Are rewards programs incentive enough?

A few weeks ago I received an e-mail from my bank, letting me know that, due to changing legislation, my debit card rewards program would no longer be rewarding me. Major bummer, dude! As of October 1, the program will be finished and whatever points have been accumulated must be redeemed.

Not wanting anything to go to waste, I logged on to check my balance and my eyes bugged right out of my head. You mean to tell me I had all these points, all this time, and I never did anything with them?!

According to data from Chicago research company Mintel, I’m not the only one who racked up points only to neglect them, as 47 percent of respondents who participate in a debit rewards program have never redeemed their points and most respondents didn’t see a rewards program as a reason to stick with or switch banks.

This also made me wonder about what other loyalty program points that I might have hanging out there – other credit cards? Frequent flier programs? I also take surveys as part of a research panel a few times a month but have never cashed in my points.

I love my bank. I love my debit card. I log on to the bank’s Web site several times a week to manage my accounts. So if a rewards program for a bank I am already interacting with on a weekly basis can’t keep me interested and loyal, what hope do research incentives have?

What kind of action can researchers and panel management companies take to ensure that their own “rewards programs” are being used and instilling loyalty? Do the points accumulate fast enough to redeem items that are valuable in the respondent’s eyes? Is the redemption process easy to understand and navigate? Are the incentives worth the trouble?

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5 Responses to Are rewards programs incentive enough?

  1. Syed says:

    The word satisfaction has many definitions and parameters. Incentive programs takes years to accumulate points [at least in canada] and seconds to deplete if u use them often. e.g. Airmiles and shell and other brands with airmiles. spend $20 and get one mile only. one gas full tank gets you just two miles. check what u can get, from your miles, you at least need 700 points for just one giveaway. The incentive is definitly not enough!

  2. Alex says:

    If everyone actually used all of their rewards, companies would go out of business. A lot of these frequent flyer, survey and credit card point programs assume that only 33% will ever cash in on the rewards. With some smart accounting they won’t even count these programs as a liability on their balance sheet. So, are incentives enough? The goal is only to make them small enough for peopel to take an action, but never high enough for them to “cash in”. In that case, yes, they appear to be enough. The question I have is when will consumers start demanding more for their time and loyalty.

  3. Pingback: Are rewards programs incentive enough? « Meyers Research Center: THE BLOG

  4. Gina says:

    Excuse me for being blunt, but rewards programs are put into place for the wrong reason. Companies without a true differentiator will tack on a rewards program to give themselves something to point to as a value enhancer. The way these programs are designed and delivered will neither make the brand stickier nor make the customer feel valued or “rewarded.” When you construct these programs focused on profit instead of the customer, you are building something irrelevant. Then you will spend a ton administering it and growing it, and celebrate when people don’t use it. Cycle of madness.

  5. Kaysha says:

    Some people are really into their points and they are into all sorts of programs – some of them even trade, buy, sell and barter points. Still others like yourself really haven’t taken notice until something like this happens. If a person takes the time to learn about it and investigate, there are some really great programs, offers and perks associated with these programs. My cousin got me looking into my credit unions own program recently. (I use a local credit union based out of Tumwater WA and they have a really nice little program). I haven’t heard any cancellation news from my credit union yet, but I’ve heard some big institutions are cancelling now. Maybe staying with a small and locally based banking institution is a good thing!