Phoenix Synergistics: Rejuvenating Reward Programs for Financial Services
Rewards programs in the financial services market have been around since the mid-1980s when credit card rewards first appeared. Soon rewards became so pervasive that cardholders began to see them as a basic, expected feature of credit cards. Checking and debit card rewards programs followed and had some success in developing and strengthening customer relationships.
Overall, credit card rewards adoption continues to expand. Debit card rewards suffered a major setback in 2011 when federal regulations capped debit card interchange fees, and many FIs responded by downsizing or eliminating debit card rewards programs. Some providers have introduced balance-based or relationship rewards that can be centered around the checking account relationship. However, these programs have yet to become widespread. Many financial institutions are again at a crossroads and need to carefully evaluate the economics and the appeal of rewards programs.
To level up their rewards marketing, providers must move beyond the one-size-fits-all approach. One of the most attractive options in the marketplace is customization, yet recent research by Phoenix Synergistics reveals that few consumers can customize reward offerings despite the appeal of this feature. Online rewards account management can offer customers a host of features and apps that enhance and strengthen rewards programs. Providers will need to think outside the box to develop rewards programs that attract, maintain, and strengthen customer relationships.
This study evaluates the consumer perspective on rewards programs for financial services, including credit and debit cards and checking.
National survey – The survey will include 2,000 online interviews with consumers age 18 and older.
Clients will have the opportunity to review the questionnaire and provide comments. The cut-off date for client input is October 30, 2020.
The final report, available in late March 2021, will present results of a Phoenix Synergistics in-depth analysis of national survey results. It will feature a Strategic Insights commentary examining consumers’ attitudes about, usage of, and appetite for financial services rewards programs.