Of all the metrics you could choose, the redemption rate is one of the most telling. It is a good indication of how engaged your customers are with the program and is therefore symptomatic of your program’s strength. In this paper, drawing on the global experience of Visa Consulting & Analytics, we offer some recommendations on how to optimize your redemption options.
A highlight in the calendar of anyone who closely follows the world of loyalty is the launch of The Loyalty Report, an annual survey published by Bond Loyalty in partnership with Visa. It is the world’s largest, longest-standing study of customer loyalty and engagement. Every year, a central theme is redemption. The 2020 edition concludes that redemption remains a key driver of engagement for any loyalty program, contributing 12% to overall satisfaction.
In this regard, The Loyalty Report is by no means a lone voice. At Visa Consulting & Analytics (VCA), where we work with hundreds of clients across several industries and geographies, we have seen that customers who redeem typically exhibit the highest customer performance metrics, including their net promoter score (NPS). Meanwhile, one of the most widely cited studies in the loyalty field suggests that redeemers will leave a company eight to twenty percent less than non-redeemers, with multiple redeemers having the highest reduction in cutting ties with a service or company.
Given its importance, redemption deserves to be prioritized in the design and operation of any loyalty program. It also makes sense to periodically review your redemption options, in order to ensure they evolve to reflect the changing needs and interests of your customers