This special webinar session features special guest expert Stephen Bailey, Head of Propositions at TopCashback, where we cover the status and latest industry insights on global loyalty reward programs.
Watch the show for:
- 2023 research overview and survey findings (2:06)
- Key insights on what rewards consumers actually want from loyalty programs (6:55)
- Insights on what motivates members to switch programs (12:22)
- TopCashback Case Study (24:52)
► Read the full transcript of this webinar below.
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Kristen Kenner 0:00
Ok, so, good morning. Good afternoon. Good evening everyone. Thank you for joining us for our 2023 State of Loyalty Rewards Runa session.
It's gonna be a really, really great one. I'm excited to present this to you all. We have two experts on the call today who are going to be talking about some great loyalty industry insights and I think everyone's gonna walk away having learned some really, really great takeaways.
So speaking of our presenters, first up, we have Runa's own Brendan Miller. He's our Chief Marketing Officer here and we're also joined by special guest, Stephen Bailey. He is a loyalty industry expert as well as the Head of Propositions at TopCashback. Without further ado, we're gonna jump into today's agenda.
And first, we're just gonna start off by going over some of the key insights from the latest loyalty industry rewards and research that we did. We're gonna talk about some consumer perspectives, that's gonna be a really, really robust session.
Then we're gonna segue into the case study on TopCashback, excuse me, and how they expanded internationally to achieve one of the most profitable days ever.
And then lastly, we're going round out with those key takeaways on how you can work to build a successful loyalty reward system at your own organization. So without further ado, I'm gonna pass it on over to Brendan Miller, who's gonna kick us off.
Brendan Miller 1:15
Thanks Kristen. Great to be here and great to be here with you, Steven as well. I'm looking forward to this conversation. Just a little bit about the methodology of the study this study was done in March of 2023.
This data was analyzed in April and we published a study in late April/early May of this year. So it's hot fresh off the press, as I like to say. It was an online survey.
We surveyed 900 consumers across all different cohort groups in Germany, the UK and US. So it was evenly split between 300 in Germany, 300 UK, 300 in the US. And we have published the report. It is on our website. I'll show you at the end where you can get that on Runa.io.
So let's just get right into it, Steven, and dive into some of some of the results.
2023 Research Overview and Survey Findings
Key Finding: Meet Participants Where They Are
And so the first key finding was to meet participants where they are/ where they're going. And loyalty program members/cashback members are seeking rewards from places they frequent the most.
Makes a lot of sense. Supermarkets bubble to the top here across all three geographies and the light green is the average. But the dark green is Germany. Yellow is the UK. Light blue is US.
And nearly 75% of consumers said they want to earn rewards from grocery stores or supermarkets, cashback apps placed in second here. And then it kind of went down to retailers, coffee shops, restaurants where consumers frequent.
There was some unique differences amongst different geographies or locales. One that popped up here is gas stations. In the US, it is more popular to earn rewards from gas stations. I think that probably has a lot to do with the amount of US drivers and the amount of times they need to fuel up. And there tend to be more miles driven by consumers in the US.
And then, credit cards, 41% of US consumers said credit card rewards were important to them and that's where they look to earn rewards. And that makes a lot of sense. We have higher interchange rates. So rewards programs in the US for credit cards tend to be richer than they do, say, in the EU and in the UK.
But I wanna go back to this cash back. Because this was actually a surprise to me. I think in the data. Steven I’m really glad that we have you here because hopefully you can tell us more why you think this is.
But these cashback apps seem to have some sticking power with consumers. So just want to get your sense on why the popularity.
Stephen Bailey 4:06
So one of the most important and hardest things for a cashback company to achieve is consumers understanding what is cashback and how does cash back actually work.
So once they understand how it works. They get cash back on purchases that they make. Once they understand that it is free money. That there is no catch. They are going to get the reward. Once they understand that they become an advocate really for cashback.
