Despite Consumer Demand, Less Than Half of Businesses Offer Rewards Programs
According to new research from Blackhawk Network, 47% of U.S. businesses now offer rewards programs. While that may seem like a high percentage, it also shows that a majority of businesses are missing out on this customer engagement opportunity.
Among businesses with rewards programs, 87% said their programs were highly valued by customers. In addition, 79% said the rewards program had a positive impact on their business, and 88% reported increased customer loyalty.
A separate study from Blackhawk Network revealed that 87% of consumers participate in at least one rewards program. On average, consumers are enrolled in six rewards programs but only actively use four of them.
Prepaid cards were the most sought-after rewards option from both the consumer and business surveys. Businesses also reported that digital rewards successfully motivated customers, but consumers were divided about their digital preferences. Overall, consumers seem most drawn by a mix of physical and digital rewards opportunities.
Most importantly, consumers say they want easy, flexible redemption options for their rewards. Consumers want to redeem their rewards for most categories well before they hit the $100 in rewards earnings, except when it comes to hotel or airline rewards.
Some businesses are responding to this demand for flexibility. For instance, Starbucks recently revamped their rewards program to provide more redemption options. Customers can now cash in as few as 25 Stars, which is relatively easy to achieve with a 2 Star/$1 rewards rate.