We know that it costs a lot less to sell to existing customers than to acquire new ones. That's why many companies across industries invest in loyalty and reward programs. As well as an effective brand differentiator that inspires loyal customers to become brand ambassadors, they're a proven tactic for increasing revenue and market share and reducing customer churn.
Customers have come to expect rewards. They get points, discounts, free gifts, limited edition products and cash back offers whenever they go shopping or buy a coffee. They can even get rewards for posting an online review or a selfie posing with their favorite brand.
"Reward me for my business"
In the latest Gartner research, 76% of banks said customer relationship management and building sustainable customer loyalty was their top priority. Yet, customers are now demanding services that go beyond basic banking needs to ones that enhance the quality of their lives. When global consultants, CGI, asked consumers, "how could your bank improve your lifestyle?" 81% cited "reward me for my business" as the #1 factor.
Customers are aware that their bank holds a huge amount of information about them. They know you see all their transactions not just their spending with one retailer. Just like when they go to the supermarket, petrol station or bookshop, they expect their bank to reward them for their spendings.
Banks can't take customer loyalty for granted
Banks are at a competitive advantage when it comes to delivering loyalty boosting services. They already have all the behavioral customer data they need. With the right tools, such as VeriPark's loyalty management module which is a part of our VeriTouch Customer Engagement CRM solution, they can learn even more about their customers and deliver campaigns that transform the consumer experience, and drive satisfaction and loyalty.
Our loyalty management module enables banks to create highly flexible campaigns, integrated across all channels from online and mobile to kiosks and POS terminals. Campaigns can be multi-tiered and cumulative; as customers engage more with your services, they can earn more rewards. You can also run joint marketing campaigns with selected merchants or employee loyalty programs.
The campaign management functionality combines centralized customer data with advanced customer segmentation profiling to create personalized campaigns across all channels. This streamlines the process and makes running omni-channel campaigns with multiple partners much quicker and easier. Advanced targeting techniques allow marketing teams to target specific customers, products and merchants on particular days of the week or hours of the day.
Turning customers into loyal fans
Ivan loves his bank's loyalty program. He's just started a new life at university. As he was browsing the internet (he probably should have been paying more attention to his lecture) he clicked on a banner ad that offered discounts on some well-known brands.
The ad was from a bank, but the online gift catalog had offers for travel, restaurants, electronics – and his favorite sportswear store. He'd get points just for opening an account. That sounded like a good deal so he went ahead.
As soon as his account was verified, he received a text confirming he had 5,000 points that could be redeemed at many of his regular shopping and eating places. He also discovered he could get more points for using the mobile app to pay his bills each month and every time he uses his debit card, his bank sends him a text to confirm the reward points he's earned. On a trip to the shopping mall, he received push notifications for discounts at the bookshop and – this is where he got really excited – for the new climbing wall he'd been so keen to try.
Ivan had a great time. On his way out, he bumped into some of his new university friends and told them all about his bank's fantastic loyalty scheme. He also knows he'll get more points for referring a friend!
A world of customer benefits
Ivan's a perfect example of how banks can increase customer loyalty and retention by offering relevant and personalized gifts and incentive programs. He feels his bank is special. They're constantly updating their offers and they use gamification techniques that allow him to earn extra rewards and reach new levels; browsing for new deals has become part of Ivan's daily life.
His bank benefits from his loyalty and word-of-mouth recommendations. They can also analyze his spending and channel preferences, and boost revenue and ROI by selling him more targeted products and services. The varied reward programs have encouraged Ivan to use his bank's services more often – and he's very unlikely to switch to another bank.
In fact, reduced customer churn is a major benefit of reward programs. When a leading bank, introduced a loyalty program, using VeriPark's loyalty management module, they reduced customer churn by 40%. That has been a key driver to their sustained profitability.
How will you reward your customers? Would you like to find out more? If so, get in touch with us!