10th June 2024
The option to pay with points as a way to redeem a loyalty currency for aspirational or everyday purchases isn’t new, but what can be done to make co-brand card holders or FFP members happier when it comes to using the same.
Consumers love it when they are given an option to use the currency they have accrued to use it the way they want plus for a reward that just doesn’t belong to the travel category. A research by Engage People, featuring U. S. consumers, indicated that they prefer to pay with points primarily for cost saving and flexibility, more when the inflationary pressure can be felt. Importantly, a 15% average lift in transaction size tends to take place when points are redeemed via the ‘pay with points’ option.
For loyalty practitioners, they need to come to grips with the intricate interplay between shoppers’ behaviour, payment technology, and their own loyalty offering.
Some important points:
- It is interesting to assess how issues related to visibility and usage are being tackled as of today. For instance, a consumer from China who has loyalty currencies from merchants, banks etc. being informed about the option of choosing any loyalty currency they wish to and then being able to use any from them or even a blend of them at the checkout. This way the tech is making reward points completely universal. How brands view such experience on third party apps is a vital aspect.
- It must be added that payment choices are not uniform. As the team at Engage pointed out in its report, payment choices exhibit significant variation across different demographics, transaction types, retail environments, and transaction sizes. This “diversity indicates that perceptions and ultimate acceptance of pay with points will likely be complex and varied as well”.
- Redemption options need to be equally attractive as well.
The overall objective must revolve around making a loyal shopper happy. Quite often consumers are overwhelmed with the restrictions around using their points, varying point structures, calculations featuring using points to redeem them for desired rewards etc. So how can pay with points simplify the redemption cycle, and make loyal members feel their points are worth it.
Interested in this topic?
Explore the same at the upcoming #MegaEvent2024 in Calgary, Canada (18-19 June):
By Ritesh Gupta, Ai Events
Follow Ai on Twitter: @Ai_Connects_Us
