Until recently, customers were loyal to financial services (finserv) institutions from childhood all the way to retirement. But in today’s fast-paced, tech-driven landscape, that’s simply no longer the case.
With more fintech disruptors joining the financial sector, digitally-savvy customers have more choice than ever at their fingertips — and they’re searching for the best deals. This leaves the entire finserv industry – the banks, investment firms, insurance and credit card companies – competing to attract and retain customers.
According to recent research from Ernst & Young, Asia-Pacific banks, in particular, are falling short on customer loyalty: 63% of survey respondents say they have more than one product outside their main bank. And many of the more than 4,700 retail banking customers across the region that were surveyed admitted to feeling unappreciated, unrecognised and under-rewarded by their main bank.
Therein lies the opportunity. Customers want something more than transactional. They want a one-to-one relationship with their financial partners. And with the right strategy – one that engages customers and encourages them to willingly share their personal information (first- and zero-party data) in return for real value, like offers, rewards and a more personal relationship with your brand (the value exchange) ) – creating relationships that inspire loyalty in the finserv space is well within reach.
Focus on meaningful connections
Payment organization PSCU, in its ‘2021 Eye on Payments’ study, found nearly eight out of 10 survey respondents agree or completely agree that they want to do business with a financial institution that knows them personally.
This sentiment is echoed in Cheetah Digital’s 2022 Consumer Trends Index, which reveals a 110% increase year-over-year among APAC consumers who want to be treated as an individual. They want more personalized messages based on their own individual wants and needs. Unfortunately, only 27% feel like their brands truly understand them, creating a huge gap.
This explains the explosive increase in virtual banks and hyper-personalized banking. They don’t have their hands tied with bureaucracy and can move at a fast pace when releasing new and improved products to the market – all while offering the convenience tech-savvy consumers demand.
According to McKinsey, APAC consumers are over the in-person, teller experience of legacy banks. Approximately 97% of APAC consumers either consider the digital channel the best of several ways to interact with their bank or use it as one of several channels in a multichannel or omnichannel offering.
By contrast, only 2% of consumers in developed APAC and 3% in emerging APAC continue to conduct most of their bank business at the branch.
Now more than ever, traditional finserv institutions must embrace this new landscape by offering products that are easy to use and services that are easily accessible on all channels, especially mobile. Mobile marketing offers businesses and brands the ability to message customers easily, effectively and instantly. In fact, once an SMS is sent, the immediacy is profound — roughly 90% of messages are read in 90 seconds. Even more, however, finserv must provide customer service that is flexible.
This can be tricky given the highly sensitive nature of the information finserv institutions collect. Strict rules make it challenging to connect with consumers in a meaningful way. However, with the right tools and support, restrictions can spur creativity and see finserv brands uniquely differentiate from their competitors.
Relationship marketing starts with an experience.
Whether it’s a lack of trust or an absence of enthusiasm, finserv institutions face more than a few challenges on their way to building loyalty with customers. These industry-specific obstacles are precisely why it’s important that brands take advantage of every opportunity to strengthen connections. According to the same Ernst & Young research, nearly 80% of respondents indicated they would value a loyalty program from their financial institutions.
However, before implementing a full-blown loyalty program, it’s vital finserv institutions start building stronger relationships with their customers first. And an effective way to do that is with experiential marketing — the use of experiences to market a product or service. The success of these campaigns comes down to a few key components of the experiences they create.
Create value for everyone
To inspire loyalty with current and potential customers, experiential marketing needs to include opportunities with real value. In recent years, many financial institutions have taken a very different experiential approach by helping customers improve their financial health. This is an area where Kiwibank is charging ahead, seamlessly blending education with brand awareness in its recent campaign, which uses a strategic survey to tell consumers what their ‘money personality’ is while providing matching Kiwibank products and services.
Upon completion of the survey, consumers are provided instant gratification, being told exactly what kind of ‘saver’ or ‘spender’ they are, immediately. And with the information the consumers provided in the survey, Kiwibank is able to take them on a personalized journey over the next few months with content tailored to their individual needs.
HSBC, another stand-out in the space, recently launched a new financial wellness offering, “to benefit individuals, corporate partners, and community organisations”. The program, which includes both an online platform and in-person workshops, is available to everyone whether they’re a customer or not. When it comes to inspiring loyalty, demonstrating that you care — about customers and non-customers alike — is a solid place to start.
Be exclusive and inclusive
Consumers expect to be rewarded for their spending, so what better way than with unique, personalized experiences? When it comes to exclusive experiences, few do it better than American Express. From early access to tickets for concerts, sporting events and theater to just about everything else imaginable, Amex hooks its customers up with the perks.
Regardless of the approach, finding ways to connect with customers in a way that’s valuable to them is a surefire way to create loyalty.
Maintain a personal touch
At the same time, smaller gestures to build trust – and ultimately, loyalty – can have as much impact as big, bold, exclusive experiences within financial services. Personal connections with customers can be as simple as a thank you. Of course, special rates, discounts and bonus points for loyalty also work well. That’s what TD Bank does every year with its #TDThankYou campaign to celebrate its customers.
The campaign includes personalized experiences like trips and tickets, for instance, for some customers delivered via a clever ‘ATM’ (Automated Thanking Machine) and thousands more received $20 as a show of thanks, either via email or in person at certain branches. The campaign has seen as much as a 26% increase in brand affinity. Incorporate personal touches to show appreciation, surprise, delight and connect with customers in a way that goes beyond transactions to strengthen loyalty over time.
Time to transform
From loyalty cards and cashback offers to discounts, upgrades and even free nights and flights for loyal credit card users, the finserv world is full of opportunities to inspire loyalty — but few pack the same punch as experiences that delight, motivate and deliver real value for consumers. By creating memorable moments for customers and potential customers; banks, credit unions, credit card companies and other financial services brands can create connections that last.
This piece was written by Sara Coghlan. She is a senior marketing manager, APAC, Cheetah Digital.
Coghlan is a passionate marketer with more than a decade of experience in the B2B SaaS space. With a comprehensive understanding of the Asia Pacific market, Sara is laser-focused on customer experience and thrives on driving results.
About CM Group
CM Group offers a suite of world-class martech solutions that help marketers create and foster relationships with consumers across the entire customer lifecycle. CM Group now includes Campaign Monitor, Emma, Vuture, Liveclicker, Sailthru, Selligent and Cheetah Digital. By joining together these leading solutions, CM Group offers a variety of relationship marketing use cases that can be used by marketers at any level. Headquartered in Nashville, TN, CM Group has offices globally across the United States, Europe, Australia, New Zealand, South America and Central America, as well as in Japan.