Research reveals Australian credit card use is motivated by loyalty rewards
Velocity Frequent Flyer, the loyalty programme of Virgin Australia, has released research into consumer attitudes toward credit card points and rewards programmes, to coincide with the Billion Points Giveaway campaign this month.
The research revealed that Australian credit card use is motivated by loyalty rewards, with more than two thirds of respondents saying they will make a decision to buy an item based on whether they will receive points. It also found that the most appealing loyalty rewards for Australians are frequent flyer points and store vouchers.
The research found:
- Two thirds of research respondents (68%) who have a credit card that earns loyalty points say they are more likely to use a service or purchase a product because they will receive points.
- The main reasons Aussie respondents are choosing to become members of loyalty rewards programmes are to accrue points that they can exchange for store vouchers (64%) and to accrue frequent flyer points they can use towards travel/flights (62%).
- The most appealing loyalty rewards to Aussie respondents are vouchers that can be redeemed in store (71%) and frequent flyer points that can be used for flights and upgrades (66%).
- Generation Y, or 20- to 35-year-olds, were the most point-hungry generation with 80 per cent of Gen Y respondents stating they are motivated to buy a product or service to earn rewards points versus 69% of Gen X respondents and only 57% of Baby Boomer respondents.
- Generation Y were also the most active users of their points, with one in four Gen Y respondents saying they redeem their points more than six times a year, versus only 18% for both Gen X respondents and Baby Boomer respondents.
The findings have been released to coincide with Velocity’s Billion Point Giveaway campaign which will see the loyalty programme give away an additional 15% bonus points to consumers who transfer their eligible credit card and flybuys points into Velocity Points before 31 May.
Velocity Frequent Flyer General Manager Commercial Partnerships, Business Development and Financial Services, Jeroen van Son said: “What came out strongly throughout this research is that Australians are genuinely motivated by earning loyalty points and overwhelmingly, they want to use them for flights and upgrades. We also discovered there’s a 29% gap between Australians who are aware they can transfer their credit card points into another loyalty programme such as Velocity, and those who actually have. This means a lot of people are missing out on getting something for nothing, which we know people love! But the Velocity Billion Points Giveaway runs until 31 May so there is plenty of time to take advantage of our generosity.”
Earning and redeeming rewards made easier
In addition to the 15% Velocity bonus, ANZ is offering a further 35% to its customers who transfer their points to Velocity – making a total of 50% additional points.
Up to one billion Velocity Points are forecast to be transferred throughout the month, equating to around:
- 24,000 flights from Melbourne to Hong Kong;
- 90,000 flights from Sydney to Melbourne; or
- 100,000 flight upgrades.
Velocity has also launched an innovative Points Calculator, designed to give members personalised insight into where their 15% bonus points could take them and how to transfer. The calculator enables members to select their current credit card rewards balance and summarises where those points could take them once converted to Velocity points, such as upgrades, Reward Seats or flight vouchers.
The research was commissioned by Velocity to better understand consumer attitudes toward credit cards and associated rewards programmes in the context of the Reserve Bank of Australia’s (RBA) upcoming move to cut interchange fees from 1 July 2017.
The study found that only one quarter of Australian respondents were aware the RBA has capped interchange fees, which has led to the majority of banks reducing the number and/or value of credit card rewards points they are giving to customers.
Velocity Frequent Flyer was also recently awarded Best Redemption Ability and Best Elite Programme for the Middle East/Asia/Oceania region at the 2017 Freddie Awards. It is the fifth consecutive year Velocity has won Best Redemption Ability. The Freddie Awards are recognised as the highest honour a loyalty programme can receive worldwide, with the winners determined by the votes of four million travellers and frequent flyer members.