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Is "get now, earn later" the future of elite member rewards?

 

By: Ray Chelstowski

Consumers are continuing to embrace the idea of “buy now, pay later”. Though this type of payment plan has been available for years, it exploded in popularity during the pandemic as more people shifted to online shopping. Like its name suggests, "buy now, pay later" lets you make a purchase, receive it immediately, and pay for it at a later time usually over a series of installments.

You can now use a buy now, pay later (BNPL) plan at most major retailers and there are many BNPL providers that have emerged in the past few years. Some of the most popular BNPL providers include Affirm, Afterpay, Zip, PayPal's 'Pay in 4' and Sezzle. As consumers flock to them to finance everything from clothing to travel to workout equipment, those of us in the loyalty space are beginning as wonder whether this approach will cross over to how members should be approached and rewarded. That kind of loyalty innovation requires a more progressive strategy and can obviously carry risk. But applied properly it just may ensure future engagement and transactions. The concept is simple—strategically target program members that meet “get now, earn later” criteria, and offer them the ability to redeem “future earned” points; or top up their earnings for no cost, provided they earn the points for their redemption in a set period. That criteria could be based upon purchase cycle history, positive engagement triggers, seasonality and more. This isn’t something any brand would offer across their entire membership base. It would instead be targeted towards elite-level members with a proven track record as high earners and redeemers. The data that brands capture through program engagement can enable advanced analytics models that help determine who best qualifies for a promotion like this—as well as who would find it most appealing. Looking at the construct from a member standpoint, this should resonate with customers who have a high earning trajectory and want to use miles, points, or other loyalty currency to recognize the benefit of their loyalty to a company sooner rather than later.

For brands looking to maintain momentum from quarter to quarter, this advanced rewards approach can help them better set the revenue table, forecast with better conviction, and ultimately drive more engagement.

A “get now, earn later” approach to loyalty isn’t for every brand or every program member. It’s daring and comes with inherent risks that not every industry can swallow.  But remember this: loyalty research shows that when a member redeems, they almost instantly become more emotionally connected to the brand and tend to engage and earn more regularly. Investing today against a future purchase that data-driven decision making informs can very well be a well-placed bet that pays off in more ways that any brand can ever possibly track.

Ray.chelstowski@kognitiv.com

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