“I built it. So why didn’t they come?”
This is a question all loyalty managers ask themselves as they review their member base and notice there are members not engaging from a redemption perspective. Now, financially, this may seem ideal because less redemptions means lower reward costs; however, the cost savings on a balance sheet do not account for the lost opportunity that occurs when a member doesn’t realize the value of the program. Kobie knows when redeemers realize value, the program realizes value.
Redemptions provide members with tangible value from the program, as well as natural moments for the brand to engage with a member when they’re feeling the love during the peak in the loyalty lifecycle. By capitalizing on these moments, brands lay the groundwork for sustainable emotional loyalty.
Traditionally, the most common redemption journey within a loyalty program involves a member earning currency and then actively choosing to go to a digital experience (i.e. app, member portal, etc.) to make a redemption. And this journey is the proven experience for members who are engaged and actively looking to redeem.
But what about those members who don’t have redemption top of mind or aren’t familiar with the redemption process overall?
You need to bring the redemption to them.
You bring it to them in the exact moment when they can use it. And you bring it to them at a retailer they visit.
Kobie is working with multiple credit card issuers on doing just that with a product which proactively asks if the member would like to redeem their points for a portion of their purchase during the checkout of specific merchants through the POS.
Initial results of this redemption option have been promising. Since launch, Kobie is seeing the following across clients:
- It makes up between 20-30% of all items redeemed
- 30-40% of redeemers are cardholders who either never redeemed before or haven’t redeemed in at least a year
- Cardholders are showing positive post redemption incremental spend
As more merchants come on board and as cardholders become more familiar with the redemption offering, Kobie expects these numbers to grow, deepening the emotional loyalty of the cardholder to their credit card issuer because they are instantly being rewarded for top of wallet behavior. Not only are they being rewarded for the portion off the purchase, but they are being rewarded in three other ways.
1. Proactively Prompted – This redemption experience is unique because it removes barriers for cardholders with enough points to make a redemption by strategically inserting itself within the checkout flow of the POS of its merchants. It is actively alerting them they have enough points to redeem and can do so right now.
2. Convenience Factor – Kobie knows convenience is one of the six main drivers of loyalty and this redemption item puts itself right at the cardholder’s fingertips. There’s no login, no need to find the redemption they want to make and no wait for the realization of value. The redemption is happening right when they need it – during the transaction.
3. Relevancy – The redemption is happening at the store they’re currently buying something at. Within any redemption catalog, there are items in the merchandise catalog or brands within the gift card catalog which are never going to be relevant to certain cardholders. With this redemption item, there’s no wondering if it’s a store they shop at because they wouldn’t be prompted if they weren’t. So not only is this redemption happening at the right time, but it’s happening in the right place within the loyalty experience.
Now, some of you might be thinking, “Aren’t I just driving loyalty to that retailer and not to my card?” It’s a good question. The key to this experience is making sure the positive effects of the redemption reflect back to the program that enabled it to happen.
Communications are critical. Additional educational messaging as well as post-redemption communications are recommended to reinforce that they were able to make the redemption because of their loyalty to the credit card they used, not the retailer they used it at.
Kobie is excited by being able to offer this redemption item to its clients because it allows them to evolve their redemption offerings to their members as their members’ needs evolve.
Because now, if we build it and they don’t come, we can go them. Where they want it and where it’s important to them.
Written By: Drew Slater, Director, Strategic Consulting
As a Director of Strategic Consulting, Drew Slater specializes in project management, research, and creative problem solving. Drew’s experience stretches across verticals including retail, finance, and travel and hospitality.
