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A fresh approach to customer loyalty – why banks and credit unions need ‘shopping inspiration’ to thrive

by on January 31, 2019

 

Mobile apps? We use them to pay, shop, chat and make our lives a little easier, one app at a time. But when it comes to banking and money management, apps are letting shoppers down. Mehmet Sezgin, CEO and Founder of myGini, explains how banks and credit unions could easily integrate retailer tactics into their mobile strategy to take the customer engagements to the next level. He argues that using the principles of dynamic loyalty, financial institutions can create a mobile presence that bridges banking, payments and shopping, and offers a truly rewarding experience.

There are over a quarter of a billion smartphones in the hands of US consumers, who rely on them more than ever. No later have we opened our eyes in the morning, our apps are already telling us it’s going to rain today, rush-hour traffic is especially heavy and our favorite artist has just released a new single – without even asking. We have become addicted to the convenience our smartphones offer and financial institutions have not failed to notice this.

Banking is going mobile – but financial institutions fall short of real engagements
Faced with increased competition from digital-only players, banks and credit unions understand they, too, must look to digital channels to satisfy changing consumer demands. They know that in order to appeal to a more tech-savvy audience they must have a mobile presence in place – but not just any.

Sure, an app that allows customers to make transactions and monitor their balance is useful, but it won’t help the financial institution get closer to their customer or provide greater customer value. First, they need to dig deeper and understand how their customers pay and shop.

Shopping is going mobile, too – but not all transactions end in customer loyalty
Retailers share this concern and have seen mobile technology as a solution to improving the shopper experience – witness the rise of NFC-enabled POS terminals and the ever-larger number of shopping apps. However, there is one aspect of their strategy that retailers have failed to give a truly mobile meaning to, and these are loyalty programs.

Offering rewards or discounts are an old tactic to incentivize consumer spending. They work – point cards, coupons and vouchers are all exciting at first – and then they stop working. People get bored, ignore them and finally throw away the cardboard stamp card, delete the app and click unsubscribe.

Static loyalty offers – that don’t change, can’t adapt to personal preferences and test consumers’ patience – simply make shoppers switch off. Studies show 57 percent of members abandon loyalty programs due to how long it takes to earn points.

If you have ever lost a coffee stamp card before earning the 10th cup, missed out on hard-earned rewards because they expired without warning or got discouraged after discovering how much you need to spend at a certain retailer before you see any discount, then you know the feeling.

Shoppers are being let down by evergreen loyalty programs that offer no new incentives, show no sign of individuality and simply fail to bring any excitement into shopping – this is something that needs to change.

A common fix for the shortcomings – dynamic loyalty
The key is in four simple principles that, together, make up dynamic loyalty: frequency, relevancy, interactivity and visibility. When a retailer’s loyalty program is designed for frequency offers, it can continuously retain shopper curiosity through regular, personalized promotions. Personalization, in this definition, is more than just knowing what a person wants – it’s factoring in whether they are likely to be interested at that given time.

Knowing what people want and when they want it is a great start – but loyalty programs need to go even further to earn shopper loyalty and trust. Interactive platforms can remind cardholders of any available – or soon expiring – deals and rewards, when the time is right. Visibility of transactions and completed deals further reinforces trust, demonstrating to customers that they are in control of their expenses and are getting the rewards they signed up for. If a loyalty platform cannot do these things, it is as good as if it was not even there in the first place.

The window of opportunity and how to make it count
The best way to ensure offers are in front of the consumer at times when purchasing decisions are made is to have them available, visible and interactive on the device they use the most – their smartphones.

Research shows that at any given time, 84% of Americans are shopping for something, and nearly one in four of these shopping occasions start with smartphones. Deals, promotions and rewards need to seize these moments to offer real customer value.

Loyalty programs accessible through the mobile banking app spell the end of boring loyalty offers that sit inactive in a physical wallet, crumbled up at the bottom of a bag, or in an email reminder that did not make it past the spam filter. When a loyalty program is in front of cardholders, cleverly communicating the value of a service or product, it makes them feel good about spending and motivates them to return.

How banks and credit unions can drive this change
A mobile solution that sits at the intersection of shopping, payments and banking can revolutionize the concept of loyalty, and banks and credit unions are well placed to lead this revolution. On mobile, financial institutions can magnify retailers’ reach and benefit from the subsequent transaction and shopper loyalty. This is not a futuristic concept anymore – fintechs are already making it a reality.

With mobile platforms like myGini, customers can view and get notified of personalized offers through the banking provider’s app, which means every time they earn rewards, find new deals and receive a helpful reminder of a bargain they do not want to miss, the financial institution gets closer to establishing their debit or credit card as the consumer’s number one card of choice.

Keeping up with customer expectations
Consumers are using their smartphones to shop, research their next purchase and get smarter at shopping. An experience that gives them the feeling of convenience, choice and being personally cared for makes them return again and again. Today, the best place they can get this is from the comfort of their smartphones, and banks and credit unions need to step up and make this work in their favor.

When consumers can trust financial institutions to help them make smarter purchasing decisions on mobile, they will trust them with money management. So, make it mobile and make it dynamic – it’ll make customers happy and the bottom line healthy.

This content is for CU BUSINESS eMagazine + WEB ACESS and THE TEAM BUILDER (GROUP SUBSCRIPTION) members only.
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