Reward Choice Retains Members

Learn how Kobie’s data scientists used data analysis to prove that reward choice keeps members engaged in the program more than a single reward offering.

CHALLENGE

A national Client with a membership-based program wanted to reduce churn and explore cost-effective redemption options.

HYPOTHESIS

So Kobie set out to test a hypothesis that members who redeem more types of rewards or have a “mixed” redemption are engaged longer than those who redeem in a single category.

APPROACH

To achieve this, Kobie segmented the Clients’ members based on what they historically redeemed for and looked at retention rates among the different segments over a 2-year period.

RESULTS

The data confirmed the hypothesis. The Clients’ “mixed”?redeemers had?1-5%?better?retention?in?Year 1 and?1-9% better retention?but?lower reactivation in Year 2.

VALIDATION

To dig even deeper and test the hypothesis more broadly,?Kobie evaluated retention across FI?clients over a 3-year period based on?their redemption mix (cashback, travel,?e-certs, etc.) to understand reward redemptions and the connection to member engagement and loyalty.

Kobie’s analysis found that FI members who engage in multiple reward categories stay with the program for longer:

• 68% of cardmembers who mixed redemption options retained 3+ years in their program.
• This is significantly higher than any single redemption category, including cashback, of which 56% attrited within 3 years.

?Contact us to learn more!