LOYALTY PROGRAMS FOR FINANCIAL SERVICES
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.