How financial services brands should use customer reward programmesby
The commodisation of financial products means financial services customers expect the same approach to gaining and retaining their loyalty as they receive from the retail and travel industries. The industry has a lot to learn from its counterparts, in this field.
The prevalence and popularity of rewards programmes, from local coffee shops and national supermarkets through to domestic and international airlines, make them a basic consumer expectation.
Keeping pace with change is essential, and it’s up to retail banks and credit card providers to keep up — especially when rewards are perhaps the only true differentiator between a financial service's products.
Most financial services providers already have a rewards programme in place. But the worrying stats for the industry are this: more consumers are satisfied with their retail rewards than are satisfied with their finance rewards. And only 31% of consumers say they are receiving a ‘great service’ from their finance rewards programme.
So there’s genuine room for improvement.
The opportunity is huge — 70% of consumers say the rewards offered by financial services providers will have a ‘major impact’ on their purchasing choice, and a fifth of programme members admit they would spend more with their reward programme if they were offered more personalised and relevant rewards.
The stats paint a clear picture: the benefits of a successful reward programme are significant, and in this respect there are three clear ways financial services leaders can jump the queue and steal a march on competitors:
1. Provide choice and personalisation
Over eight in ten (82%) of consumers feel their provider’s rewards programme would be better if it offered more choice. In short, you have no choice but to offer choice — everyone expects to see some options.
Better still, personalise the options based on what you know about each customer. You’ll likely see redemption rates increase immediately.
2. Improve digital access
More Internet searches now come from mobile devices than desktops — just another sign that we are moving towards a mobile-dominated world.
Finance customers, as you know, are no different. Yet, sadly, only two in ten finance reward programme members say they can access their rewards online.
To meet demand, make sure your reward programme is always-on, user-friendly and optimised across desktop, tablet and mobile devices.
3. Keep your rewards within reach
Make sure your rewards aren’t more hassle than they’re worth.
To keep members engaged and active in your programme, try offering rewards that are lower in value and attainable over a shorter timeframe. Similarly, think about building in a ‘points and cash’ functionality, so members who are close to purchasing their desired rewards can get there that little bit quicker.
A new lease of loyalty
One in three consumers are choosing to buy products from a provider other than their primary bank. Yet with the cost of keeping an existing customer at around 10% of the cost of acquiring a new customer, financial services providers are missing a trick when it comes to unlocking the value from their existing customer base.
Today’s consumer expects to manage their rewards on any device, at any time, at the click of a button.
For a truly seamless customer experience, rewards programmes should be integrated into the ‘anywhere, anytime’ financial services journey – not bolted-on. Only then is a business offering a rewards programme that meets, or even beats, the standards set by retailers and airlines.
For more about our financial services reward programme study, see the Collinson Latitude report ‘Taking Account, The Consumer Perspective on Loyalty in Financial Services’.
James Berry, is ecommerce director at Collinson Latitude