Customer loyalty and how to motivate greater engagement: Insights from the Profitable Customer Engagement forum

11 August 2016
By Anne Dorst, Strategy Director

The Profitable Customer Engagement Forum, hosted recently in Singapore by the Asian Banking Forum, brought together senior level representatives from the banking industry across South-East Asia to discuss practical and innovative engagement strategies.

We hosted an exclusive breakfast briefing to address the importance of rewards and loyalty, outline insight from our recent mass affluent consumer research and draw upon proven strategies for driving more engaged, loyal and profitable customers.

With many interesting topics covered by our panel of industry experts, I've outlined below some insightful commentary around the more compelling themes.

Meeting the high expectations of the Mass Affluent

Our Mass Affluent research revealed not only the breadth and power of this segment, but also the fact that they are not being served as well as they could be by the financial services sector. While they are loyal to brands and companies, they know their worth and expect to be rewarded for their behaviour.  Increasing numbers of them feel that they are getting less value from their loyalty programmes and are willing to move their accounts to those who treat them as they deserve.  Both Bangkok Bank and OCBC prioritise the mass affluent segment and have dedicated approaches to keeping this segment loyal. OCBC even have a dedicated product, FRANK, targeted at first jobbers which is designed to enable them to move these customers to different products as they grow personally and professionally.

Personalised, meaningful rewards

Gone are the days of the one size fits all programme, or even a selection of general programmes.  The modern consumer wants to be recognised each and every time s/he engages with the bank and rewarded with tangible and meaningful benefits.  This can impact costs of programmes, so banks are exploring various methods to meet needs without breaking the budget.  Merchant funded rewards can be one method of driving down the costs as this not only gives meaningful rewards that motivate but also offsets costs.  Other methods take advantage of the latest technology and the desire for more experience based rewards by allowing top tier customers to join exclusive events, such as London Fashion Week or an F1 pit lane virtually.

Likewise, when it comes to feedback, they've learned to be flexible and allow millennials to express their opinion as often as they wish, while leaving it as an option to more traditional customers who don't wish to engage as often in surveys and scoring.

Interestingly, many of those attending the briefing noted that that they do not consider their loyalty programmes as simply a method of retaining customers - they are also primary acquisition tools.

Cross departmental co-operation

Key to all of this personalisation is of course, data.  Today's customer is using multiple channels to engage, transact and give feedback and needs to be recognised and acknowledged instantly in all of them. Successful institutions have given up the silos and invested to enable them to have centralised data and one bank-wide approach to segmentation. This customer-first view enables them to give the customer the service and response that they demand.

Calculating customer value correctly

Aligned to a bank wide approach to segmentation is a bank-wide approach to measuring customer value. While there are of course still product and division owners who have their own targets, the banks are using their centralised data to understand and motivate the most profitable behaviour for the whole organisation.  Rewards can now be calculated based on more complex formulas which combine and score product holding, balances and transactional behaviours in order to drive truly profitable behaviour for the entire bank rather than for simply one product.  These formulas can also help support other banking initiatives such as uptake of mobile banking, as reward bonuses can be given for those downloading or regularly using mobile apps.

Remembering the obvious

The fifth and final discussion point came from the audience; the personal touch.  While embracing new technologies and approaches, banking ultimately is a relationship of trust. Customers still need to know that their bank can be relied on to have their best interests at heart when it comes to meeting their financial goals.  Simply because we can and should use blended data and new channels to reach them, doesn't mean that we can forget the traditional and personal approach altogether.

Anne is Agency Services Development Director at Collinson, focused on helping financial services and travel brands drive customer loyalty, using a range of services and marketing expertise including consultancy, data and communications. 

Anne has over 20 years' experience in marketing and advertising, having worked client and agency side with brands such as MasterCard, American Express, Barclays and Microsoft.