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What consumers expect from their loyalty programmes is evolving. To improve the experience in line with these expectations, financial service organisations must obtain a better understanding of their customers’ behaviours and motivations. Traditional banking loyalty programmes tend to segment individuals by income, spend, or the products they buy. Instead they should focus on what motivates and inspires their customers, and deliver value in line with these needs.
A common point of consumer dissatisfaction of loyalty programmes in general is that it is often hard to earn enough points to access the best returns. There is also a feeling that redemption processes are too complex and do not offer a wide enough range of rewards to appeal to distinct customers.
Giving customers greater flexibility in how they earn and access rewards will enhance the experience and differentiate the programme. For example enabling consumers to earn more for spending on day to day purchases, or enabling redemption with cash, points or a combination of both, and offering mobile wallet style services, enhances the interaction. Most financial service organisations do not have the technology to offer this degree of flexibility, but rethinking systems to offer this approach can greatly improve engagement and loyalty.
A loyalty programme has no value unless it genuinely benefits the customer, and that customer value is typically created at the point of redemption—the so-called ‘Golden Moment’. Providing relevant, appealing and attainable rewards prompts earlier redemption. The sooner a customer redeems, the more value they see in a programme, and these customers are twice as valuable as those who do not. Managing redemption proactively is key to customer value and driving an engaged relationship.
Here are three tips to think about if you are interested in driving loyal customer behaviour:
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Alexander Boehm Chief Executive Officer at PayRate42
05 September
Alexander Saleh Head of Partnerships at Coincover
02 September
Alex Kreger Founder & CEO at UXDA
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