Consumers don’t really spend a lot of time redeeming their rewards. Maybe that’s a function of the programs where paying for points is limited at best — or unexciting at worst. Bridge2 Solutions’ Chief Commercial Officer Larry Wine tells PYMNTS’ Karen Webster that the overall value proposition of the rewards currency itself needs to be accurately conveyed in order to boost engagement and, of course, redemptions.
Ubiquity. Rewards. Ubiquity rewards … merchants, program sponsors and consumers …
If done right.
Rewards as currency might be among the best ways to enhance shopping, boost consumer loyalty and give some flexibility in what – and why – people buy.
But then again, a lot of people aren’t paying attention. Or maybe the rewards programs aren’t enticing enough. Maybe both, as studies show a third of consumers never redeem their points, which creates a problem for loyalty program sponsors, since redemptions directly influence engagement behaviors and profitability.
In an interview with Karen Webster, Bridge2 Solutions’ Chief Commercial Officer Larry Wine said that even when people do redeem points, there is a layer of issues tied to the interval and frequency of when the redemptions take place. Simply put, inconsistency reigns beyond the “usual suspects” that are the most widely redeemed rewards, such as travel points, which are naturally redeemed less frequently.
Could it be that the rewards are not satisfying enough or frictionless enough? The footprint around cash back and statement credit is a large one, said Wine, but those two conduits are “by no means a memorable reward redemption experience.”
The way current cash rewards programs are executed, he said, puts the onus on the program participants to lure consumers with rewards that are rather indistinguishable from one another.
The credit statement, Wine added, leads to a treasure hunt to find where the reward shows up on the statement, taking one – or perhaps as many as two or three – billing cycles. This means friction is thrown into the mix.
“At 100,000 feet, it sounds great and seems very straightforward,” but these types of rewards do not differentiate one program from another, said Wine.
In terms of driving customer loyalty, the value that users place on a basic cash back system lies at the low end of the spectrum, paling next to the aspirations of taking a trip, for example, or redeeming points in order to gift a relative the latest aspirational Apple product.
Against this backdrop, Bridge2 Solutions “approached this market with [a focus on] technology and customer experience first,” said Wine, geared toward cementing loyalty and creating a platform that unlocks what he called “an entire ecosystem of normal consumer behavior, where people are making daily transactions and purchases and thinking about what they really value in that [activity].”
He pointed to Points Pal, debuted by the company last month, through which consumers interact with voice-activated assistants to work with loyalty and employee incentive programs, which he said is leading to frictionless redemption.
Yet caution abounds, in general, when embracing new technology. Points ubiquity is hard to achieve, he acknowledged, a holy grail of sorts in that corner of payments. Technology may have a “coolness” factor, but its use – especially in points redemption – is governed in part by consumers using those points in the same way they interact with their credit cards in stores and in-app.
Until now, there have been technology challenges at the merchant point of sale, capability limitations on the merchant eCommerce site and evaluations from rewards program sponsors dictating where they want their points to be enabled, said Wine.
From the consumer’s view, you need to be “where, how and when the consumer actually wants to interact,” Wine told Webster.
The expectation of rewards is that “this is the ultimate coveted currency. I work hard, and I have specific behavior that I deploy to actually earn these rewards. I expect that currency to be flexible and meaningful and to reward me.”
For the companies themselves, there is the need to understand where in the portfolio people are redeeming their rewards offerings, a mindfulness that’s crucial when firms carry billions of dollars in annual redemptions on the balance sheet and within their profit-and-loss statements.
Travel rewards are the most expensive programs for companies to offer, moving down the spectrum through merchandise. Yet ubiquity and flexibility crafted around these programs lead to consumer “excitement … and willingness to exchange one value for another – the cash equivalency for choice, because members can use [the points] whenever and however they want.”
Crafted well, such incentives can drive complementary card-linked offers to enable compelling earn/burn experiences and heady growth, said Wine. In general, for firms of all stripes and sizes, “the struggle for expanding their revenue base,” said Wine, can be less of a, well, struggle.
The savvy consumer brand seeking to promote customer value must look at appropriate rewards program strategies that dovetail well with their customer base and marketing strategies. Wine offered a scenario where a customer can “burn” their rewards points in any retail store or in any app or online, expanding their purchase while using rewards as a currency.
Looking ahead, Wine said Bridge2 will announce a new product in mid-October that will be “frictionless for the consumer, the merchants and the program sponsor,” with a mobile focus.
Stay tuned.
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