They understand that when they purchase, they will get the deferred payment. Obviously, with a lot of cashback, it isn't instant gratification. It's delayed gratification. A lot of consumers are suspicious of that at first. But then once they understand that it's genuine. They come back time and time again.
We see this through all of our channels. We have, obviously, the website that you can use on a desktop. We have a mobile site. We have our app. And growth in our business really has come from having a broad range of brands with a broad range of products on our website.
We also have some of our own TopCashback branded products. So in the UK, for example, people can compare quotes for car insurance, home insurance, pet insurance. Or they can do things like compare broadband deals.
And the cash back is earned on top of all of those deals through our site. We find once people trust us and they're in the cash back in our cash back ecosystem. They then come back time and time again to use us and their reward pop builds up and up and up.
Brendan Miller 6:10
Yeah. And would you say so they're getting consumers are getting more utility than just cash back, right? It sounds like there's some comparison work that they can do and they can do some discovery beyond just getting a simple reward. And so you're adding some additional utility there with some of your products.
Stephen Bailey 6:31
Yes. And when people use those products, they tend to then be more active and remember to come back and use us for the little purchases as well.
Yeah. Yep. Well, great. We'll move on to, to the next section here which is another
Key Finding: The Right Rewards Are Key To Retention
We have a couple slides on this. And we ask consumers across all three markets where they earn their rewards. Or what (rewards) are preferred? And what types of rewards are they earning?
And so across all three markets:
- Gift cards (open loop as we like to call it) from Visa Mastercard scored well. 21% said they prefer this. 28% said they've earned these in the past
- Gift cards for specific retailers. 17% prefer this. 44% said that they have earned these in the past.
- Discounts on products and services 49% said they've earned it. Only 15% said this is their preference.
And then as you go down the line here, you can see different forms of gift cards and other reward types. But I think where the data gets a little bit more interesting here. It is when you can break it up by market.
And there's some nuances amongst what rewards consumers want in each market. So you can see here:
- American, or US, consumers are looking for an open loop product. 30% said they prefer that as a reward.
- 20% in the UK prefer branded gift cards. So a closed loop gift card is for many UK earners and rewardees.
- And then if you move over to the right here you see some differences, German consumers were preferring discounts, special discounts on products 20%. This kind of stuck out.
And then also German consumers were looking for what I'll call emerging alternative rewards and things like crypto, stock shares. NFTs. That sort of spiked there for the German consumer.
So I think this is interesting. There is reward redemption, unique differences amongst consumers in markets. Steven, you are in the US and UK markets, I guess from your perspective, are you seeing differences? Do you have to have an open loop product in the US or are there other ways to do it?
Stephen Bailey 9:17
So I think we kind of mirror those trends.
What we found in the US is that if we've got specific brands that people are really interested in (and) we promote it at the right time in the right place and we have the right bonus value, we can shift that consumer behavior to taking a specific branded card.
But it does have to be the right brand with the right rate. In the UK, we tend to find that people are more open to taking a branded card. They seem to have more of an idea of a retailer that they would like to have a card for. And they will take that card over a lower value open loop more easily.
But we do see the uptake of specific brand cards in the US, as I say, if the rate is, is good enough. So it isn't that it's impossible. It's just a little bit more difficult than a UK consumer.
We launched a site not too long ago in Germany, but we haven't moved into gift cards yet, but that is something that we're looking at. So crypto, stocks and NFTs aren't something that we are currently doing. But as the market changes, if we see demand from our members, so we call our customers members, they're a member of TopCashback.
If we see that demand or we get asked through our customer services, is it possible to pay out to crypto stocks or NFTs? That will be something that we will probably look to do at some point in time.
Brendan Millar 11:13
Yeah. Yeah. I think one of the things that we see is, on some of these emerging reward types, is if the consumer is already into that type of product—(if) they're a trader of crypto or they're using crypto or collecting crypto or collecting NFTS (and) those types of things—they have the interest.
