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Financial institutions that have loyalty programs should focus on aligning rewards with the needs of specific consumer segments, suggest the results of First Data Corp.'s first consumer-loyalty study. The processor, which supports loyalty programs for more than 180 million cardholder accounts, surveyed more than 1,000 U.S. consumers in July for the study. Many respondents said they were frustrated with their rewards programs: 38% said their program offers rewards they cannot use, 37% said there were insufficient choices, and 33% said their program offers undesirable rewards. "The study really spotlighted the fact that consumer segmentation and analytics are very important to a rewards program, and that is overlooked a lot," says Ed Mock, First Data vice president of personalized marketing solutions. Rewards should be tailored to meet the needs of the various consumer segments, such as offering electronics rewards to younger members, he notes. The study results also indicate interest in debit card rewards, as 27% of respondents said they are members of a debit-rewards program. However, credit card programs remain more popular, as 76% said they were members of a credit card rewards program. In addition, consumers prefer cash-back rewards, the results suggest. Of those surveyed, 56% of credit card rewards-program members and 55% of debit card rewards-program members indicated they are receiving cash-back rewards.
