Could Credit Card Perks be the Key to Your Consumer’s Heart — and Wallet — in 2021?

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As the country creeps closer to a post-pandemic world, spending habits and expectations have changed. Does the biggest opportunity for financial services brands in this new landscape lie in beefed-up brand rewards programs?

Consumer spending plummeted 7.5% in March. It was the steepest monthly decline in the U.S. Department of Commerce’s 61-year history of record-keeping. Ten months removed from that remarkable stretch, however, consumers are looking forward to a period of recovery. 

Still, the pandemic has undoubtedly had an effect on the consumer relationship with brands. Spending habits have changed dramatically and, thus, so have expectations.

The brands that can most quickly pivot to meet those new demands will be in a prime position to capitalize — in a market where consumer savings are higher than they’ve been in nearly 40 years. And among the many trends sped up by the crisis was the transition toward a cashless society. There was nothing short of an e-commerce revolution last year, with digital transactions skyrocketing. 

Credit cards became incredibly important. For financial services companies, in particular, one of the best opportunities lies in credit card rewards programs.

According to a Suzy survey conducted in January, 26% of U.S. consumers surveyed said they registered for a new credit card in 2020. More than one-fifth of the respondents — 22% — said they’ll sign up for a new credit card this year.

It’s no surprise that these consumers value the perks that come with credit cards, particularly those tied to a brand.

Three-quarters of the consumers Suzy surveyed said they have tried to capitalize on their credit card perks. Half of them indicated they used cash-back perks. Furthermore, 31% of respondents said they leveraged credit card membership discounts.

“These are pretty dominant areas of opportunity,” said Suzy’s President Avi Savar during a recent webinar, State of the Consumer: Money Matters: How Consumer Spending is Shifting in 2021. “Credit card companies and financial services companies are seeing areas to engage, especially when the typical rewards-based models — which have been, predominantly, travel and hospitality — seemed to have gone on the backburner.” 

These organizations, Savar added, are “trying to revamp their loyalty rewards programs to take advantage of other areas.”

If brands can come up with compelling new perks through their credit cards and other financial services, there’s a good chance that consumers will welcome them. Even with the majority of consumers already capitalizing on their perks, 47% of Suzy survey respondents said they still could be improved upon. One-third said they’d like to see enhanced flexibility within their perks.

“Even though it’s a key driver of their behavior, they’re craving and they’re yearning and they’re wanting more,” Savar observed of rewards programs. “It’s a key driver of why they appreciate the relationship they have with their credit card companies and their financial service institutions.”

Consumer perks help to cultivate an “emotional connection” with a brand, Savar continued, creating “an entirely new definition of the word loyalty.” 

That loyalty, Savar added, is morphing into enhanced utilization of the credit cards, buoyed by either an expansion or redirection of available perks to areas besides travel and hospitality. Chase Sapphire, for example, recently began to issue bonus rewards on grocery purchases and partnered with Peloton on a statement-credit program tied to new Peloton membership. 

Suzy asked consumers how they felt about the expansion of rewards, and they responded with words like “excited,” “thankful,” and “relieved.”

“If you are a brand and you can elicit these responses from consumers then you are doing something right,” Savar said. “You are addressing major pain points in the population. You are tapping into behaviors that are resonating with consumers and you’re creating value, which, at the end of the day, builds brands.”

For much more information on how brands can address consumer expectations in a post-pandemic landscape, watch the entire webinar at Suzy.com.