In the payments industry, gaining and, most importantly, retaining customer loyalty is akin to finding the Holy Grail. With the proliferation and commoditisation of loyalty programs across the globe today, it is becoming increasingly difficult to offer consumers a unique experience that will encourage the all-important emotional brand attachment and convince them to stay put. Until recently, financial institutions sat quite comfortably in the knowledge that consumers tend to enjoy relatively long-term relationships with their banking services providers, often spanning decades. However, it is now easier to switch banks than ever before, and as the era of the publicly-disgruntled, social media-enabled customer hits full swing, the goal posts to achieving long term customer loyalty have been well and truly moved.
Today, loyalty is much more than just repeat behaviour; the idea of rewarding frequency of spend to incentivise the continued or increased frequency of spend is outdated. A successful loyalty program is no longer a product silo or an add-on, it is part of a potentially very profitable strategy that is channel and product independent. It is the opportunity to engage with, and reward customers for their relationship with their financial institution in its entirety, and this level of interaction is now expected by the end-user.
Loyalty programs have evolved to the extent that whilst repeat behaviour pays the bills, it is consumer data that drives value. In this customer-centric era, utilising this data gives financial institutions the chance to influence behaviour and refrain from relinquishing complete control. Correctly implemented, loyalty programs can increase revenue through customer acquisition and retention, cross and upselling activities and actively reward customers for everything from increased spend and spend frequency, to using more cost effective banking channels.
FIs are quickly moving away from a give-to-receive model and concentrating not just on the customer relationship but emotional accessibility to the brand. Some institutions have begun to sponsor community events and reward customers for life experiences based on their social media feeds, for example, birthdays and key wedding anniversaries. In addition, by allowing customers to choose how to spend their points, whether paying off fees, receiving cashback or playing a round of golf, rewards are seen as much more personalised and intuitive.
Payments is a sophisticated business and one that the consumer is very sensitive about. Customer relationships are evolving and if a financial institution, retailer or other service provider uses loyalty to its full potential, these relationships could last a lifetime.
About Bethan Cowper
Bethan Cowper is the Head of International Marketing at Compass Plus, a company that offers comprehensive, integrated and flexible payment and retail banking software to payment service providers and financial institutions worldwide. In this role she leads the strategic global marketing efforts of the company from the Nottingham office in the UK. Prior to Compass Plus, Bethan worked in a number of senior marketing roles covering brand management, product marketing and global campaign management in the financial services, IT and publishing sectors.
About the company
Compass Plus provides comprehensive, integrated and flexible payments and retail banking software that helps payment service providers and financial institutions meet rapidly changing market demands. Its diverse customer base spans retail banks, processing centres, national switches and personalization centres in dozens of countries across Europe, Asia, Africa, the Middle East, North and South America. With 25 years experience, Compass Plus helps build and manage payment systems that generate new revenues and improve profits for its customers.
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