Retail banks are racking their brains trying to work out how best to stand out when it comes to retaining customer loyalty. Traditional reward programmes with points and cashback are no longer considered to be pioneering schemes but essential elements of
a card marketing programme.
Banks who want to set themselves apart from the pack are now looking further ahead and trying to grasp what it is that puts their cards at the top of the customer’s wallet. Let’s look at four loyalty drivers that are coming to the fore in the market.
1. Influencing attitudes
While conventional marketing practices tend to measure consumer loyalty by behavioural traits such as the number and frequency of purchases made, the spread of social media means that a loyal customer attitude is becoming just as important to banks. Today’s
customers are often prolific users of social networks and their brand preferences are easily transmitted via the likes of Twitter, Facebook or Pinterest. The next milestone for banks is to nurture these loyal attitudes to maximise the levels of social influence
amongst connected consumers.
2. Offering personalised rewards
Modern consumers expect highly personalised services. When they shop online, they are presented with product recommendations based on past purchases. As a result, customers are now expecting bespoke rewards from their loyalty programmes. To maximise engagement,
loyalty programmes must guide the consumer to redemption choices that are relevant to them or risk losing customer interest.
3. Differentiated rewards
Tiered loyalty programmes that provide differentiated rewards and privileges based on the level of commitment exhibited by consumers are now gradually appearing in mainstream sectors. Well-known brands such as Starbucks, Safeway and Timberland all have tiered
loyalty programmes in at least one of their respective markets, and more brands are likely to follow in their footsteps in the not so distant future.
Higher-value consumers expect differentiated rewards and privileges from the masses; it is an essential component in delivering a loyalty programme that is attractive across the board. These consumers know how valuable they are and expect to be treated accordingly,
and if not, they are likely to defect to someone who does recognise their value and commitment.
4. A blend of ‘hard’ and ‘soft’ rewards
Most loyalty programmes provide customers with ‘hard’ rewards, which are tangible items such as discounts or gift certificates. These types of rewards are an essential element of a loyalty scheme when given to the right customers at the right time. On the
other hand, ‘soft’ rewards, such as priority lanes or VIP passes, are more likely to nurture and strengthen the emotional bond with the consumer. In all cases these rewards should be given selectively to emphasise to the consumer that their value has been
recognised and, therefore, rewarded accordingly.
So the next time you are considering your loyalty programme, look beyond the obvious. Simple tweaks can differentiate between becoming another ‘me too’ programme versus standing out as an innovator.