Until recently, clients were loyal to financial services institutions (finserv) from childhood to retirement. But in today’s fast-paced, tech-driven landscape, that’s just not the case anymore.
As more fintech disruptors join the financial industry, digitally savvy customers have more choice than ever at their fingertips – and they’re looking for the best deals. This leaves the entire finserv industry – banks, investment firms, insurance and credit card companies – competing to attract and retain customers.
According to a recent study by Ernst & Young, banks in Asia-Pacific, in particular, lack customer loyalty: 63% of respondents say they have more than one product outside of their main bank. And many of the more than 4,700 retail banking customers in the region who were surveyed admitted to feeling unappreciated, unrecognized and underrewarded by their primary bank.
This is where the opportunity lies. 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 voluntarily share their personal information (first-party and zero-party data) in exchange 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 within reach.
Focus on meaningful connections
Payments organization PSCU, in its “2021 Eye on Payments” study, found that nearly eight in 10 respondents agree or strongly agree that they want to do business with a financial institution that knows them personally.
This feeling is echoed in Cheetah Digital Consumer Trends Index 2022, which reveals a 110% year-over-year increase among APAC consumers who want to be treated like individuals. They want more personalized messages based on their own wants and needs. Unfortunately, only 27% feel like their brands truly understand them, creating a huge gap.
This explains the explosion of virtual banks and hyper-personalized banking. They don’t have their hands tied with bureaucracy and can act quickly when bringing new and improved products to market, while providing the convenience that tech-savvy consumers demand.
According to McKinsey, APAC consumers are above the in-person and teller experience of traditional banks. Approximately 97% of consumers in APAC see the digital channel as the best way to interact with their bank or use it as one of the channels in a multi-channel or omni-channel offering.
In contrast, only 2% of consumers in developed APAC and 3% in emerging APAC continue to do most of their banking at a branch.
Now more than ever, traditional finserv institutions need to embrace this new landscape by offering easy-to-use products and easily accessible services across all channels, especially mobile. Mobile marketing offers businesses and brands the ability to message customers easily, efficiently, and instantly. In fact, once an SMS is sent, the immediacy runs deep — around 90% of messages are read within 90 seconds. But even more, finserv must provide flexible customer service.
This can be tricky given the very sensitive nature of the information finserv institutions collect. Strict rules make it difficult to communicate with consumers in a meaningful way. However, with the right tools and support, restrictions can spur creativity and see finserv brands uniquely differentiate themselves from their competitors.
Relationship marketing starts with an experience
Whether it’s a lack of confidence or a lack of enthusiasm, finserv institutions face several challenges in building customer loyalty. These industry-specific barriers are precisely why it’s important for brands to take advantage of every opportunity to build connections. According to the same Ernst & Young study, almost 80% of respondents indicated that they would appreciate a loyalty program from their financial institution.
However, before implementing a full-fledged loyalty program, it is essential that finserv institutions begin by building stronger relationships with their customers. And an effective way to do this 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 elements of the experiences they create.
Create value for all
To retain current and potential customers, experiential marketing must include real-value opportunities. In recent years, many financial institutions have taken a very different experiential approach to helping customers improve their financial health. This is an area where Kiwibank is moving forward, seamlessly blending education with brand awareness in its recent campaign, which uses strategic surveying to tell consumers what their “financial personality” is while providing corresponding Kiwibank products and services.
At the end of the survey, consumers enjoy instant gratification, being told exactly what type of “saver” or “spender” they are, immediately. And with insights provided by consumers in the survey, Kiwibank is able to take them on a personalized journey over the coming months with content tailored to their individual needs.
HSBC, another benchmark in the space, recently launched a new financial wellness offering, “to benefit individuals, corporate partners and community organizations”. The program, which includes both an online platform and in-person workshops, is accessible to everyone, whether they are clients or not. When it comes to inspiring loyalty, demonstrating that you care about customers and non-customers is a good place to start.
Be exclusive and inclusive
Consumers expect to be rewarded for their spending, so what better than with unique and personalized experiences? When it comes to exclusive experiences, few do it better than American Express. From early access to tickets to concerts, sporting events and theater to just about anything imaginable, Amex offers its customers benefits.
Whatever the approach, finding ways to connect with customers in a way that’s valuable to them is a surefire way to build loyalty.
Keep a personal touch
At the same time, small gestures aimed at building trust – and, ultimately, loyalty – can have as much impact as big, bold and exclusive experiments within financial services. Personal relationships with customers can be as simple as a thank you. Of course, special rates, discounts and loyalty bonus points also work well. That’s what TD Bank does every year with its #TDThankYou campaign to celebrate its customers.
The campaign includes personalized experiences such as trips and tickets, for example, for some customers delivered via a smart “ATM” (automatic thank you machine) and thousands of others received $20 as a thank you, either by e -mail, or in person at some branches. The campaign saw as many 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 build loyalty over time.
It’s 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 punch experiences that delight, motivate and deliver real value to consumers. By creating memorable moments for customers and potential customers; banks, credit unions, credit card companies and other financial services brands can create lasting relationships.
This piece was written by Sara Coghlan. She is Senior Marketing Manager, APAC, Cheetah Digital.
Coghlan is a passionate marketer with over a decade of experience in the B2B SaaS space. With a deep understanding of the Asia-Pacific market, Sara focuses on customer experience and strives to drive results.
About CM Group
CM Group offers a suite of world-class martech solutions that help marketers build and maintain relationships with consumers throughout the customer lifecycle. CM Group now includes Campaign Monitor, Emma, Vuture, Liveclicker, Sailthru, Selligent and Cheetah Digital. By bringing together these industry-leading solutions, CM Group offers a variety of relationship marketing use cases that can be utilized by marketers at all levels. Based in Nashville, TN, CM Group has offices worldwide in the United States, Europe, Australia, New Zealand, South and Central America, and Japan.