“Consumers have higher expectations of what they’re going to get, ultimately, from loyalty programs,” he said.
In a nutshell, the proverbial earn-and-burn programs that have been a mainstay of commerce for decades no longer are satisfactory. Now, consumers want to earn and receive their rewards through a slew of different options and use cases — leading to points ubiquity, Covello said.
“Consumers have a lot of opportunity to speak their minds” about the usability and desirability of merchants’ programs, where social media provides a proverbial bullhorn, he said.
The ability to offer a broad range of options varies from organization to organization, from bank to bank, he said. Many firms may not have the financial budgets or wherewithal to reconsider the ways and means through which they offer rewards.
“They didn’t build the proper infrastructure from the ground up on day one,” he said. “Or they’re just not agile enough to execute on the ideas and the concepts that are important to these programs.”
The technology is in place, though, through providers and platforms — Engage People’s loyalty network among them — to help create a level of engagement and personalization that matches those expectations.
Although points redemption remains a mainstay of commerce, in the current inflationary environment, the consumers want to be able to use rewards to defray the costs of everyday spending, such as on groceries or gasoline, Covello said.
“When they are tightening their budgets, consumers will use their points on everyday items … And they want merchants to ‘speak to them’” about their daily, real-life needs, he said.
More brands are stepping up to meet those everyday spending expectations.
For example, Fiserv announced earlier this year that members of its uChoose program can now use card reward balances to buy gas. The offering is made possible via an integration with Engage People, which teamed with fuel rewards technology provider Velocity Logic.
The program allows uChoose Rewards members to redeem points on their fuel purchases at the pump, saving 50 cents per gallon, up to 20 gallons. The discounts off gas might be extensible to other use cases — even at the gas station itself — where consumers might be offered the chance to lower the costs of bread, eggs or milk at the station’s convenience store, he said.
The pay-at-the-pump discounts are the first step in lowering the cost of the customer’s total basket, he said. Offering the instance of a promotion with a sports energy drink and points redemption that could make the drink free, “that’s definitely where we want to go,” he said.
Asked by PYMNTS where the “optimal point” of presentation lies for offers to be extended, Covello said that offers should be seamless, transparent and should be presented at the moment of payment. Consumers should not have to change their habits or their behavior to see the benefits of the rewards offerings.
“It’s personalization, but you don’t even feel it,” he said.