Unlocking Value: Exploring the Benefits of Card-Linked Rewards Programs

Today’s digitally-savvy consumers love brands that deliver rich, seamless customer experiences. That’s why most customers shop with brands and merchants where they are members of rewards programs.

Among credit or debit card users, 65% shop with brands or merchants where they are rewards program members—and 4 in 10 consumers prefer cards with personalized rewards.

Not only do card-linked rewards programs provide economic incentives, but they also increase customer happiness and loyalty through personalized experiences.

What are the benefits of card-linked rewards programs?

Card-linked rewards programs allow businesses to reward customers automatically for everyday purchases made with linked credit, charge, or debit cards through highly personalized offers. 

Integrating item-level receipt data into product, marketing, and operations enables retailers to provide relevant rewards and card-linked offers at a category or product level. Essentially a consumer’s payment card is turned into a rewards card. 

Let’s delve into five key benefits of card-linked rewards programs and how they can transform your customer relationships.

1. Seamless integration: Card-linked rewards programs seamlessly integrate with customers’ existing payment methods, eliminating the need for additional rewards cards or apps. This enhances the customer experience, making it easier for them to engage with your rewards program without any hassle.
2. Personalized offers: By leveraging transaction data, card-linked rewards programs enable businesses to deliver highly personalized offers and rewards based on customers’ spending behaviors, bolstering the emotional connection between customers and your brand.
3. Real-time tracking: Unlike traditional rewards programs that rely on manual entry or scanning, card-linked rewards programs offer real-time tracking of customer transactions. This data empowers businesses to analyze customer behavior instantly, allowing for customized rewards strategies and offers.
4. Enhanced engagement: The simplicity and relevance of card-linked rewards programs lead to enhanced customer engagement. Customers appreciate tailored rewards and offers that align with their preferences, driving them to engage more frequently with your brand and make repeat purchases.
5. Cost-effective solution: Implementing card-linked rewards programs is an economical solution for businesses. Because card-linked rewards programs have lower infrastructure and operational costs than traditional ones, businesses can allocate resources more efficiently while continuing to deliver value to their customers.

Explore these popular card-linked rewards programs

In today’s competitive market landscape, modern businesses are always looking for new ways to strengthen customer loyalty and drive growth. Card-linked rewards programs allow businesses to elevate the customer experience and position their brand for long-term success. 

Here are several popular card-linked rewards programs:

Amex Offers: American Express offers card-linked deals where cardholders earn credits or bonus points by using their Amex card at participating merchants.

Chase Offers: Chase provides card-linked deals to its cardholders, allowing them to earn cash back or rewards points for qualifying purchases.

Uber Rewards: Uber’s rewards program is linked to the credit card used for Uber rides. Users redeem points for ride discounts, Uber Eats credits, or elite status benefits.

Dosh: Users link their credit or debit cards to the Dosh app and automatically earn cash back at participating stores without needing to scan receipts.

Finfare Money: As a cardholder, customers are automatically enrolled in the Mastercard Easy Savings® program—offering 4% on dining, 1% on vehicle expenses, 4% on lodging, and 2–20% on merchant services.

How do card-linked rewards programs grow customer retention?

Card-linked rewards programs play a crucial role in growing customer retention, repeat purchases, and overall brand loyalty. In fact, 73% of credit card users prefer using cards that offer personalized rewards rather than general cards. Here are five ways these programs contribute to customer retention:

Incentivized spending: By offering rewards, cash back, or discounts for using a specific card at partner merchants, card-linked rewards programs encourage customers to continue using their cards for purchases. 

Personalized offers: Many card-linked programs leverage customer transaction data to deliver personalized offers and rewards. Tailored promotions make customers feel valued and understood, leading to higher satisfaction and loyalty.

Seamless experience: Card-linked rewards programs require minimal effort since rewards are automatically applied when customers use their linked cards at participating merchants. There’s no need to scan receipts or enter promo codes. 

Value perception: Customers perceive added value in card-linked rewards programs due to the tangible benefits they receive, such as cash back, discounts, or exclusive offers. This perception of value strengthens the customer’s connection to the brand.

Engagement opportunities: Rewards programs provide customers with targeted communications, exclusive promotions, and special events. These interactions deepen the customer’s relationship, increasing brand loyalty and retention.

Boost brand loyalty with a card-linked rewards program

A well-designed rewards program sets businesses apart from competitors and enhances brand perception. Customers are more likely to choose and remain loyal to brands that offer meaningful rewards and benefits through rewards programs. 

A recent study found that 50% of millennials and 49% of consumers with children are likely to switch to merchants offering product-specific card-linked offers programs. Now let’s dive deeper into the business benefits of card-linked rewards programs.

Lower customer acquisition costs: It costs almost 7 times more to acquire a new customer than it does to retain a current customer. Plus, a 5% increase in retention can lead to improved profitability of 25%—and potentially a 95% increase in profits. 

Increased Customer Lifetime Value (CLV): The CLV is a metric that calculates the total value a customer brings to a business over the entire duration of their relationship. 

Higher Average Order Value (AOV): Loyal customers already trust your business, so they make more frequent purchases, spend more per transaction, and are less price-sensitive. They are also more likely to explore premium-priced products.

Improved data insights: Card-linked programs generate valuable data and insights about customer spending behavior, preferences, and trends. Businesses can leverage this data to make informed decisions and tailor better offers.

Word-of-mouth referrals: A compelling rewards program can attract new customers and encourage existing customers to refer friends and family. Word-of-mouth referrals from satisfied customers can lead to organic growth.

Increased sales and revenue: Rewards programs drive incremental sales by incentivizing customers to purchase more to earn rewards or reach higher rewards tiers. This boost in sales contributes directly to revenue growth for businesses.

Rewarding customers rewards businesses with sustainable revenue

Today card-linked rewards programs are a popular and successful method used by businesses to engage and retain customers. As many as 84% of consumers say they’re more apt to stick with a brand that offers a rewards program. Plus, 66% of customers say the ability to earn rewards actually changes their spending behavior. 

These modern rewards programs improve customer retention by providing repeat purchase incentives, instant gratification, and ease of use. Ultimately modern businesses benefit from increased customer lifetime value (CLV), higher average order value (AOV), word-of-mouth referrals, and revenue growth.