LOYALTY PROGRAMS FOR FINANCIAL SERVICES

Organizations providing financial services are currently faced with two significant changes. Firstly, there has been a realization that digitalization is a must-have and not just an advantage. This has been driven home by digital disruptions like FinTech.Secondly, users are becoming more aware of service quality. Introducing a loyalty program is one way of strengthening the bond with the customers.

WHAT ARE FINANCIAL SERVICES LOYALTY PROGRAMS?

Financial services loyalty programs are loyalty retention tools that aim at increasing purchase frequency and brand loyalty for the organization. Certain unique features differentiate them from traditional reward systems:

• Financial loyalty programs incentivize customers to spend money using their credit card or highlight service packages like loans or mortgages

• An active account is a pre-requisite

• Creating touchpoints is a priority in loyalty programs

• Financial reward programs promote content, educate customers about ongoing offers, and generally extend the financial organization’s online presence.

CUSTOMER RETENTION CHALLENGES

Ideally, loyalty in the financial services sector should revolve around emotional engagement, using a next-gen loyalty program as a tool. The three major challenges that customer retention poses for financial service organizations/banks are :

• Establishing an influential digital presence

• Deploying a robust customer retention plan

• Lack of relevant loyalty programs

DESIRABLE FEATURES OF A LOYALTY PROGRAM FOR FINANCIAL SERVICES

The features of loyalty programs that would help overcome the challenges listed above are:

• Rewarding renewals: Loyalty programs can be restricted to active account holders. Account renewals or upgrades can be encouraged with specific loyalty points.

• Customizable loyalty programs: A loyalty strategy that best suits the organization’s brand offerings should be set up. It could be points-based,tier-based, or based on perks.

• Omnichannel: Customers look for unhindered services on all channels, whether they are banking from home, investing while travelling, or walking into the nearest branch. An omnichannel loyalty program would ensure that the customer earns points or rewards while doing any of the activities mentioned above.

• Reward a healthy lifestyle: Insurance companies would reap the benefits of rewarding customers through app integrations for pursuing a healthy lifestyle.

ENGAGE CUSTOMERS OUTSIDE OF THE BUYING CYCLE

Engaging customers outside the buying cycle builds a strong loyalty foundation. This can be done through free membership bonuses, setting up VIP clubs within a program, Instagram contests, and sweepstakes. Encouraging loyal customers to watch a webinar or participate in online workshops will ensure content consumption. Loyalty programs are multifunctional tools that can work wonders for financial services. Data Direct can help you learn more about loyalty programs and how they can be implemented to ensure customer loyalty.