Are loyalty programs worth the cost? According to research by Citi, the answer is a resounding yes. As the company transformed its rewards program and analyzed customer preferences, it found that modern customers are more loyal and valuable when they participate in a loyalty program with a great experience.
Mary Hines, Head of Customer Engagement and Innovation at Citi Cards, aims to deliver a seamless experience across all customer touch points. Customer loyalty programs are critical, especially in the retail and financial services spaces. What started in the 1980s for airlines and was often viewed as an unnecessary expense is actually a powerful way to engage with customers. Citi surveyed 1,000 consumers and found that 89% are more loyal to businesses where they are a rewards member. Citi customers who redeem their points spend twice as much as customers who don’t redeem their points. That engagement and loyalty can make a huge contribution to customer retention and the bottom line.
However, not all loyalty programs are created equal. When Hines started with Citi in 2012, customers had to call the company or use a website to redeem their points. Now, the vast majority of customers redeem their points through a mobile app for intuitive and convenient access to their rewards. Citi’s research also found that 83% of consumers are more likely to participate in a loyalty program if they can access the program easily from their mobile phone. That number jumps to 94% for millennials.
In many ways, customer loyalty programs reflect customer experience as a whole. Customers want resources that are accessible and applicable. They don’t want to go out of their way or jump through hoops to access a loyalty program. They also want personalized offers. Citi’s survey found that 95% of customers who are enrolled in loyalty programs are more likely to engage if they can get personalized offers. Hines has made a push to partner Citi with other popular retailers so that customers can easily redeem their rewards points right where they already shop, including Amazon, Best Buy and 1-800-FLOWERS. Rewards redemption also varies around the world based on culture and customer preferences.
Customer engagement has a huge impact on loyalty. Providing a seamless and forward-thinking rewards program that is driven by digital can create a band of loyal customers who provide incredible value to a brand. Engaging with customers and getting more of their loyalty drives the bottom line and creates a company that customers are proud to be a part of.