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 REWARDS AND INCENTIVES WHAT’S NEXT? The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin OCTOBER 6, 2011.

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Presentation on theme: " REWARDS AND INCENTIVES WHAT’S NEXT? The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin OCTOBER 6, 2011."— Presentation transcript:

1  REWARDS AND INCENTIVES WHAT’S NEXT? The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin OCTOBER 6, 2011

2 22 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin Macro forces are changing the financial services landscape on many levels ECONOMY INNOVATION MEGATRENDSMACRO FORCES Generation “Ready Access” – customers prefer paying with “ready funds” (debit, prepaid, cash) Mobile Revolution – mobile technology is changing consumer behavior and payment business models Blurring of Online and Offline – most consumers want multi-channel experiences DDA Disintermediation – bank accounts are less critical to many payments innovations New Customer Information and Incentive Paradigms – data is enhancing rewards, deals and customer experience Open Platforms – customers expect interoperability and plug & play solutions REGULATION DEMOGRAPHICS

3 33 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin Emerging Players A range of new players are getting involved Traditional FIs & Processors Retailers Mobile Operators Handset mfgs. Social Networks Regulators & Consumer Advocates Alternative Payment Co’s Media/Digital Content Companies Informati on Companies

4 44 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin  Attracting new customers  Retaining existing customers  Incenting profitable behavior Use of low cost channels (ATM, online, mobile) Electronic statements Direct deposit Card spend Savings Relationship deepening/product cross-sell Incenting and rewarding consumer behavior is more important than ever

5 55 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin Broad-based programs reward a set of desired behaviors Examples: PNC Points BEHAVIOR-BASED PROGRAMS Rewards associated with spend at specific merchants that are funded in part or in total by the merchant Examples: Wells Fargo Earn More Mall, BAC Add it Up, RewardsNOW ShoppingFLING MERCHANT-FUNDED REWARDS Real-time ability to use accumulated rewards for purchases or benefits in the physical world via “virtual gift cards” or other POS redemption options Examples: Carlson Marketing Instant Mobile Rewards INSTANT POS REDEMPTION New ways to interact with customers and allow broader earning and redemption options in the context of specific segments Examples: American Express Facebook Points App and iTunes App and redemption; Best Buy/Citi Mobile App NEW CHANNELS & FLEXIBLE REWARDS A range of interesting models challenge traditional thinking

6 66 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin How has loyalty been impacted?  As Illustrated, there a great number of significant environmental factors— legislative, economic, behavioral, and technology-driven—that are impacting what a loyalty program needs to look like in the future.  The underlying purpose of loyalty programs remains, and, in fact, is stronger than ever—driving profitable customer behavior!!!!  Consumers expectations are high – What’s in it for me? Consumers want value and flexibility, choice and options. Consumers are also looking for control – instant rewards with long-term incentives – delivered up digitally.

7 77 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin  In light of all these market forces and heightened consumer expectations, what will successful “loyalty” programs look like in the near and longer term?  Ultimately the goal must be providing value in meaningful, targeted, relevant and profitable ways: Must address, in a targeted manner, the broader customer relationship and the behaviors desired. (Earn side of the equation) Must provide meaningful incentives to drive the desired behavior. (Burn side) Must utilize all available channels to engage the customer-relevant in both method and time. Must be YOUR program—built for you and targeted to your goals, now and in the future. Must contribute to profitability. Loyalty more relevant than ever…to the consumer

8 88 The “Rewards” of Keeping Debit Loyalty Programs Post-Durbin

9 99 Thank you! Questions Discussion Feedback For a free copy of today’s presentation email us at : info@rewardsnow.com Margaret Weichert Managing Director at Market Platform Dynamics Margaret.Weichert@marketplatforms.com Tim Kolk Principal and Consultant at TRK Advisors tkolk@trkadvisors.com Steve VanFleet President and CEO of RewardsNOW svanfleet@rewardsnow.com


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