Offering loyalty points or other incentives is a tried-and-true tactic to help merchants retain lasting customer loyalty. Doing so in a world where consumers not only have their pick of businesses, but their pick of payout options, can be difficult, however.
It is no longer enough for merchants to present customers with one way to interact with rewards programs and receive their funds. Consumers are using various emerging digital payment methods wherever and however they want and are asking for the same type of customizations regarding their rewards disbursement experiences, said David Leeds, CEO of eGift card and rewards provider Tango Card. The company offers customers the ability to receive rewards in various ways, most notably through its Reward Link product. This tool enables businesses to send consumers a single web link that allows them to choose how they want to see their funds disbursed.
“Really since [our launch], the range of choices is increasing dramatically, and we’ve added open-loop gift cards, Visa, Mastercard, etc., and now consumers are clearly saying, ‘Those are great, and we want other things,’” Leeds said. “‘We want the ability to add this directly to our mobile wallet. We want the ability to take a portion or all of the payment and deposit it directly to [our] bank account.’”
Meeting customers’ expectations for speedy and personalized rewards disbursements is becoming essential for businesses today, especially as more consumers turn online for the bulk of interactions with their chosen merchants. Offering consumers choice and maintaining the instant disbursement experience, regardless of how they want to receive their funds, can grant a critical advantage to businesses seeking to stand apart in the digital crowd.
The Growing Ubiquity of Instant Disbursements
eCommerce shopping has boomed in recent years as customers grow increasingly comfortable with digital payment methods, such as contactless cards or peer-to-peer (P2P) payments, both online and at brick-and-mortar stores. Today’s consumers expect their chosen merchants to cater to their particular wants and needs throughout every part of the experience, Leeds explained.
“If you’re a merchant and you’re not keeping up with the best in class, so to speak, it’s a problem because the expectations are there, the expectations are high, and people aren’t really willing to relax those expectations,” Leeds said. “If you are a consumer and you’re interacting with a merchant that isn’t easy to work with or [that] doesn’t match the modern digital experience that other merchants have created, you’ll just stop buying from them. There are just too many choices out there, and the cost of switching has been coming down over time.”
Whether merchants cater to online or in-person shoppers, giving consumers the experience they desire has always been a priority. The inherently instant nature of the eCommerce space means consumers’ tolerance for friction has dropped dramatically in recent years, a trend the pandemic has exacerbated. The same is true for the rewards space, Leeds explained, as individuals accustomed to instant experiences are now anticipating the same when it comes to incentive disbursements.
“When we shop online, we expect stuff to show up sometimes [on] the same day even if it’s a physical good, so there’s a much higher expectation [for speed] across our entire lives,” Leeds said. “And so, when it comes to [the] payments and rewards and incentives [space], it’s definitely not an exception. In fact, [the customer expectation is] probably heightened because if you earn $10 for doing something, you kind of expect to get it and be able to spend it right away.”
To keep pace with shifting customer wants, Leeds noted that Tango Card will be launching new disbursement methods as early as October. Ensuring a payout experience that fits precisely with what users are looking for is key as merchants work to keep up with the expanding array of available payment methods.
Keeping Rewards Disbursements Rewarding
Digital consumers are becoming less tolerant of friction points when interacting with merchants and can often become frustrated when retailers do not offer their preferred payment method. Ensuring recipients have access to their disbursement method of choice is therefore critical to maintaining customer loyalty, Leeds said.
“It’s still common for recipients to get a payment, disbursement or reward or incentive that is not particularly attractive to them, and it might be something that’s attractive to the sender for some reason, but it doesn’t really work for them,” he said. “So, we constantly work on our own product and with our customers to make sure that the choices that are available to the recipient are ultimately going to give them the maximum utility, the maximum enjoyment. There are a number of ways to do that, but a lot of that’s upfront education and making sure that the rewards and the incentives and the disbursements that are being sent, that there are reasons that those are going to be really attractive to the recipient.”
Keeping an eye on where and how customers ask to be paid is likely to grow more valuable for financial players and merchants in the future. Businesses must pay close attention to the growing ubiquity of instant payments to remain competitive.