But if they're not into that space, they're not into those types of rewards. Or they're not looking for that reward and have a preference for other things. So, yeah, I think that's where we feel it's slightly different to trying to move a consumer from a generic card to a specific brand.
I think that's easier than trying to move a member into crypto or stocks and shares if they just don't have an understanding of what they are.
Stephen Bailey 12:04
So I think there is a certain amount of niche to crypto stocks and shares and particularly NFTs. But it is something that if we feel the demand is there, we'll probably look at how we can service that to our customers.
Brendan Miller 12:22
Yeah. Right. The next finding here
40% of program participants would consider switching programs for a better rewards catalog.
So we asked the respondents, what would be a motivating factor to switch from one program to another? And so 40% said expanding that rewards catalog to have more retail gift brands. That was the number one reason. 40%.
39% said more local and small business gift cards. Better experiential rewards offerings like travel tours or spas was at 33%.
But again, I think you have to look at the market and also look at the different consumer cohorts that are in each of those markets and consumers are very different. And so that's what we did here. We broke it up by age group and by market to really understand what different consumer cohorts were looking for in a rewards program.
And Germany actually was interesting (the preferences were) very similar across all age cohorts—more local and small business gift cards.
But the UK and US had a lot of differences. Younger consumers said more experiential reward offering like tours and spas and things like that. And small business gift cards.
45% in the UK there in the middle, older consumers, 51 and over in the UK liked more local and small business gift cards.
Us again, different. More selection of digital subscriptions like Netflix and Hulu, 52% of us consumers in that cohort 21 to 30 said that would be interesting.
And then older consumers in the US. Here we go again, more local and small business cards.
So there's a lot to take away from this slide. There's a lot of rich data here. Number one for me is you, if you're trying to appeal to a mass audience, not a niche audience, you've got to have this diversity of rewards in your catalog in your program.
But the local small business gift card, it kind of was a surprise to me or interesting to me. And I think it's an opportunity. If you're a small business, you could distribute your gift card program across platforms like top cash back and, and to get better distribution, get those presales. So there's a lot of benefits for small businesses to look at.
Steven you know, just to get your take on this one. Is this something that you've seen in the past or requests that have come in for, for more small business?
Stephen Bailey 15:06
Yeah, we see this not just through gift cards, but also through, some of the, the companies that we have on our website. We have, I think it's almost 5000 brands on our cashback website that you can earn cash back on.
So we do have a broad range of shopping habits if you like ranging from big well-known brands to much smaller niche brands. What we tend to find is that, particularly so, some of the demographics in the UK if they know the brand that they're looking for, if it fits with their lifestyle, maybe some of their personal values, maybe they want to support smaller businesses for whatever reason, ethical reasons.
We find that the consumers will come on to our site and they'll search for that brand and if the specific brand is there, then they'll purchase through them. It isn't necessarily always the highest cash back rate either.
If it fits with their lifestyle and their values and that's to say a smaller company that they want to support them they will, they will purchase. Having a really high cash back rate isn't always the main driver like perhaps it is with some of the bigger companies where members might wait until we've got a certain exclusive deal. Because it's more about the cash back rate than the brand.
So we see a real big mix of behaviors across our website and also for a lot of smaller brands as well. If you know, if they enroll on our website, it gives them the opportunity to perhaps get some reach that they wouldn’t ordinarily be able to drive themselves.
Brendan Millar 17:04
Yeah. I bet if you were to do a survey across small business businesses, they probably don't know, sites like, like and TopCashback exist and, or could cater to them if they could get more distribution.
So it's probably an awareness thing. And I think you're right there is, here in the US, there's been a lot of promotion of, you know, shopping at small businesses and what it does for local economies and that kind of thing. AmEx has had an ad campaign for years around that and you shop small and those types of things towards the holidays.
So I think there's also just a broader awareness of shopping at local businesses and what it can do to transform local economies and consumers are looking for those types of rewards.
All right. So we're gonna move on right to the next key finding.
