5 loyalty trends that will impact the financial services market in 2016

15 January 2016

When it comes to loyalty, retail banks with loyalty programmes should spend their 2016 resources in building a multiplicity of consistent channels – including mobile – offering optimized, data-driven, targeted and real-time interactions with their customers.

Mobile Loyalty

In order to follow up with the new trends in customers’ habits and to stay effective, financial institutions with loyalty programmes need to deepen their presence into the mobile channel.

Indeed, mobile devices are part of the intimacy of the customers’ life and are used on a daily basis. According to the Loyalty Guide, the average time we spend being active on our phone is constantly growing, now accounting for 23% of the overall time spent with any media (The Loyalty Guide 7, http://www.theloyaltyguide.com/executive-summary.asp).

Thus setting up Mobile Loyalty apps would add value to a loyalty programme and would strengthen the relationship with customers and their programme via a valuable and easy-to-use channel.

Offering a fresh, modern and easy-to-use channel for their loyalty programmes, financial institutions would also improve their perceived image in the eyes of a constantly connected society.

Omnichannel

Behind the mobile channel, financial organizations bringing consistency across multiple channels will have a significant advantage.

A study by Retail Systems Research showed that multi-channel costumers are significantly more profitable than single channel costumers according to 47% of retailers surveyed –with a rise from 38% in 2012 and a sharp rise from 28% in 2009. (http://www.profitableretail.com/2013/07/the-long-road-to-profitable-retail-through-omni-channel-marketing/#more-672)

As the daily interactions between a bank and their customers go through an increasing number of channels –mobile, social, internet… etc- banks have no other choice than to cope with the omnichannel trend. The key to success is obviously to bring consistency across all channels, and similarly to the retail world allowing banking customers to start a banking interaction on one channel and without any disruption; an interaction that can be easily continued and concluded on another channel.

Data Analysis

Retail banks will continue to exploit one of their best assets – data – to gain valuable insights in order to drive decisions.

The white paper published by Allegiance “Achieving customer experience leadership in the era of Big Data” (by Thomas Lacki Ph.D. - http://www.maritzcx.com/lp/bring-your-data-to-life/?utm_source=pr&utm_medium=pr&utm_campaign=big-data) shows that while most managers agree that businesses should improve their relation with the customers, they do not necessarily exploit the goldmine of customers’ data that they own which could help them identify shopping and purchasing behavior.

Retail banks need to move from just cumulating and storing the data that is being constantly generated to exploiting that data. Banks who will combine big data with advanced analytics will be better positioned to engage with their customers at the right time, on the right channel, with the right interaction.

Personalisation

Personalized communications and interactions allow to build a special relationship with customers.

In the white paper “Retail loyalty and the consumer" published by Conlumino (http://www.retail-systems.com/rs/whitepapers/100913conlumino_sas_report.pdf), we learn that 81.6% of customers are more likely to purchase if they have an emotional connection with the brand / retailer.

Retail banks who will introduce personalized interactions in their loyalty programme will be a step ahead in the path to build an emotional bond with their customers.

Real Time

Real-time interactions bring major advantages in the long-term strategy to strengthen relationship with customers.

In the “Driving Retail Loyalty” white paper published by ICT Infotech, the importance of real-time actions in loyalty is highlighted: “However well designed, however well targeted, most of such interactions with the customer happen offline, through emails, posts, mobile offers, catalogs, or the website. Very few of such interactions happen in real-time, at the moments of truth, when the customer is in the retail store, when the impact and relevance of such interactions can be the maximum.”

Banks who implement real-time interactions with customers – at stages such as engagement, reward, redemption – will inject life into their loyalty programmes which will get their customers more involved and less likely to quit the programme.