Better not Bank on Loyalty – it has to be earned!
By Mark Bergdahl, Managing Director, Loyalty Consulting UK
- Loyalty schemes enhance and differentiate a customer experience – they don’t fix shortfalls in service experience
- Loyalty scheme should be about a long term commitment, not a promotion. If you can’t sustain it for the foreseeable future – don’t do it!
- Smaller and independent retailers need to work together to take on their real competition – the large multiples and out of town retail parks.
Banking on Loyalty was something banks relied on but customers now need something extra to stick around.
The Financial Services industry was, and in some parts of the world still is, famous for levels of customer inertia that sustain good rates of customer retention. However, in markets like the UK regulators, encouraged by Government, have promoted customer switching creating a frenzy of activity around ‘customer loyalty rewards’…. Simply put, Banks are paying big rewards for new customers, some are even paying a monthly fee for staying!
For many years now, there have been commentators saying that the age of free banking is coming to an end and have predicted the reintroduction of charges, instead of which some of us are being paid to do our banking.
So where does all this leave the case for loyalty schemes?
Banks need to think long and hard about how to retain and encourage customers, focussing on how banking fits into the world of the consumer. As stated by Bill Gates, over 30 years ago, we all need banking services but do we need banks?
Banks can play an important role in the consumer value chain using loyalty levers to improve service, enhance the experience and to reward us across all the channels in partnership with whom we actually spend our hard earned money. Easy to say, more sustainable than anything we have seen to date, challenging to deliver, but not impossible!
For a detailed no obligation discussion, visit our website and register your interest: www.loyaltyconsulting.co.uk/contact/