Key Finding: Redemption Flexibility and Ease is Key
And 55% of loyalty program participants prefer rewards that can be redeemed when they choose.
So they want this flexibility. They want to make sure that the program is easy to understand and that they actually have a choice of a choice of rewards.
They're not locked into something and that it's easy to earn rewards. So I kind of look at this as make it easy to earn and burn. The most important feature of any rewards program to consumers was ease of earning rewards.
55% across all three geographies, additional discounts and coupons, ease of redeeming rewards. All very important, I guess this kind of sounds like a no brainer, Stephen.
It's like, yeah, make it easy to earn, make it easy to burn, but it's a lot easier said than done, isn't it? To make it there, there's always complexity in the back end and, and you guys are managing a lot of that complexity and it's hard to abstract some of that complexity sometimes for the consumer, which that's where it gets complicated, I guess.
What are some of the things that you guys think about when making it easy to earn and making it easy to burn some of those rewards.
Stephen Bailey 19:22
And I think as I said earlier, one of the most difficult things for any cash back site is earning the consumers trust that they will actually earn the cash back because it's a, it's an alien concept if it's new to you.
You can go onto a website, click through to a store, purchase something, and then you earn cash back on it. It's an alien concept for a lot of people. They think, well, this can't be real. You know, I'm not gonna get, I'm not gonna get the cash back.
If I buy this gift card, will I actually get the cash back from that gift card? It's all slightly alien. Once, once they understand that it is real and that is what happens. Then we find that a lot of our members are brand advocates for us.
So we've done a lot of TV, advertising over the years, various other types of marketing to just kind of drive home our sort of fairness message. Because we're about being fair to our members.
And our entire journey, we try to manufacture that to be as simple as we can. So you come onto our site, you find the company, the merchant that you want to purchase through, you click through, you do your shopping and we take care of the rest, your cash back tracks.
It basically goes into, I guess what you would call a bank account, a TopCashback account. And you can come on to the site very easily to see how much cash back you've earned.
And then when you come to pay out, it's very, very simple. You can either pay into your bank account.
We included PayPal on there a number of years ago because we know that lots of people are using PayPal. So that made it even easier directly into your PayPal account. And also we have an option for paying out onto a selection of gift cards as well.
So you can, you can shop at a retailer and earn cash back. And then when you come to pay out onto a gift card for that retailer. If we have that listed on the payout gift card more, and we offer an additional bonus as well when you come to pay out.
We find a lot of people that payout to gift cards. It becomes habitual. So it's a repeat action. They'll come on to the site, they'll either buy a gift card and get cash back or go to a merchant to buy an item and get cash back.
They understand that it's going to go into their top cash back account. Then they build that up when they have a value, they want to withdraw.
They have a look at the gift cards and then they'll pay out to a gift card. And get another bonus on top.
So the way that we've designed all of this is to keep it very, very simple to earn and then very, very simple to redeem your cash back value at the end of it. So it's very important that it's a simple process.
Brendan Miller 22:36
Yeah. And it's interesting that consumers, you're, you're getting that emotional connection with the consumer by offering them that bonus for the digital gift card, right?
And, and so that's kind of a surprise and delight sort of feature that they may not have realized that they could get when they go to do that, that payout.
So it, it, yeah, and I think one of the things that it's interesting, a lot of if you're a first party loyalty program, you're, you, there's probably trust in the, you have the halo of your own brand that's providing trust in that program.
But you guys don't necessarily—when you're starting out—didn't have that. But it's interesting to see. But is your growth through word of mouth?
So you trust your friends and family. So if you hear about this application or your brand through your friends and family, there's trust in that. And I think it's interesting to see that you guys also have done some TV advertising.
I've seen those ads when I've been visiting the UK and that brings around that awareness. And with awareness, you know, ultimately comes trust as well.
Stephen Bailey 23:41
Yeah. And we have it internally, we have almost a fairness mantra where we do treat all of our customers fairly. If there's an issue, we talk to them in a very sort of empathetic way.
