Salt Lake City, Utah, October 8 / PR Newswire— In July 2005, Access Development partnered with Zions Bank to introduce Zions Cash Rewards—a revolutionary merchant—funded rewards program designed to competitively differentiate Zions' bankcard portfolio and build cardholder loyalty.
On the program's third anniversary, debit card usage is up 6% annually, new account acquisition has risen 7%, and the cardholder attrition rate has decreased 26%.
"Zions Cash Rewards has proven to be a very cost—effective, high—impact solution for bolstering the performance of our bankcard portfolio," reports Cynthia Smith, SVP, Bankcard Operations at Zions Bank. "It's a powerful tool for driving cardholder engagement, without the significant costs of traditional loyalty programs—which is a huge benefit, especially in the current economic environment."
"The key to this program's impact is the combination of unrivaled value and daily relevance," said Smith. Over 30% of participating merchants have a 50% cash—back offer, and the average earned reward is 10%. Plus, with more than 1,500 participating merchants in the bank's Utah and Idaho footprint, customers can easily find savings opportunities in their local area.
According to Kelly Passey, EVP, Loyalty and Incentives at Access, his company's merchant acquisition strategy is a key differentiator when compared to other merchant—funded rewards programs. "The vast majority of cardholder spending takes place within 20 miles of one's home. That's why we focus primarily on contracting with relevant merchants where cardholders shop on a daily basis. As a result, we are seeing more of the everyday purchases put on the card."
Zions has also experienced an 11% lift in the average debit transaction size at participating merchants compared to portfolio average. Passey attributes this to the automatic cash redemption factor, citing industry studies that found those who redeem rewards spend over three times more than non—redeemers.
Traditional issuer—funded rewards programs require a delicate balance between promoting redemption and managing a sufficient level of non—redemption in an effort to mitigate accrual liability and maintain a financially viable program. Conversely, the Access model, as implemented with Zions Cash Rewards, is focused entirely on driving usage. Cash rewards are paid automatically each month, providing customers with a constant reminder of the value their bankcard delivers and a real incentive to use that card again and again.
"Our rewards model keeps the bank, the merchant and the customer constantly engaged to reinforce loyalty and drive spending," said Passey. "The Zions Cash Rewards results show the power of the Access Development merchant—funded solution in a way that promises to build the bank's revenue for many more years to come."