Putting loyalty back on track in banking
In today’s market, there is a strong argument that loyalty is more important now than ever before. When delivered correctly, loyalty can be a very powerful way to positively influence your customers, and your bottom line. But it’s getting harder to achieve.
The banking landscape has changed significantly in India in recent years with the fight for customers’ share of wallet ever more competitive. The expansion of the middle class has transformed retail banking in India over the past decade with the expectation that about 89 million households will join that segment by 2025. Upwardly mobile customers are more discerning, which is reflected in loyalty levels. The prevalence of attractive offers and value added benefits offered by MNCs and nationalised banks are playing a role too in changing customer preferences, and are resulting in further diffusion of customer loyalty. Customers also face relatively low switching costs bringing another dimension to the loyalty dilemma. Understanding what your customers want and your ability to deliver them a hassle free, flawless service, in line with their preferences, has never been more important.
At the same time, digital start-ups and fintechs are rising in global popularity with services such as Digibank by DBS in India, or further afield, Monzo or Starling in the UK, and Ally in the US. We are seeing these digital solutions offer consumers highly competitive products and more insights and data on how they spend their money. For consumers, it feels like a more customer-centric approach.
It’s not just because today’s customer has more choice than ever before and is more demanding. It’s also that loyalty often sits across multiple business units. Marketing, brand, IT, partnerships and finance all have an important role in setting and delivering against an organisation’s loyalty strategy. And they all have different ideas, priorities and views on what needs reporting or what success looks like.
So, when you consider this complex, fast changing environment, it’s no wonder that true brand loyalty can sometimes seem out of reach.