How to build customer loyalty in financial services in 2022?
The financial service industry is probably the most critical area of the country’s economic system. It helps both people and organizations make, invest, and manage money.
The impact of covid-19 has impacted every industry, including the financial service industry. This has led the industry to focus on digitalization and customer-centric strategies. Otherwise, building and managing customer relationships & loyalty will become distant metrics for companies.
Digital disruption in the fintech market signified the importance of online presence. Thus digitalization is not an advantage anymore but a must-have strategy.
On the other hand, customers are more conscious of the quality of service they receive while choosing a product. They may avail of your product for the time being; there are high chances of switching to the competitor’s product if the questions like personalization and relevant experience go unanswered.
Why is customer loyalty important?
Customer loyalty is a key performance indicator that impacts the flow of business growth. Companies are now mainly focusing on building customer loyalty rather than acquiring new customers. This is because of the increased cost involved while gaining a new customer. A slight increase in loyalty can positively impact your business in many ways.
Customer loyalty means the difference between a one-time sale and a customer who comes back to you potentially for the rest of their lives ~ Tyler Read
Loyal customers are repetitive buyers of your product because they may have had favourable past experiences. It may be the product/service they liked, or the product is meeting their expectations. Whatever may be the reason, loyal customers are more likely to drive repeat purchases, therefore, adding long-term value to the business.
Benefits of Customer Loyalty
- Repeat business
- Scope to upsell and cross-sell
- Increased customer lifetime value
- Honest and quality feedback
- Get ahead from competitors
The last decade has witnessed rapid growth in technology, leading to the digital revolution in every industry. From the stage of building a digital presence, financial service companies started competing in the digital world.
Commercial banks, mutual funds, and insurance companies have developed their applications to serve customers better and engage them. Digital mediums have reduced the interaction gap between customers and entities by understanding your customers in creating touchpoints and engagements.
#1 Digital Applications
Applications have made the job easy for both companies and customers. These apps allow brands to connect with many users and promote themselves in the digital environment.
Applications also serve as a communication tool, create brand awareness, and expose the brand to customers. We can also use these platforms for lead generation and market research.
You can engage and retain customers by implementing various strategies to educate them with polls, tutorials, and quizzes. Gamify their experiences in the application by creating specific goals, leadership boards, and badges.
#2 Engage with customers on social media
Social media usage has been increasing for a few past years now. As per Hootsuite 2022 report, 58.4% of the total population is on social media.
- Create discussions, connect with customers
Replying and communicating with customers through social media keeps the customer engaged with your content. See social media as a two-way conversation, not a one-way ad channel.
People come to social media to explore, communicate, and learn the topics which interest them. So, sharing or replying to them can help engage and connect the channel.
- Social listening
Know when to lead the conversation and when to sit back. Take your time to understand what your audience is talking about and analyze how you can contribute to the “customer’s” needs.
- Post at the right time
Know when your target audience is most active on social media. You can maximize your post engagement and reach by learning about the timings.
- Optimum Post Lengths
It is hard to post the optimum length with layouts and formats on mobile. It’s harder to keep on top of social posts longer than it might look. The customer loses interest when the bars are longer.
#1 Personalization and Customization
The concept of personalization is an appealing topic many companies started implementing in their business these days. There is no reason we can’t give a personalized and tailored experience with the available data from digital space. We can segment and target potential customers with push notifications that deliver a customized message to the customers as per their needs and desires.
Remember that users also receive a lot of personalization communications. Instead of sending too many per day, aim for quality over quantity.
#2 Create an emotional connection
There is a big difference between satisfied customers and loyal customers. The satisfying factor is a rating or a review, and the loyalty factor is an emotion. Find ways to connect emotionally with your customers and make them feel special.
The covid-19 pandemic has made this more important than ever. Companies have experienced this in the initial outbreak. Loyal customers who have an emotional connection with the brand have become the primary asset while businesses struggled to sustain themselves.
#3 Build Trust and Confidence
Building trust in financial services is not easy because it involves money and people are very conscious. If the customer selected your company to perform financial service activities, feel advantageous because they chose you among many market players.
Earn a customer’s trust by creating a consistent and predictable above-average experience all the time. Transparency and accountability play an essential role in building trust and confidence.
#4 Engage them with Rewards
A designed and executed customer loyalty program can help build trust and create a significant business relationship with customers, access new customers, and grow your business.
Rewards excite the customer and help us to cope with their expectations. Make more plans and reward the customer by making it enjoyable. The rewards you offer should add value to your business and benefit your customer, creating a win-win situation.
#5 Don’t confuse a loyalty program with a marketing program
A customer loyalty program is ideal for improving your brand image, increasing customer lifetime value, and acquiring new customers at a low cost. When we look at the loyalty program of some companies, we get confused about whether it’s a loyalty program or a marketing program. Design a loyalty program that customers can easily understand and feel happy participating in and earning loyalty points.
Best companies have loyal customers because the overall experience is not just perks and points but the experience they get from the loyalty program. Participants share their experiences with friends, family, and on social media. It also creates word-of-mouth marketing for the company.
Long gone are the days of purely transactional customers. In 2022, financial institutions need to find new ways to personalize customer interactions to create an effortless and enjoyable experience.
Customer loyalty is an asset for the companies. Brands thrive on building and maintaining loyalty to benefit in hard times and stand out from the competition.
With the right mindset and fitting loyalty programs, you can create empathy and engage with customers by educating and rewarding them when necessary.