NAPERVILLE, Ill.-Is your loyalty program serving your credit union's business objectives or the goals of the card processor?
Matthew Martorano, VP of sales for loyalty marketing provider Consumer Benefits Services here, said it's a question every credit union with a loyalty program must ask itself. Martorano recommends that credit unions look closely at their own goals to make sure they align with their loyalty program's structure. And if they don't, go with a program that offers greater customization.
"The problem credit unions run into is they often use the third-party relationship that the card processor has for the loyalty program," Martorano suggested. "That's fine. But sometimes those programs are fairly generic and offer little flexibility. They are usually there to achieve the goals of the processor. It's not a customized solution to meet the credit union's goals, such as driving core deposits or cross-selling."
Martorano recommended that credit unions evaluate their business to determine key goals and build a loyalty program to support them.
"With a customizable solution the credit union has the unique ability to alter point values, increase redemption thresholds, and do special promotions," Martorano suggested. "Bonus points can become the credit union's currency. For example, to promote auto loans they can give two additional points for every $500 borrowed."
To structure loyalty programs, Consumer Benefits Services takes a "consultative approach," Martorano explained. "We've been doing this for 15 years, so we're not taking a stab at it. We work with the credit union on a program that meets their specific needs. Credit unions also have the ability to easily make alterations and tweaks as they go."
Martorano reminds that loyalty programs should be more about changing behavior than simply providing incentives. "It's about incentivizing profitable behaviors."
For its service, Martorano said Consumer Benefits Services charges between 80 basis points and one percent per transaction for credit cards, and between 25 to 32 basis points per transaction for debit cards.
