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What good are loyalty programs if customers don’t use them?

Globally, there are $48 trillion worth of unspent loyalty points. $140 billion of those are within the U.S. It’s not easy to admit that the way we’ve been running loyalty programs has been ineffective, but the numbers don’t lie. 

Companies and financial institutions invest countless time and money to implement and scale loyalty programs– but what good are they if customers don’t use them? 

Consumers typically only redeem 30-40 percent of their reward balances in any given year, leaving the majority of their redeemable rewards behind. So why do all these earned and paid-for rewards go to waste, discarded and forgotten in the digital void?

Simply put: Consumers aren’t redeeming their rewards because they don’t see them as valuable.

More often than not, the time it takes for a user to navigate clunky and confusing UX to even find their rewards, then select a redemption that actually interests them (if there is one), can feel more costly to the consumer than what the reward is worth. 

While many speculate over different incentives and strategies on how to improve the customer experience, the fact of the matter is that customers are bored of traditional loyalty programs.

If you need more proof: 45 percent of loyalty program accounts are currently inactive, with consumers not tracking or redeeming points. Among the 43 percent of customers who do sign up for loyalty programs in the first place, 95 percent of them go inactive within 90 days. 54 percent of the remaining app-based loyalty memberships go inactive within a year.

Let’s face it– consumers are not motivated by traditional loyalty programs anymore. 

To the modern consumer, cash-back or points don’t feel significant or valuable enough. “Cash-back is king” some have said, until the pennies on the dollar stopped feeling valuable. In essence, cash-back and points aren’t exciting anymore due to their basic transactional engagement and their inability to promote an authentic connection between customer and brand.

While survey respondents considered traditional economic rewards (eg. points, cash-back) to be a top determinant of a loyalty programs’ success five years ago, those rewards now rank a fourth in importance, and are expected to fall to eighth in rank by 2025. On top of inflation devaluing these currencies’ worth, consumers have every reason to consider taking their loyalty to more prospective and exciting horizons.

Consider an incentive that actually matters to customers today.

Especially since the 2020 pandemic, loyalty has been more up for grabs than ever before, with 30-40 percent of consumers actively continuing to switch brands. Traditional loyalty programs are holding less sway over customers today when price and convenience are taken into account for budget-conscious consumers.

Bumped has been dedicated to cracking the loyalty code since 2017, and has found that stock rewards are an innovative means to engage new and once-inactive customers. In fact, 89 percent of Bumped users think stock rewards are more exciting than traditional rewards (e.g., points, cash-back). Stock rewards present more interest to customers because they have the potential to grow in value over time. Additionally, they pose as a safe and simple entry to the nation’s largest wealth builder– the stock market.

Plus, reports show there is a collective win-win for both sides of the relationship with stock rewards; brands, banks and customers succeed when individuals become owners. Beyond cultivating authentically compelling loyalty, ownership ultimately can have a meaningful impact on an organization’s bottom line:

  • The Columbia School of Business independently reviewed Bumped’s data and found a customer “spending response of 100 percent” in direct correlation to receiving stock rewards, pointing to increased customer loyalty.
  • Consumers who become shareholders increase their spending with the brands they own by 40 percent or more.
  • The Wise Marketer found 66 percent of survey respondents believe stock ownership increased the likelihood of buying an offering company’s product.
  • In a 2020 internal study, a top 20 U.S. bank found stock rewards resulted in a 348 percent increase in spend versus cash-back or points.

Advanced emotionally-charged, lifetime customer loyalty in conjunction with increased consumer spending and ROI has made stock rewards a no-brainer for many brand and bank partners already. On top of the possibility of stock rewards’ values increasing over time, customers can relish in the feeling that their favorite brands and banks are looking out for their futures with a reward that can last, too.

Thankfully, organizations don’t need a complete overhaul to make their loyalty programs worthwhile for the modern customer.

Bumped built the first B2B technology platform with an underlying brokerage to enable brands and banks to use our prebuilt set of technology tools specifically designed to reward in fractional shares of stock. Our suite of APIs is strategically tailored to give organizations the ability to leverage our technology and services to reward their customers with fractional shares of stock. 

Empower your customers as shareholders by offering a reward that actually matters to them– and your business. Reach out to our team at to learn how building an ownership economy with Bumped can elevate your loyalty program to the next caliber.


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