Customer loyalty programs provide your bank with a great source of repeat business as well as referrals to new customers. Investing the time, energy and effort in creating a customer loyalty program not only benefits your customers, but returns tangible dividends for your banking organization.
A global consumer survey conducted by Accenture found an increase of 10% in these programs for banks during 2009-2011. However, the survey also found that many of these programs were not as successful or effective as envisioned. Offering successful customer loyalty programs requires an understanding of the purpose for the program, knowing what your customers want and value, and knowing what types of programs don’t work.
The Purpose of Rewarding Customers for Loyalty
It has become increasingly important for banks to reestablish the reputation of being a trusted partner to customers in the wake of the recent financial crisis that shook consumer faith. The use of customer loyalty program puts this commitment front and center through recognition of your customer’s commitment to place their trust (and money) in your vaults.
How Programs Can Fail to Deliver on Their Mission
Usually, customer loyalty programs that fail are those that treat all customers the same. You have different types of customers that bank with you for different reasons. A rewards program that treats your customers all the same can do way more harm than good. An approach that is segmented and specific to the demographics of your customer, based on their profile and banking habits may be a better way to not only reward loyalty, but engender a cooperative atmosphere where your customers are willing to do more with you.
Types of Programs that Reward Loyalty
Customer loyalty programs that are successful deliver a positive return on investment (ROI) for your bank. Successful programs that you should consider include:
- Offer staggered levels of cash bank rewards and discounts exclusively to those who use your proprietary credit cards.
- Reward your lending customers who refer others to apply for a loan through your bank with a cash back referral program. This incentivizes your customers to find prospects that they think meet the bank’s lending requirements and provide you with a low-cost extension of your sales force.
- Make available technology offers such as tax services and small business accounting programs. These types of programs not only make it easy for your customers to manage their money but provide you with a way to suggest additional ways to do business with the bank.
These are a few ways to improve your customer loyalty offerings and become a trusted partner for your customer’s banking needs. For more information about marketing and loyalty programs that can help increase your bank’s ROI and help you prove results to management, download our eBook now!