“Money talks,” this term can’t be untrue. However, the age-old issue with competing by rate, cashback, or price is that those who come in a game with money will leave it for the money. All these are making the game very expensive.
No one can exactly expect or predict the abandonment of financial rewards as a critical aspect of loyalty strategies in monetary services or firms at large. Yes, this is working in recent times. However, there is an inevitable trend that forces financial marketers to think again regarding loyalty strategies.
Digitalization has impacted loyalty marketing as much as other aspects of financial processes. The fruitfulness of non-banks and fintech companies over the last few years is proof of this. These disruptive companies got a way to resolve issues digitally or provide a previously unsolved need to allow the growing number of customers. Banks and credit union marketers require to create personal connections with customers to recognize their requirements and evolving attitudes.
A new survey of customer loyalty trends by Harvard Business Review and Analytic Services reinforced the conclusion. Now, the brands are thinking beyond traditional loyalty built on financial rewards. One report also states that companies are frequently looking to provide a more personalized experience and communications, adding unique access to special events.
The fact is accurate that traditional monetary rewards are still in the game. However, the report concludes that traditional loyalty programs do not seem to be maintaining pace with evolving customer behavior.
Less than half of survey participants think the customer loyalty strategy of their organization is sufficient. Moreover, 46% state their loyalty plan requires modification. Additionally, only 43% say their company has formed a digital-first loyalty plan. There were 400 senior executives from several industries who were participants in the survey. Financial services were the largest sector at about 30%.
How to create an improved loyalty strategy
Here are four tried and tested methods that banks and credit unions can use to update and refresh their customer loyalty strategies.
Build Unique Experiences
Customers like reward points. However, they feel special when they get perks and customized deals. Brands have now started more focusing on personalization and cross-industry collaborations that make it possible.
Invest in some percentages in innovations to improve loyalty capabilities
We have discussed the mobile earlier, but AI and ML can enhance the personalization of reward deals and correlated interactions. It is precisely right for the giant organizations where AI can help them gather data at scale.
Emotional connection builds brand affinity.
Shared value generates emotional connection, and it allows financial organizations to strengthen customer relations and boost engagement in methods that traditional rewards cannot.
Keep it Simple
According to a report, the customers will leave for other options if you do not enhance the loyalty program’s ease of use and transparency.
Innovative sectors priorities to improve loyalty
Here are the areas where financial organizations and other enterprises are investing in enhancing customer loyalty programs.
● 25% Geolocation/proximity-based services
● 25% ML/AI (Machine Learning and Artificial Intelligence)
● 27%APIs (Application programming interfaces)
● 38% Customer Service Chatbots
● 52% of Mobile capabilities
There is no wonder why mobile capabilities are the number one priority for brands to enhance loyalty. Fintech companies are ahead of a few industries recognizing the digital-first approach as it is becoming the new standard.
One of the essential functions of any loyalty program is to offer instant gratification through simple solutions. According to one report, an average American has 80 applications on their mobile phones. And that concludes that customers do not care about the technology and they care about their experience through the technology.
Monetary rewards are predicted to decline.
The survey participants considered traditional monetary rewards like loyalty points or cashback to be the first on the list five years ago. However, those rewards come at number fourth in importance, digital and omnichannel access, and trailing exceptional services now. The participants predict that the monetary reward will rank the eighth spot in importance.
In this post, we have noticed how digital trends force economic marketers to reconsider loyalty strategies. It is also highly essential to create an improved loyalty strategy that can help build unique experiences, invest some part of percentages in technology, keep the emotional connection to build brand affinity, and maintain the process transparently and straightforward.
To build exceptional loyalty strategies, it is vital to have a loyalty management platform that gives you complete freedom and total control of the loyalty program. LoyaltyXpert offers everything that any organization or brand requires to build loyalty strategies.
With the help of the LoyaltyXpert, you can have multiple and flexible options. You can define several schemes, along with insights and analytics.
So, what are you waiting for? Request a demo now and improve your loyalty strategies.