Most consumers consider using a bank to manage their finances to be a necessity, and that means that almost everyone is in the market for a better bank. While customers are certainly looking for a financial institution that can offer convenience, reasonable fees, high yield accounts and more, these aren't their only requirements. If banks go above and beyond by offering added value to client relationships through a truly engaging loyalty program, they may be able to keep current customers coming back for the long term.
Especially in today's more difficult economic times, people are looking for value everywhere, so the quality of a banking rewards program is something that many customers are factoring in when they choose how to get the most out of their money. According to Bank Systems & Technology, financial institutions aren't always hitting the mark when it comes to their loyalty offerings. A survey of 10,000 consumers in 27 countries by Accenture revealed that 33 percent of Americans participated in a bank loyalty program during 2011, up from 23 percent in 2009. But while the number of clients taking advantage of such incentives is increasing in this region, 30 percent of bank customers didn't even know that banking loyalty programs were available to them.
Even more importantly, Accenture discovered that marketers may still have progress to make in terms of developing banking loyalty programs that produce the desired results. Only 45 percent of respondents said that these initiatives actually convinced them to stay with their bank.
What does it take?
Peppers & Rogers Group pointed out that effective loyalty programs are indeed attainable for any financial institution. The relationship management firm highlighted Citibank as one example of a bank that has leveraged incentives to successfully keep its customers engaged. Through its "ThankYou" program, which won the Colloquy Master of Enterprise Loyalty award in 2010, clients earn points every month based on their activity. For instance, using their Citibank debit cards for transactions or opting in to new products or services all count toward the total. Points are funneled into a central account, from which customers can easily redeem them for various gifts in a number of categories, including travel & experience, gift cards and charity.
To this end, Peppers & Rogers noted that there are a few best practices that banks can follow to have a successful loyalty program. For instance, all processes should be user-friendly, as customers are more likely to take advantage of their rewards if they can be redeemed simply and intuitively, as well as through a range of channels. It's also critical to remember that all customers are different, so having a variety of gifts, savings and other benefits to choose from ensures that there is something for everyone. Additionally, branding should be strong and consistent, as this will help keep the bank at the top of clients' minds when they're using their rewards.
Banking may be a necessity, but that doesn't mean there shouldn't be perks to doing it. With the right banking rewards and loyalty programs, any financial institution can improve member engagement while also boosting ROI.