Banks’ loyalty strategy failures mean that only one quarter of UK consumers feel that their bank values their custom. Failure to recognise and personalise services are the biggest weaknesses in banks’ loyalty strategy according to a report from Collinson.
The survey reveals many financial institutions are failing to offer a personalised experience for customers, putting loyalty at risk.
According to Collinson, 26% of consumers currently feel they are recognised for their loyalty and treated like a valued customer. Just 23% of consumers agree that the loyalty initiatives they receive from their bank are personalised to their interests.
In addition, only a third says their bank treats them as an individual not an anonymous customer.
Banks loyalty strategy – serious data failures
Part of the issue is banks’ failure to use data to understand why their customers are loyal to their organisation.
A mere 39% of businesses surveyed have a flexible loyalty programme in place providing a highly customised experience for customers.
Less than half (45%) analyse the behaviour of their most loyal customers, adapting recommendations for new products and services accordingly.
Moreover, a staggering number (53%) are not collecting sufficient data to build a bigger picture of the customer.
This is despite such data allowing businesses to gain a deeper understanding of who their customers are. And in addition it identifies what customers want, allowing brands to provide a flexible, personalised offer.
Banks loyalty strategy – banks need to be brave
Steve Grout, Director of Loyalty at Collinson, says: “Today’s customers have more choice than ever before. They demand to be treated as an individual and are increasingly inundated with benefits and rewards. So an offer that is not personalised is more likely to drive customers to a competitor than increase brand loyalty.
“Companies need to be brave when differentiating themselves from competitors. They need to embrace the plethora of means to extract the data that is at their fingertips. With increasing competition across multiple industries, businesses need to be innovative in their loyalty strategy.
“It is clear from our research that organisations are still not placing enough emphasis on truly understanding their customers. Nor are they adapting their strategies accordingly.”
Research for the survey was conducted by Forrester Consulting on behalf of Collinson.
Banks loyalty strategy – Canada leads the way
Genuinely innovative bank loyalty programmes in the UK are few and far between. By contrast, the major Canadian banks place rewards programmes at the heart of their marketing strategies.
For example, Royal Bank of Canada is winning plaudits for its rewards strategy. RBC’s Reward programme has more than 5 million customers.
Meantime, rival Toronto Dominion is kicking off a 11 year deal with Air Canada, investing over C$1bn in the programme.