Loyalty Program – The Global Merchant Marketplace

A recent collaboration between Visa and Reward, a leader in bank loyalty, serves as a compelling case study. This innovative solution, known as Visa’s Card Linked Offers, has been designed to enhance customer engagement by delivering data-driven, hyper-personalized offers to Visa cardholders.

The program empowers Visa cardholders to earn merchant-funded rewards domestically and internationally, spanning 20 countries and featuring 180 brands.

This, in turn, stimulates higher card usage, increased spending, and elevated satisfaction levels, as measured through Net Promoter Score (NPS).

Concurrently, merchants gain the capability to effectively promote relevant offers to Visa cardholders through digital channels, leveraging insights from customers’ in-store and market-wide spending patterns.

Visa’s Card Linked Offers solution enables banks to provide their cardholders with relevant and personalized merchant-funded offers based on cardholders’ individual needs and spending preferences.

It also offers a seamless customer experience, as rewards are automatically identified and credited to the cardholder’s account.

This powerful tool complements existing loyalty offerings, further driving meaningful customer engagement and fostering long-term loyalty for both the bank and participating merchants.

Visa’s Card Linked Offers solution places strong emphasis on safeguarding personal data while utilizing cardholder information to deliver exceptional loyalty program offers.

This ensures customers have access to highly tailored and compelling retail opportunities. It has established collaborations with the region’s largest retail groups, including Al Futtaim Group, Eathos, Apparel, Landmark, Net-A-Porter, Selfridges, and more.

Successful European Program Implementation

The introduction of the program in Europe has yielded significant outcomes, with card issuers experiencing a notable 20-point increase in their NPS among program participants.

Customers enrolled in the program were twice as likely to hold multiple products with the same financial institution and exhibited a 27% increase in card usage compared to non-program members.

In today’s world, consumers enjoy an unprecedented array of goods and services at their fingertips. Solutions to their needs can be discovered and purchased from around the world with just a few clicks.

Therefore, maintaining close proximity to customers is essential, particularly in banking, where disruptive newcomers seek to establish customer relationships.

Loyalty programs, exemplified by Visa’s Card Linked Solutions, are vital for both immediate survival and long-term success.

Written by Andrew Uaboi

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