DALLAS — Rewards programs have become such a key element of credit union card programs that TNB Card Services, the card processing and portfolio purchasing arm of credit union-owned Town North Bank, has produced a white paper detailing the their benefits and potential pitfalls.
TNB has made the paper, titled Winning with Rewards, available in an electronic version on the TNB Card Services Web site. It is the latest in a continuing series of papers focusing on the important payment issues facing credit unions.
"This white paper provides a thorough yet concise view of the rewards landscape and gives credit unions the foundation they need to begin a program that will help retain their best members and increase card usage," said Dusty Bowers, senior vice president and national sales manager of TNB Card Services.
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"As the cost of acquiring new cardholders and new credit union members soars, it underscores the importance of taking steps to retain existing members and strengthen member loyalty, as well as encourage usage of their cards and other credit union products," Bowers added.
Key sections of the white paper address current trends in rewards programs, providing credit unions a framework for understanding how their programs should be implemented in order to achieve a level of differentiation and become truly important to their member cardholders, TNB said. It also addresses the changing nature of rewards–how consumers have become much more selective today–and most importantly, provides a best practices approach to implementation.
The white paper also examines the benefits and costs of a rewards program, noting that across the board, rewards programs provide a significant lift in terms of card and other product usage as well as in average spending levels per transaction. In addition, Winning with Rewards provides useful, hands-on information to credit unions about how to properly target their rewards programs to gain the most from low-risk members, how to communicate the program benefits to members, and how and when to make their programs fee-based, the organization said.
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