Successful loyalty programs employ a variety of tactics to help engage consumers. Recently this has become harder to do because of an emerging trend: consumers want more value. In exchange for handing over their hard-earned dollars, customers want something more in return than just the products or services they’re paying for.
Some industries are doing a better job than others at providing added value. The banking industry definitely has room for improvement, and a great deal of incentive to get better at providing value.
“Banks are at a tipping point,” Accenture proclaims in its 2015 North America Consumer Digital Banking Survey. “Their historically stable customer base could erode steadily if banks cannot deliver the service proposition that customers demand.”
Consumers are looking for added value even for the simplest transactions
The findings of Accenture’s survey illustrate that consumers want more from a loyalty program than just earning something free once a year or so. They want extended value propositions in multiple formats. If banks fail to deliver that added value, they risk customers becoming disengaged and using the bank for only the simplest of transactions. They’ll lose the more profitable transactions — loan generations, investment, etc. — to service providers they perceive as being more helpful with major financial decisions, Accenture warns.
Accenture’s report paints a clear picture of what added value looks like to bank customers:
- More than half (54%) want their financial institution to locate discounts on purchases for them.
- They want merchant-funded offers, everyday purchase discounts and loyalty rewards.
- They want digital services — and this is especially important to Millennials.
- Mobile banking and payments are priorities; 38% of bank customers rate good online banking services as the top reason they stay with their bank. It was more important than branch location or low fees, and topped the list of priorities for the first time.
That last point bears a deeper look. Accenture’s research points to mobile banking as an increasingly important element of a financial institution’s overall loyalty initiatives. Even though more Millennials than Generation X or baby boomers signed up for mobile banking in the past 12 months (22%, 13% and 6%, respectively), an impressive 79% of surveyed customers said they would make more mobile payments if their financial institution offered discounted pricing and/or coupons based on past purchasing behaviors.
Account holders would use mobile more if rewarded
What’s more, 78% said they would increase their mobile usage if they received rewards points. Even among non-users, this type of incentive was appealing; 54% said they would make mobile payments if their FI offered discount pricing or coupons, and 53% would increase usage in exchange for rewards points. Those numbers make mobile emerge as a critical component of financial institution loyalty. Consumers not only want it, they’re willing to use mobile even more if their bank rewards them for doing so.
Consumers are looking for banks and credit unions that understand what they are looking for and seemingly aren’t getting it. Do you have a way to reward your account holders for taking the kind of actions that drive more engagement with your financial institution? If you don’t, then you are missing out on a great opportunity.