Have you heard of loyalty scheme redemption reticence?
Are you aware of the number of unclaimed B2C loyalty points there are out there?
Or of the potential pitfalls and benefits of reward expiry?
Recent research has shown that there is $6m worth of unclaimed points floating around in B2C loyalty programmes ... that's a lot of money that retailers need to account for and which, if they either don't have an expiry date system in place or they haven't accrued for this spend, could come as a nasty shock!
20% of loyalty scheme members have not redeemed any points in the past 12 months and 7% never redeem any points. How much value is there in the unredeemed loyalty points in your reward programme? What would happen if all of a sudden every member of your programme decided to redeem their points? Although it sounds unlikely, if you've not got a points balance expiry date in place it is a theoretical possibility. How would this affect your budget and your bottom line?
The easiest thing to do is ensure you have a points balance expiry date in place. Ideally you'll have done this at set up, but if not - and you're now in a minor panic about unredeemed points - introduce one mid-scheme by flagging the introduction of an expiry date when sending out monthly balance updates or enewsletters. Put the onus on the scheme member to spend their points by x date or risk losing them.
The other - extremely important - consideration when setting up a reward programme loyalty scheme is to accrue for the value of the scheme at the start. Putting a value on the cost of the scheme and accruing for it will mean that it is taken off your bottom line as per standard accountancy procedures AND, and this is a great AND, should points not be redeemed before the expiry date the value of these will revert to profit. Happy days!
Air Miles (the previous scheme to Avios) introduced a 2 year expiry and reportedly saved £500 million accrued liability!
It's time to ensure that there is an expiry date in place or that your loyalty programme accrues for non-redeemed points up front?
If not, you could either be caught out with a big bill or, if points aren't redeemed, your bottom line could look healthier than expected. Contact us today to find out more and how we can help you make the most of your brand loyalty.