It’s safe to say that in our current economic environment, capturing and maintaining market share is more important than ever. Across the U.S., banks and credit unions are looking for ways to stem the flow of consumers leaving financial institutions. Seeing consumer loyalty as the answer, instead of the question, can offer much-needed solutions.
Loyal Consumers Want Rewards—And More Products
Right now, the average consumer is under financial strain, making loyalty more elusive. A possible economic downturn, inflation, rising debt and healthcare costs, and dwindling savings could all be to blame.
Over a third of Americans now have more credit card debt than savings, the highest percentage seen in over a decade. Despite this, roughly the same number of people are planning to pay down debt and beef up savings. How much easier might this be with help from their financial institution?
As disheartening as it is to witness financial pressures increasing, it shows where the solution lies. Banks and credit unions can work toward the goal of improving consumer loyalty by marketing toward this area of need. Financial institutions can also extend support to help reduce financial strain—with credit counseling, flexible payment plans, and new products and services.
In Accenture’s recent Global Banking Consumer Study*, conducted on 49,000 international consumers, consumers revealed that they would like more acknowledgement from their institutions. Ideally, this would come in the form of rewards and personalized products and services.
Financial institutions that take steps to build relationships—also helping to build consumer loyalty—could increase revenue by up to 20 percent*.
Currently, consumers have the digital access they need; that’s how they interact with financial institutions. What’s lacking is connection. Consumers want to be rewarded for their loyalty, and they also want to see more value in their products and services.
With the right approach, these problems can be solved. But to prevent more consumers from abandoning ship, it’s important to move quickly.
Is insurance the missing piece?
6 Ways to Build Consumer Loyalty and Earn Business
To meet consumers where they’re at, consider implementing these tips:
1. Personalize their experience.
One of the big takeaways from the Global Banking Consumer Study was a lack of connection. Though it sounds counterintuitive, you can connect by leveraging your data. Using data analytics to understand preferences, behaviors, and financial goals enables you to tailor your marketing, products, and services.
Segmenting based on demographic, behavioral, and transactional data—as our data scientists do so diligently here at Franklin Madison—will give insight into offers, programs, and experiences your consumers are most responsive to. Personalization can extend across touchpoints, including mobile apps, digital channels, and in-branch interactions.
2. Provide exceptional service.
It’s simple, but it’s not easy. Only 30 percent of consumers* rank their financial institution’s service as “excellent.” Prioritizing consumer satisfaction involves ensuring efficient, friendly, and knowledgeable service across all channels. Empower team members with the training and tools they need to exceed expectations and resolve issues promptly.
3. Market insurance products.
Likewise, only 23 percent of consumers* rank their financial institution highly for its products and services. While improving service to increase consumer loyalty can take longer to yield results, adding new products offers short- and long-term wins. A smart way to expand your offerings is by marketing insurance products, such as life, home, auto, and accidental death and dismemberment (AD&D) insurance.
Then, consumers can start to view your institution as a one-stop-shop for their financial and insurance protection needs. In this way, providing insurance helps to improve personalization while increasing non-interest income. Franklin Madison works with financial institutions to do exactly this. Using tailored insurance products and data-driven direct marketing, we help to increase revenue from insurance programs.
4. Offer competitive pricing and rewards.
Along with personalized products, consumers also want incentives and rewards. Competitive interest rates, low fees, and attractive reward programs for different products and services can all be used for retention. To incentivize consumer loyalty, many institutions also offer rewards for maintaining accounts (anniversary bonuses), using credit cards, or referring new people.
Again, this is an area of great opportunity. The Global Banking Consumer Study noted that while most financial institutions say they’re consumer-focused, less than 15 percent* provide tangible rewards. Creating supportive, rewarding programs might also help mitigate the risk posed by over-extended consumers.
5. Commit to digital innovation.
More consumers are comfortable with digital banking, but that doesn’t mean it’s always a good experience. The biggest complaint? Consumers find digital channels functional but emotionless. They feel transactional and need a human touch. Investing in digital platforms to ensure accessibility and convenience is necessary. But it’s important to take it a step further.
Level-up your user experience by integrating features that support human interaction. This could include incorporating live chat or video conferencing in mobile apps and using face-to-face meetings to help consumers meet personal goals, like buying their first house.
6. Get involved in the community.
Even with digital advancements, consumers still appreciate seeing financial institutions out and about. Actively participating in, sponsoring, or hosting initiatives that resonate with residents can help to support consumer loyalty. Activities like festivals, fundraisers, and charity runs can all help to establish a community presence, as well as an emotional connection.
As a final step, take time to conduct an internal audit on consumer loyalty, using these study results to investigate areas needing improvement. Is your consumer journey personalized? Are you providing the right products? Could your digital channels use some humanity? Reading reviews and asking for team member input can give you actionable answers to these questions.
Many times, you’ll find that consumer loyalty doesn’t need to be improved—it needs to be reinvented. Brainstorming how to better connect with consumers today could mean thriving tomorrow.
Give Your Consumers More by Offering Insurance
Loyalty begins with meeting a consumer’s need—before they’ve had the chance to ask. Today, most households lack adequate insurance coverage. Why not work with Franklin Madison to provide insurance to your consumers and promote financial wellness?