The Global financial crisis has left an indelible impression on a customer’s attitude towards the banking industry. Over the years, customer attrition has become a major concern for banks and it only gets serious because according to Clarabridge survey, 22% of customers think that all banks are the same. Added to the technological advancements, most banks are still stuck with legacy systems which has only become difficult for bankers to keep up the pace with customers who embrace digital touchpoints. Hence, in the age of customers, the only way banks can achieve competitive growth is by crafting strong customer-centric strategies where customers can bank at their convenience and through their preferred channel.
The Rosetta Consulting Customer Engagement Consumer Survey shows that loyal and engaged customers buy 90% more frequently spend 60% more per transaction and acquiring new customers is anywhere 5 to 25 times more expensive. This shows that having loyal customers are much more profitable as they assure you lifetime revenue. To keep customers coming back, banks have to lure their customers with attractive loyalty programs, rewards and advocacies where customers feel wanted and don’t leave you for your competitor.
Here’s where you build a 360 view of your customers by following their banking journey through various touchpoints so that you know how exactly to engage with them through loyalty and other customer retention techniques by learning their preferences and buying behavior, rightly.
1. Focus on Your Employees
Employee motivation plays a critical role in customer loyalty because they are your biggest brand advocates and the first point of interaction for your customers. High employee engagement drives high profitability and increased customer satisfaction which leads to customers being 10 to 30% more loyal than customers who received a poor service.
In 2016, Bank of New York Mellon bagged the highest customer advocacy ranking of any firm through its digital touchpoints and empowering their employees to do their best in serving customers with social investment opportunities.
Similarly, Citi has redesigned its core management tool for its employees and gathers regular employee feedback to understand what holds them back from delivering great customer service. The whole idea boils down to the fact that when you take care of your employees, your customers will be taken care of by your employees.
2. Educate Your Customers to Transform Relationships
Banks should realize the fact that not all customers are financially educated and understand banking concepts. Financial education and community outreach is one of the easiest ways to improve customer engagement with more number of banks investing in this technique to tap into the lesser known population like immigrants and underbanked communities. Such initiatives foster better bank-customer relationship and improve the goodwill of banks.
Banks should also make use various digital channels like mobile phones, tablets, kiosks and others to offer tutorials of different services, products and even online banking safe practices. Customers stick around for long when they feel banks care about their financial wellbeing. This is why big banks like Bank of America has partnered with Khan Academy to offer video tutorials on financial education and their various services to engage better with existing and new customers as there is a huge financial knowledge deficit that needs to be addressed which can ultimately increase your loyal customer base.
3. Personalized Loyalty Treatment of Customers
In this digital era, banks cannot opt for ‘one-size-fits-all’ techniques. This holds apt especially while dealing with loyalty and rewards for customers as personalization is the key. Loyalty programs and incentives should be carefully dealt with because they are the driving factors for customers to stay loyal to your bank. With a personalized touch, banks can successfully work towards reducing customer attrition and increasing customer retention as customers love the extra attention through incentives and other added benefits.
A Microsoft survey reveals that 54% of customers expect brands to understand and offer them personalized experience. With more number of customers willing to provide their personal information, banks should also focus on establishing an omni-channel platform for enabling customers to manage their loyalty programs because according to Amdoc’s research, 61% of customers want to manage their loyalty programs through mobile wallets.
Initiatives from Citibank like introducing a ThankYou Program allowed customers to earn points based on their engagement with the bank and its networks. Similarly, Bank of America offers free withdrawals from non-chain ATMs and free equity trades to encourage customers to do more business with them and stay with them for a longer period.
In conclusion, incentivizing customers has always been a traditional way to keep them coming back to you. But since digitization is imperative in banking, banks should be open to adapting advanced technologies like Big Data, CRM and other analytical tools to get a 360 view of customers so that it’s easier to build transparent, benevolent and consistent loyalty programs. In the end, customer retention is all about empowering your employees so that they will continually engage with your customers with personalized solutions, consistently across all channels to encourage them to stay loyal.
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