Hui-Chen-Ivy Ng , pp. 103. MAM/Sektionen för Management, 2009.
The credit card market in Singapore is a concentrated one with local players and their foreign counterparts all vying for a share of the local market. Card issuers are constantly looking for new alternatives to attract new customers and entice existing ones to use their cards. At the same time, consumers are demanding more value from their cards. It is no longer sufficient for card issuers to compete on the basis of rates and charges alone. Reward program has emerged to be one of the solutions to create further customer value. Reward program has become so widespread that it is no longer considered a “bonus” to credit card holders. Instead, it has evolved to become a “requirement” in their choice of credit cards. As the expectation of reward program rises, card issuers have to take a step further by not only providing attractive rewards, but, customizing them to suit the different needs of their customers. Issuers need to adopt a market-oriented strategy to understand customers’ needs and preferences and capture them into the type of rewards to provide. The objective of this study is to explore the types of reward programs preferred by different demographic groups in the Singapore context. Reward programs are classified into the categories of “immediate rewards” versus “delayed rewards” as well as “monetary rewards” versus “non-monetary rewards”. A questionnaire was designed as a means to collect the primary data required. 179 respondents were involved. The findings of the study revealed that Singapore females are more attracted by reward programs as compared to Singapore males. In general, males prefer an immediate reward rather than a delayed one. There is no strong correlation between age group and preference for point accumulation program. Nor is there any strong correlation between income level and preference for point accumulation program. Air miles accumulation is the least preferred form of reward program among cardholders and cardholders in general are more attracted to monetary rewards than non-monetary ones.
These results will be of interest for card issuers to further customise their reward programs to suit the needs of their customers.