We don't, we don't sort of try and pass the book. We will accept it if something hasn't gone well. So we always try and be very open and transparent and fair with our members. And we find that works for us.
We find that if a member has had an issue and we are honest with them about the issue, they can actually be turned into an advocate then. Because they've had a really good experience when something has gone wrong.
Brendan Miller 24:26
Yeah. Yeah. Well, that's a great segue because I wanted to talk a little bit more about you guys and what you do and some of the things that you guys are doing at TopCashback.
And I think people may be wondering how, what's the connection with that kind of thing. So we'd love to kind of give you an opportunity here to take the floor and just, just tell us more about your guys' program and what's unique about Top Cash back.
TopCashback Case Study
Stephen Bailey 24:52
Yes. So TopCashback was founded quite a number of years ago. We are a cash back website. Originally, you would come onto our website and purchase from a number of different merchants, a number of different stores and you would earn cash back on your purchases.
And that can get you to a certain size in the market in order to expand beyond that. There are other things that you can do to bring some growth. So as I mentioned earlier, we wanted to set up some of our own brand, own branded products, which is what I'm responsible for.
So we have a car insurance comparison home insurance, travel insurance, lots of different types of insurance products, all branded under the top cash back name, all offering cash back.
So that enables people to sort of feel safe in our ecosystem. They'll take the car insurance with us, the home insurance. If they've got a pet, they'll insure the pet through us when they go on holiday, they'll take travel insurance.
And then they come back to shop retail. So if they want to buy a shirt for, you know, £5 or $5 they know that they can earn a little bit of incremental cash back on top. So that brings them into our ecosystem.
What we also wanted to diversify into is all types of purchases and gift cards is something that was of real interest to us because it's such a huge market. We had a gift card mall before we started to work with Runa. But it wasn't a very big mall.
It didn't have a lot of cards on there. It was doing something but it wasn't really, it wasn't working as hard for us as we would like.
And we thought and had some conversations about maybe we build our own gift card more. We speak to gift card providers. But actually, the time, effort, resource, cost involved in doing that, was just too big.
So what we needed was a solution where we could pick it off the shelf, but with some bespoke to it, we have to be able to offer cash back. That's what we're about. So we worked obviously with Runa through how that cash back would work.
So when the discounts come, we present them as a cash back value. So we worked through all of that technical integration with Runa which was really easy.
We launched, I think it's about 18 months ago now and we've seen some fantastic results.
The mall is really good. We're constantly onboarding new cards. We put quite a number of new cards on a few weeks ago and we've seen some really, really good growth.
What we do from time to time is we promote. We have a promotional day where you can earn a bonus amount of cash back on a certain purchase. And we saw when we were doing this, that the gift card mall was doing really well.
So then we did some specific bonus days just for the gift card mall. And we had an unbelievable day, where we literally sold thousands and thousands and thousands of cards in one day, which was just absolutely phenomenal. Our members really saw the benefit.
They may not have known what they wanted to purchase from a particular retailer.
But because we had that bonus day, they bought the cards for the retailer. And I think a lot of people thought, well, I know I shop there so I'll figure out maybe exactly what I want to buy at a later date.
And that was just, we'd never seen a day like that in terms of volume before. And then we've repeated those days on a number of occasions and had very similar results where we were literally writing thousands upon thousands of gift cards.
So it's something that our members really react to. It's been, it's been great for, for me. This is a product which I really love. I think the gift card is a great idea. So it's been a fantastic experience so far and obviously working with Runa is very, very easy.
Sounds like a bit of a sales pitch now, but I like it when things are very easy. It makes my life easy when things are easy.
So the up time is always amazing. Very rare are there any problems with the mall. So this has helped me and helped TopCashback to really build out a much better gift card proposition for our members.
Brendan Miller 30:21
Yeah, that's exciting. We're glad to be a part of that journey with you and excited for, for more, more days like this ahead where we have some of those, those big, big wins. So thank you for that.
