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With online banking options abundant today, customers have various choices connected to customer engagement and customer loyalty. But, as in-bank traffic fades nationally, so too, apparently, is customer loyalty to banks.
The banking industry faces disruption in everything from blockchain to constant innovation at fintech startups, which presents increased competition and need for the stability, revenue, and customer loyalty that loyalty programs provide.
But, according to new research from The Collinson Group, just 54 percent of American consumers who are members of financial services loyalty programs feel they are rewarded.
What’s more, in the U.S., consumers want the ability to combine points with cash (46 percent), a simpler user experience (46 percent), and a larger selection of rewards (43 percent). Survey respondents showed a clear desire to be able to redeem in-store with over half saying they would like this capability in their program.
As new competitors continue to emerge and consumers are given more opportunities to compare and switch services, the research shows that financial services brands must consider how best to remain attractive to this sophisticated set of consumers. Customers now have greater access to information and are always after the best value for money, especially as reward and recognition become increasingly important for customer retention and revenue growth.
Collinson Group surveyed 2,250 consumers across the U.S., United Kingdom, Singapore, and the UAE and revealed that more than three-quarters of respondents globally (77 percent) look for loyalty programs with a greater choice of rewards. Furthermore, four in five respondents (82 percent), said the value of a program decreases when there is only a limited range of rewards available.
In the U.S., research respondents cited three ways that financial services companies should improve their loyalty programs:
Offer the ability to combine points with cash (46 percent)
Provide members with a simpler user experience (46 percent),
And offer a larger selection of rewards (43 percent).
“Providing a wide choice of rewards by creating frictionless loyalty is key to driving engagement within financial services programs,” the research notes. “Consumers place great importance on the enhanced redemption experience, desiring the accessibility of being able to redeem in retail outlets and leisure stores, as well as through an e-commerce platform.”
Besides rewards, U.S. consumers consistently place a high value on benefits such as airport lounge access, concierge services, and unique social and cultural leisure experiences, the research notes.
“Traditional financial services models continue to evolve, with a focus on improved digital services and experiences, but a key area brands need to consider is how they recognize and reward existing customers,” said Lars Holmquist, director at Collinson Group. “For example, through services such as real-time digital rewards or in-store redemptions at point-of-sale. Consumers are used to instant satisfaction and timely special offers, and those who can’t deliver will be left behind. Other sectors such as travel and retail are demonstrating new ways of offering more personalized, timely, and relevant rewards. A key element in enabling this is providing customers with more ways to earn and redeem loyalty currency.”
Some banks pride themselves on the personal touch and its strong relationship with customer loyalty.
For Sheila King Goodwin, senior vice president, retail banking at PeoplesBank, employee engagement and customer loyalty are forever connected.
Based in Holyoke, Mass, and established in 1885, PeoplesBank has seen quite the evolution in customer loyalty and customer behaviors during the past 132 years.
“Employee engagement and customer loyalty are joined at the hip!” King Goodwin told Loyalty360 in March. “If you do not have employees that are on board, your customers will see the seams splitting in your experience and loyalty initiatives. You can’t buy your way to loyal customers with pens, plants, and rewards. It’s personal and that aspect of the relationship has to be a connection made by your employees.”
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