5 ways to gain customers loyalty in finance

The internet and social media both have a tremendous impact on our behaviour, how we communicate and the way we make decisions. They open up a whole new area for doing business in e-commerce and online services.

Collinson Group recently conducted a survey of over 4,000 affluent middle class consumers to understand their buying behaviour and how it is affected by customer reward schemes and personalisation.

Over the last few years, banks have begun investing significantly in digital services, such as mobile banking and mobile payment and much more. Understanding the nuances in how consumers choose to use online channels is important in retaining clients. Here are five tips that all financial services brands should adopt to have a real opportunity to turn mass affluent consumers into powerful brand advocates.

1. Personalised service

Despite significant investment from banks in digital and customer systems, 29% of Chinese consumers still feel that their bank does not know or understand them, and a quarter do not feel they receive a high level of personal service. Personalised and consistent communications, rewards and service were all cited as important for the affluent middle class.

2. Recognition and reward

Our research found that not being rewarded for loyalty is the biggest frustration for affluent middle class consumers, cited by two thirds of respondents, ahead of poor interest rates and charging unnecessary fees. Many banks offer standardised, purely transactional loyalty programmes which rely on traditional points-based rewards and lack the emotional appeal to build loyalty.

3. Boosting loyalty is determined by the choice of reward

While banks still tend to think of rewards which relate to other financial services or points-based programmes, we are seeing companies in other sectors offer a wide range of rewards.

4. Simplify redemption

An effectively delivered digital experience has real potential to offer immediate rewards to valued customers and a common perception is that many current loyalty programmes make redemption processes too complex. Giving customers greater flexibility in how they access rewards will enhance the experience of a programme.

5. Real-time engagement

Social media and mobile services encourage an ‘always-on’ attitude and mean consumers continually expect fresh content from reward programmes. In return, financial service providers can track spend, understand who their best customers are, and motivate behavioural change. Customers realise value from frequent use of their bank card, and the perceived value of the loyalty programme is greatly increased.

Collinson’s research uncovered the fact that nearly three-quarters (72%) are willing to make a repeat purchase from a brand they feel loyal to, 70% would recommend that brand to friends and family and 53% will choose a particular brand even if it is more expensive – directly impacting the bottom line and driving customer loyalty.

The research also identifies four global “tribes”, each showing distinct preferences in what it expects from their digital interactions.

Prudent planners, or those motivated primarily by family goals, continue to value face-to-face from their digital interactions. Prudent Planners, or those motivated primarily by family goals, continue to value face-to-face interactions, particularly in areas such as banking where there is a shift towards online and mobile services.

Stylish spenders, loyal to brands they trust, expect companies to know who they are and offer highly tailored offers and content. Banks should look to build services with responsive platforms, as well as applications that provide access to account details and financial planning services.

A seamless experience across digital channels is important for Mid-Life Modernists, the most active users of smartphones, tablets, smart TVs and apps. Our research indicates a growing trend among consumers who use mobile applications for banking services.

Experientialists ‘live for the moment’ and expect fresh content, regular updates and unique experiences from their financial service providers.

Although the surge in group buying has slowed in recent years, 75% of purchases last year still came from group buying websites. When asked which brands they are most loyal to, 82% of consumers indicated they were loyal to their credit card and mobile provider, with 80% claiming to be loyal to their bank.

On the other hand, 36% of customers stated that they did not feel loyal to their banks as they were charged unnecessary fees, received poor customer service (32%) and they were sold other products and services (25%).

The writer is Christopher Evans, director of Collinson Group.