Customer loyalty. It's a buzzword in the retail sector, and it just so happens to affect retail banking as well. But with so much noise and so much competition in the marketplace, from fellow financial institutions, as well as fledgling big-box retailer players, how can banks and credit unions build loyalty effectively?
Here are a few basic tips to get your efforts started.
Shift Focus to Mobile
When it comes to customer loyalty-building you can't get much more effective than broadening your efforts on your mobile presences, from your mobile-optimized website to your mobile app to something as seemingly simple as text banking. A recent study estimates that if banks and credit unions capitalized more on their mobile and online presences, as opposed to focusing budget and time into in-branch experiences and phone service, their customer loyalty would increase by 12 percent.
Reinforce "Community" and "Local"
Customer satisfaction directly impacts loyalty and longevity of relationship. That's why making strides in satisfaction is essential. One of the best ways to improve your customer satisfaction is to emphasize your bank or credit union's "localness." A 2016 study found that satisfaction levels for financial institutions were highest for credit unions and community banks, while national and large-scale chain banks scored lower. If you fit into the latter category, focus your marketing on individual, local branches to boost your perception of being part of a community, versus a corporation.
Make Yourself Truly Unique
It's a foregone conclusion that most all banks or credit unions will have an established set of unique selling propositions (USPs), whether spoken or unspoken, as part of their overarching strategy. But "great customer service" does not a USP make. Make yourself truly unique. Take a page from retail giant Amazon, for example, whose USP of offering loyal customers free and fast shipping has given it a powerful hold of the marketplace. Offer up something of value to peg as a cost of doing business to boost your overall upsell quotient.
Gratitude is a powerful thing. It can make headway in your customer loyalty efforts by positioning your bank or credit union as a thankful entity. This can come in the form of the occasional handwritten card if you're feeling old school, or you can make slightly grander gestures, such as discounts on low-hanging-fruit services you offer. Try promoting a member or customer appreciation day with refreshments at the branches and/or opportunities for free fund transfers, free debit card personalizations or other low-cost services you charge fees for.
Loyalty is about more than handing someone a card and building up "points." There's a lot to be learned from your customers' and members' behaviors, from their frequency of use of the mobile banking platform to the number of products they have in their "wallet" to their number of visits to bank- or credit-union-owned ATMs. Monitor for customers whose activity has begun to taper off and target them with rewards and incentive to stay. And for those who are consistently highly engaged, offer them personalized service and content you're not giving just anybody (and automate its dissemination to save yourself and your staff some time).
Sources: Bain & Company, Raddon Financial Group