Banks Need Loyalty, Not Customer Inertia
Sixty-two percent of customers stay with their banks simply because “they have no issues,” recent research finds. That may not be good enough if the sharing economy takes hold. So marketing thought leaders suggest retail banks differentiate themselves. Here’s how.
“The key to improving this loyalty even further lays in making every interaction with a customer seamless, flexible and intuitive,” writes Scott Logie, chairman of the UK DMA’s Customer Engagement Committee. “Whether it is improving a core function of the business or testing new virtual assistance, financial service providers must always optimize for convenience and put the customer first.”
The association suggests that “FinTech” may be an answer, as well as providing customers with help. So says Logie in the Sept. 2016 research titled “Customer Engagement 2016: Talking the Consumer’s Language — Financial Services.” (Opens as a PDF)
The research suggests consumers have more options. And in July 2016, Hitwise found that to be true — both among digital natives and “digital migrants” who are joining the sharing economy for lending and investment. Blockchain and Bitcoin — cloud-based currencies — seem to be in favor with consumers as well as established retail banks.
So traditional bank accounts need to have brands behind them that inspire consumers to stay, DMA finds.
Here’s what the DMA report suggests financial services marketers do to keep consumers at retail banks:
- “Personalized advice can give financial services a route to differentiation,” reads the report. “Fifty-eight percent of Gen Y (consumers born 1981-2000) are interested in a service which analyzed consumers’ daily habits to understand when they were most likely to overspend.”
- Give customers relevant rewards — based on what they already buy, as: “62 percent of consumers agree that they would like it if loyalty offers they receive from brands/shops/sites related more closely to what they like, again highlighting a gap between what brands are offering and consumers’ desires. Consumers are looking for relevant loyalty rewards — rewards that can be delivered through data-driven strategies.” [Author’s note: Target Marketing wrote a cover story about how BofA looks at customer accounts and, for instance, Starbucks buyers get Starbucks discounts.]
- Perhaps alluding to FinTech options, the research says customers want convenient services: “Nearly 60 percent are interested in a service that would automatically notify them of the best rates on savings accounts they could use.”
What do you think, marketers?
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