Every brand that puts their logo on a card aspires to have it used as much as possible. We explain the basics of building a card benefit strategy to incentivize the use of your card.
It seems like your business could benefit from launching a card issuing program to speed your payments flow and generate some revenue in the process? Have you already launched a card and need to know how to get people to use it? Well, launching a card issuing program is just a part of the challenge, every card program manager aspires to create a product that is considered the top-of-wallet in its intended use with the goal of maximizing its profitability. One way to ensure that is by designing a benefit strategy that incentivizes users to regularly use their cards. In this blog post, we will outline everything you need to know, do, and calculate to build a benefit strategy that promotes your card program and drives results.
Before designing a benefit strategy, it's crucial to define your goals. What do you want to achieve with your reward program? Do you want to increase user retention, attract new customers, or increase transaction volume? Defining your goals will help you tailor your benefit strategy to meet your specific needs.
Defining your goals is important for several reasons:
Let's say your goal is to increase transaction volume. One way to achieve this is by offering a higher percentage of cashback for users who make a certain number of transactions per month. By doing this, you're incentivizing users to use their cards more frequently, ultimately increasing transaction volume.
Next, it's essential to understand your customers' needs and preferences. What types of benefits are they looking for? Do they prefer discounts, cashback, or exclusive access to events? Conducting surveys and analyzing transaction data can help you gain valuable insights into your customers' preferences.
Here are some ways to get to know your customers' needs and preferences:
Let's say your customers are frequent travelers. In this case, offering exclusive access to airport lounges or discounts on travel-related expenses could be a compelling benefit that encourages them to use their cards more frequently.
Once you have defined your goals and know your customers, it's time to determine your budget. How much can you afford to spend on rewards and benefits? Keep in mind that the benefits you offer should be compelling enough to incentivize users without breaking the bank.
Here are some factors to consider when determining your budget:
Let's say your card program generates $10,000 in revenue per month, and you want to allocate 10% of that towards benefits. In this case, your monthly budget for benefits would be $1,000.
For card programs that are just starting and don't generate enough revenue to cover benefit programs, a good strategy is to offer sign-up bonuses and referral rewards. By offering a bonus for users who sign up and a reward for users who refer new customers, you can attract new users and grow your program. As your program grows and generates more revenue, you can gradually increase the benefits you offer. It's important to keep your benefit strategy aligned with your budget and business objectives to ensure long-term profitability.
With your goals, customers, and budget in mind, it's time to design your benefit strategy. Consider offering tiered benefits based on transaction volume or frequency. Users who make a certain number of transactions per month could receive a higher percentage of cashback or exclusive access to events. Sign-up bonuses or referral rewards can also attract new customers.
Here are some tips for designing your benefit strategy:
Let's say you want to encourage users to make more transactions. In this case, you could offer the following tiered benefits:
Finally, it's crucial to calculate the return on investment (ROI) of your benefit strategy. Are the benefits you offer driving the desired results? Are users increasing their transaction volume or becoming more loyal to your card program? Continuously analyzing and adjusting your benefit strategy will help ensure you are getting the most out of your investment.
Here's how to calculate the ROI of your benefit strategy:
Let's say you spent $1,000 on benefits and your revenue increased by $2,000 since implementing your benefit strategy. In this case, your ROI would be 2 ($2,000 revenue increase / $1,000 cost of benefits).
In conclusion, a well-designed benefit strategy can be a powerful tool to promote your card program. By partnering with PayCaddy, you can access expert guidance and comprehensive card issuing solutions that will help you achieve your goals. So, what are you waiting for? Start designing your benefit strategy today, and watch your card program's profitability soar!
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