How banks can increase customer retention with appealing loyalty programs
Surveys show that about 81% of bank customers expect some kind of an incentive in return for completing particular banking activities. If banks respond to this need with appealing loyalty programs they can not only maintain their loyal customers but also increase them.
Let’s discuss how banks can achieve this. But first, why don’t you make a short trip and go through these two articles about software development technology that will rule 2022 and outsourcing software development in the pandemic.
Customer Loyalty Programs
In order to attract new customers and to improve the retention of the present customers, many banks have started loyalty programs. They experiment with multiple methods including banking software solutions.
An example of this would be Citibank, which started a program called Thank you. According to this program, customers are given points based on their monthly activities. Customers can use those points to earn travel tickets and various other products. Another bank, called Bank of America offers withdrawals from non-chain ATMs, free equity trades and checking accounts without fee. There are banks that offer discounts upon buying extra services and products.
Traditional Loyalty Programs
The loyalty programs generally have this one flaw. That is that they are programmed taking into account an average consumer. Experts note that the loyalty programs are becoming prevalent but less exclusive. The banking industry now is highly competitive. Your lack of attention even for a little while could cause your customers to go to a rival that lures them with a better proposal.
However, loyalty program is just a precondition for retaining customers. Banks that have a simple loyalty program will only enjoy mediocre benefits. To obtain more you must offer services that pass the conventional level.
Customer Needs and Preferences
App for Management
A survey showed that about 61% of the customers like to manage their loyalty program from their mobile app but only 21% of the providers offer this ability.
In 2017 a bank (S&T) launched a program which was designed to offer cash rewards that could be personalized. It was meant to appeal to customers who often use debit cards so that they can use the reward as they wish. The program offers both in-store and online shopping options from the places that the customer prefers. A programs that takes the likes and dislikes of customers into account will have more chance to attract them.
Attracting the Younger Generation
One of the hot topic of debate among the financial institutes is getting the millennials and younger generations to start using the financial products and services and building long term relationship with them. It is not a simple task since they are more likely to switch banks compared to other age groups if the current one don’t meet their expectations.
In this regard a program called Pays for A’s was started by Zions bank. The program rewards $1 to every student who successfully achieves an A in studies. The bank also offer scholarships in a lottery competition.
Loyalty Program And Technology
If your bank wants to do well and retain customers then using technological tools will definitely be beneficial. Using the banking CRM system will take your loyalty program to top. It helps banks manage customers according to their demographics, lifestyle and shopping behavior.
Another tip would be to digitize your loyalty program. Customer prefer to share reward points with their friends and families using mobile app.
Understanding your customers and shaping your loyalty program according to that is the key to success. At times their behavior might seem too complex but keeping an eye on it with the help of technology will simplify the challenges. It will help you make more targeted loyalty programs which your customers will like. Only the best loyalty programs will be able to attract the customers and instill loyalty in them.