The fintech space is growing quickly. In 2018 alone, fintech apps were downloaded 3.4 billion times, signally growing demand for mobile-first user-friendly financial services.
But more demand means more apps — and more competition. Because of this, fintech apps are eager for ways to both differentiate themselves from the pack, give their users reasons to come back as often as possible, and increase revenue.
Enter rewards programs. These go by many names (cash-back programs, loyalty programs, etc.) and take on many forms, but essentially they’re a way to habituate users and give them more reason to come to your app more frequently. In the fintech context, users get rewarded when they use a fintech app to shop with partner brands. The fintech app then splits a percentage of their referral revenue with users.
Sounds great, right? The challenge with these programs is that, while they’re powerful ways to boost revenue and engagement, they’re not easy to launch. Here are a few things fintech’s should keep in mind when starting out.
Align your goal, strategy, and KPIs
As with anything in life, it’s hard to reach a destination you haven’t defined. A rewards program is going to take on a different form depending on what you’re optimizing for. For example, some fintech companies look to rewards programs as a new revenue stream. In contrast, we also work with fintech companies that want to build commerce into their apps not to make money, but rather to convince their users to engage with their apps more often.
Based on your goals, you’re going to pay attention to different things. If you care about loyalty, your KPIs are going to be repeat purchase rate and the lift in user engagement. If you care more about revenue, then you’re going to focus on metrics like conversion and order rate.
These decisions will define all parts of how the program is rolled out, including which user groups should be targeted, which partners and offers are chosen, and where the program is located in the app.
Make sure your users know your program and offers
Users can’t take advantage of a rewards program they don’t know exists. For a fintech rewards programs to be successful, it’s pivotal that it’s marketed to users the right way.
There are many ways to run this kind of awareness campaign, from newsletter blasts to push notifications. One of our UK fintech partners does this well. When users open the app’s main tab, one of the first things they see is offers from partner brands. Likewise, the company uses email and its social channels to feature partners and inform users about new offers.
The importance of marketing ties into what’s one of the biggest advantages fintech apps have when starting rewards programs. Because these apps often know where users spend their money, they’re in a powerful position to sign deals with relevant partners that they know users will engage with. And it’s important to make that relevance clear to users.
Know your resource constraints
Companies that set out to start their own rewards programs very quickly run into a hard reality that these programs are very hard to start and maintain. Here are three areas where companies often struggle:
- Technical constraints. Working with a brand partner can involve weeks of technical integration and data source reconciliation. That can be a significant undertaking for companies with smaller tech teams.
- Maintaining brand partnerships. Offering rewards from multiple partners requires building relationships, maintaining relationships, and negotiating rates with multiple partners.
- Managing tradeoffs over time. A rewards program isn’t something you can “set and forget.” Running them requires that product managers make constant tradeoffs between making their apps as good as possible, while dealing with the day-to-day requirements of running a rewards program. It’s a heavy lift.
Let Button help
Button is an end-to-end solution that adds seamless shopping experiences to your app. Alongside best-in-class technology, we offer access to top brands and dedicated services that provide a hassle-free solution. Get in touch with our team to get started.