How Financial Institutions Build Loyalty Through Travel Redemptions
Travel rewards have become increasingly popular with financial institutions to incentivize customers and increase loyalty. For consumers, loyalty rewards points provide “guilt-free” spending that can be used to fund their next travel adventure.
Almost three-quarters of Americans have a credit card that offers rewards, and 45% of rewards cardholders say their credit card usage increased during the pandemic. A financial institution partner on the RAZR platform saw their customers who redeemed for travel increase their spend by 231% over those customers who redeemed for cashback. By offering travel rewards, they can benefit from the increased consumer spending (otherwise known as “top of wallet” spend) and redemptions to drive longer-term loyalty.
How can financial institutions build loyalty through travel redemptions?
Make them available and accessible to all:
Making rewards travel available to everyone is a great way to create a point of differentiation in the marketplace and attract new customers. It’s also an effective tool to create a more meaningful connection between current customers and the financial institution, by providing them access to more experiences at an affordable price.
Highlight the value of travel rewards:
Given high inflation and recession fears, the value of rewards programs has increased exponentially. Consumers are looking for additional ways to save money, and redeeming loyalty rewards points for travel provides an excellent opportunity to stretch the purchasing power of their hard-earned points. Value for money is the most important factor when booking a vacation for 61% of all travel rewards program members. Travel rewards programs should showcase deals and depth of discount to meet the customer’s value expectations.
Offer flexibility and service, not just rewards:
Flexibility and convenience are key priorities to consumers who have banked rewards points. Top loyalty programs go beyond the expected offerings of airline tickets, hotel bookings, and rental cars. Financial institutions are now leveraging additional services such as loyalty ambassadors, customizable packages, flight tracking tools, and even insurance to build stickiness for their programs. There are even ways to simplify the booking process for the customer. Top-tier program partners (like RAZR) offer ways for members to plug in their airline loyalty info, TSA or Global Entry numbers, and more. It is also important that your travel rewards partner offers travel assistance, should problems arise while on vacation.
Push travel rewards in marketing communication:
Offering a robust travel rewards program is a growing opportunity for financial institutions to stand out. By focusing marketing communication efforts on promoting rewards travel, and travel-related services as a way for customers to get maximum value out of their loyalty points, financial institutions can capitalize on consumer behavior and create an edge over their competition.
With increased consumer appetite for travel, rewards wallets swollen from pandemic spending, and a potential recession on the horizon, now is prime time for travel-related rewards. What are you waiting for?