Well, we're gonna wrap it up here. But just a couple of things for you. If you want to download this report, it's called the State of Loyalty Rewards Report. It is on our website. You just navigate over to resources on Runa.io.
Go to the resource center and you will find this report to download. We also have The State of Employee Rewards And Recognition. So if HR rewards and recognition programs are more your jam, we have more research on that as well. And you can get both of those reports right there on a resource center.
So with that Kristen, I am going to turn it back over to you. I think you have a couple of announcements.
Kristen Kenner 31:16
Amazing. Thank you Brendan and thank you, Steven. As always, if you guys want to stay up to date with what Runa has going on, you can feel free to always check out our network and future change logs.
Those are public pages where you can see the new brands, the new features, the new products, all those sorts of things that we're adding to our platform. And on the right side here, if you're looking to connect with us and learn a little bit more about Runa head to Runa.io our contact page. You can reach out to us and a member of our team would be happy to see how we can best support you.
And now we're gonna transition into questions. There were a couple that came through the chat, a couple that came through ahead of even the webinar. So I'll read some out via the chat and some that I have on my end.
But again, feel free to plop them in there. Now, if there's something that you wanna ask our guest speakers, and I guess we'll start with our first question is so, this person says,
What do you think about offering gift cards versus discounts and coupons? Should companies be doing both either or is there one that's better?
And Stephen or Brandon, I'll leave it to you to decide who wants to take that one on.
Stephen Bailey 32:22
Quickly from our perspective, we like to offer a broad range to our members. so that we're not limiting choice.
Brendan Miller 32:33
Yeah, I would agree with that. I think it's gonna be dependent on the use case, specifically as well. I would say in general, consumers are expecting both and that's probably why they affiliate themselves with a cash back or a loyalty program.
And, gift cards work good. In certain instances, a rebate. (If) you want to store that value for a longer period of time.
Whereas a coupon discount may work to sort of motivate the consumer to purchase something that they had on their list of items to get or they were watching the price for that kind of thing.
Kristen Kenner 33:14
Amazing. There's another question coming through the chat that says:
Can a company offer cash back without the consumer making an instant purchase decision?
Have you guys ever come across an instance of that?
Stephen Bailey 33:26
Being the case for us, the cash back is linked to a purchase. So you would need to make a purchase. You can defer through the gift cards on what item you want to buy. If I'm understanding the question correctly.
So if you know you want to shop in a particular store, but you don't know what you want to buy yet. You can buy the gift card, you'll instantly earn the cash back. And then you can spend the gift card at your leisure.
Brendan Miller 34:01
Yep, we agree with that. And I think one of the things we were looking at too is to offer more specific product specific skew level items is a digital store of value.
So you could potentially purchase something ahead of time and get it delivered at a later point. So it could be specific to a SKU and something that we've been talking and looking at very closely.
Kristen Kenner 34:30
Amazing and I know we're running a bit over. So I'll just ask this one final question.
How do you learn what it is that your customers want? Is it through surveys? Is it through industry research? How best do you find out those insights?
Stephen Bailey 34:46
So for us, we can see that reflected in our trading figures, we know if we're doing something right? If we've had particular promotions, we can see that our member base reacts to that. We have done consumer research sometimes on specific questions that we want to ask.
Brendan Miller 35:05
Yeah, same for us as well. We have data across our platform where we can go in and look anonymously at our entire portfolio and see what markets, what people are redeeming in specific markets across the globe.
That's one of the benefits of working with us. And then we're continuously doing this research as well and looking at consumer preferences and that's giving us insights into the market as well.
Kristen Kenner 35:30
Amazing. Well, thank you again, Steven and Brendan and thank you everyone who joined us today. Everyone who did join live or registered will receive a recording of the webinar.
So keep an eye out on your emails for that. And as I mentioned, if there are any questions, feel free to head to Runa.io and contact us. Thanks everyone.
Bye bye bye bye.