Jerome Tillotson, SVP Customer Success for EMEA & APAC at Marigold, explores the evolving world of customer loyalty in financial services.
The financial services industry has experienced substantial digital transformation in recent years, much of it to the benefit of consumers. Driven by a swell of new financial technology services offerings providing faster, easier, and lower-cost fees to match modern-day consumer demands (and coupled with evolving regulations such as Open Banking) consumers can now execute what used to be quite involved and time-consuming financial transactions to transfer money, buy an ISA or even a stock, change a pension, purchase crypto, transfer money, and much more, as easily as sharing a picture of your smashed avocado and toast on Instagram.
In today’s landscape, loyalty and long-term value are crucial competencies for financial brands. But in an era where, within a few clicks, a consumer can move their money to a better rate or a cheaper fee and with bank branches disappearing faster than a Snapchat (another 200 scheduled for the rest of 2024 on top of the 6,000 closed in the UK in the past nine years[1]), is it even possible to create loyalty with consumers between financial services and modern-day consumers?
The good news. Statistics show that a customer-focused relationship marketing strategy works and is essential for survival, necessitating a comprehensive overhaul of the customer experience. Marketers in the finserv sector must embrace a genuine relationship marketing strategy which prioritises interaction, conversation and listening, over traditional marketing methods. This approach involves engaging customers throughout their journey. It may not replace a branch manager welcoming a customer by their first name, but it is possible to create better and more profitable relationships by engendering loyalty through relationship marketing.
Eighty four percent (84%) of consumers say their favourite brand treats them like an individual, while 78% say they are likely to engage with personalised emails tailored to their interests[2]. Gathering this vital information on customers’ preferences, motivations, and interests can come from initial preference forms on landing pages, as well as surveys and polls incorporated via email, SMS or a mobile app.
Delivering timely, relevant, marketing offers means it is important to understand where prospects are in their own customer journey and then personalise messages tailored to their specific needs and interests at the time – sending the right message, at the right time. This needs to be balanced with the fact that promotional offers may be changing all the time, while not every recipient opens an email as soon as it drops into their inbox. This is where dynamic content technology comes into play as it enables the financial marketer to create up-to-date, personalised, and timely content and offers at the moment of open, even long after the email has been sent.
In the value exchange economy, consumers seek engagement across marketing channels. A significant portion of consumers desire individual treatment, with personalisation and ease of use being key factors. This encompasses not only user-friendly products but also offering good, flexible, customer service across all channels. In relationship marketing terms, this means:
Personalisation: delivering contextually relevant messages to consumers on an individual level, creating message triggers to improve relevance and expanding data profiles with richer zero-party data.
Incentivisation and Reward: playing to the economic desires of consumers, offering discounts or coupons in exchange for data sharing, recognising and rewarding loyal customers.
Optimising the Human Experience: treating customers like humans, working to create more seamless experiences by integrating marketing channels.
Communicating Brand Purpose: answering these questions matters, especially to younger Gen Z consumers.
Loyalty is the rock that savvy marketers can count on to protect their business
Despite the cost of living crisis there is positive news for the brands who are putting effort into their loyalty strategies: now seen as a major differentiator during times like this. In fact, 65% of consumers surveyed in the UK/Europe across a broad range of demographics say they are willing to pay more to shop with the brands they are loyal to – a rise from 58% just a year ago. Other items of importance to consumers when it comes to loyalty programmes[3] include offering:
• Exclusive product or service discounts (56%)
• Points/Reward Systems (56%)
• Exclusive access to products/events/services (32%)
• Ability to take part in contests, sweepstakes, or challenges (26%)
• Product/service recommendations based on loyalty programme usage (23%)
• Communications via preferred channels (19%)
• Ability to connect with others who like the brand (13%)
• Community recognition (12%)
The primary challenge for banks lies in effectively utilising their vast data resources often spread across disparate data systems and organisational silos. Retail co-branded debit and credit cards often face a disconnect between financial and marketing relationships, presenting an opportunity for a more unified customer experience and potentially enabling banks to entice customers to be more receptive to trying new products, as well as remaining loyal along the way.
In 2024, selling to people will not work: relationship marketing is what works. In order to encourage customers to stay loyal in the ‘new age’ of digital banking, it is vital to build an emotional relationship with customers on an individual basis and all that entails within a highly-regulated and competitive environment still dealing with technology challenges. But, regardless, of the constantly changing tech landscape and regulations, what remains unchanged is that the foundation for loyalty always begins with a good relationship.
[1] The Guardian More than 6,000 UK bank branches now gone in nine years of ‘disastrous’ closures
[2] Marigold’s 2024 Consumer Trends Index is a global annual report detailing factors affecting consumer behaviour; 10,389 consumers were surveyed across the UK, France, Germany, Benelux Region, Denmark, Spain, Sweden, the United States, Australia and New Zealand and Japan. The UK/EMEA version is highlighted below.
• 2024 UK/EMEA Consumer Trends Index (report)
• 2024 UK Consumer Trends Index results (infographic)
[3] Marigold’s State of Loyalty Report 2024
