Great customer expectations
Joining the dots between loyalty
and customer experience
However, with financial services providers under increasing pressure from new competitors, greater consumerisation and increased regulation post the global crash of 2008-09, loyalty should now be higher up the agenda. In the UK for example, the FCA is putting extra pressure on providers to promote ease of switching whereas in Asia, McKinsey&Company state in their ‘Customer first: New Expectations for Asia’s retail banks’ report that Asian customers are shopping around and splitting their wallets more than ever before.
Your customers expect you to treat them with the reverence their money deserves – it’s what future retention and acquisition depends upon. Just look at how many customers Spanish financial services provider Santander has acquired in the UK through their innovative 123 account which makes customer rewards a primary focus.
Despite this change in behaviour, some financial services providers still perceive their loyalty programmes as separate from their overall brand offer, when in fact, loyalty and rewards should be the cornerstone of their customer relationships. To go one step further, the reward experience should be inherent to your brand; one that truly resonates with your overall brand values and customer experience strategy.
Ever since we’ve had goods to exchange, we’ve needed financial services
to store our assets and offer loans. The financial services sector has
undergone countless transformations, most recently with the advent
of online and mobile access for customers. But throughout, one thing
has remained constant: customer loyalty has been seen as incidental, an
added extra that’s not been a top priority.
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Great customer expectations
Globally there are many factors that can impact upon your relationship
and experiences with financial services providers, but heightened
customer expectations and access to information through the increased
adoption of digital devices is a common thread.
Consumers are increasingly knowledgeable in their financial decisions and what businesses should deliver back in terms of loyalty. Your customers are continually assessing the value – the ‘What’s in it for me?’ factor. In short, your loyalty programme needs to outpace their expectations.
This is often easier said than done of course, especially when profitability and return on investment (ROI) are high on the agenda. But remember: a mind-set driven purely by short-term profitability will likely reduce differentiation and perceived value. And this, in turn, opens up the risk of customer relationships slipping out of your hands, and into the hands of competitors. With new entrants from non-banking industries now appearing on the global financial services map - who offer more integrated customer journeys complete with greater digital offerings – the
Building on the banking recovery
Following the financial crisis of 2008-09, there has been vast regulatory change in the financial services industry, across all corners of the globe. Subsequently, revenues have taken a hit as banks have focused on cultural and structural change to deal with these challenges. The pressure is now mounting for the sector to make a push for growth and customer experience should be at the fore. Even in Asia where the crisis was considered to have much less of a negative impact, Mckinsey&Company reported in
their same report (‘Customer first: New Expectations for Asia’s retail banks’) a much more sceptical borrower.
The 2014 World Retail Banking Report produced by Capgemini and Efma puts further spotlight on the requirement of financial services brands to think about loyalty programmes as part of their overall brand proposition. Their 2014 global Customer Experience Index shows an overall decline in positive customer experience in comparison with 2013 – this was the case in every region with the exception of Latin America. This is a significant finding based on the fact they also report customers who have positive experiences are three times more likely to stay with their bank than those who have negative experiences. Similarly, customers
Before you can fully synchronise your loyalty programme with your
brand experience, it’s worth understanding the catalysts behind the
drive for integration.
Whats driving a more
joined up experience?
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Online and telephone banking is now the norm, with social media providing a constant stream of two-way communication. Of the 17,000 respondents interviewed in ‘The 2014 World Retail Banking Report’ by Capgemini and Efma, 89% of respondents said they have a social media account. Nearly one third of banks (32%) say they offer collaborative functionality on their sites and 51% said they plan to do so. It’s undoubtedly a huge opportunity.
Keeping this in mind, it makes no sense that reward programmes are still viewed as a bolt-on to the banking experience. A truly seamless customer experience shouldn’t end with a transaction. In fact, the time between a customers’ great experience and their next interaction – for example, after a successful mortgage application – is a prime opportunity to extend the conversation and build on initial goodwill.
Perhaps more brands should follow the example of DenizBank in Turkey, who became the first to open what they term a ‘Facebook branch’ – allowing customers to access their account, switch money and apply for credit cards and other financial products. An innovative and bold step in the face of two popular financial services concerns regarding social media - privacy and technological integration.
Cashing in on technology
Technology is transforming the way we interact with banks. In fact, customers no longer need to enter a physical bank to get everything they need from you.
With timely interaction so critical to customer engagement, the power of mobile simply cannot be overlooked. Mobile is now an organic extension of banking. As consumers increasingly use smartphones for financial transactions (over half of smartphone users do so according to Board of Governors of the Federal Reserve System), it’s important that reward programmes form part of this seamless mobile experience – retaining loyalty by tapping into the ‘anytime, anywhere’ nature of mobile. In fact, it’s a logical step, as our own research below shows us that in all regions across the globe, online redemption of accrued points and miles is the majority preference for reward programme members. Online accessibility should definitely be at the front of loyalty marketers and programme managers thinking.
How do you prefer to redeem your accrued points/miles? (weighted scores by preference)
*Priority Pass (A Collinson Group Company) research, July 2013
You need to be where your customers are, and give them what they want. Use technology to create an intuitive seamless customer experience, one that you’d
Online
Telephone
Instore
UK North America Europe APAC Middle East & Africa
0 500 2707 2914 1827 1744 839 1765 2025 1197 1147 539 1177 1241 804 745 368 1000 1500 2000 2500 3000 3500
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An investment for the future
Your reward programme was created for a reason. Give it the time and attention it deserves and resist short term profitability in favour of long term ROI.
Be more accessible
Customers are demanding greater accessibility to their financial service products and services. But can they say the same for your reward programme? Think always on, real-time and social.
It’s a global, local world
Whilst there are similarities in behaviours and trends across the globe – every region will have differing levels of adoption – so tailor your
programme accordingly.
Continuous improvement
No matter how good your programme is today – somebody will surpass it tomorrow. Ensure that you build in regular competitor and member audits to ensure you stay relevant and attractive to
your members.
We’ve put together four key pointers for you to consider when
reviewing how connected your reward programme is with your
overall brand experience.
And for those providers who don’t already have a loyalty programme in place – you may actually be at an advantage. With no technological or cultural legacy issues to resist a change of direction – your programme can be created in the here and now, with the customer and experience at the core.
Helping you to join the
We are part of The Collinson Group. The Collinson Group help brands across the world manage their customers more effectively. We started out over 20 years ago offering travel enhancements and insurance. We’re now a leading provider of customer management, focussed on delivering
