4 effective steps to build consumer loyalty in your bank
It's no secret that retail banking is at a crucial point in its history. The rise of technology - like mobile and online banking - has made the traditional branch more obsolete. While it is far from the end of the "old way" of banking, financial institutions will have to evolve and adapt if they want to remain relevant.
Thankfully, there is one valuable tool for banks that want to stay at the forefront of their industry: consumer loyalty. Loyal customers will be more devoted to their bank, more trusting and more willing to try out new products and services. A loyal customer base is a more profitable customer base.
Here are four effective tips so banks can turn their average customer into a loyal one:
1. Improve customer service
The first tip may be the most obvious, but it is surprisingly overlooked in many banks. Customer service is a must before any other loyalty programs can be implemented. This is because customer service covers every aspect of the bank - from the moment a new customer walks in the door to selling a long-time consumer on a new service.
Customer service should be:
- Timely - Respond to any requests or complaints quickly.
- Polite - Employees can't overreact, be rude or disrespectful when dealing with customers.
- Personal - Customer service should be personal. Learn names and respond in customers' preferred medium.
Quality customer service is the foundation of loyalty.
2. Create better products
While there are many "customer service gimmicks" out there, a better option is to simply create great products. Having the most user-friendly mobile banking platform, or the lowest rates, or no-fee checking, will do more to inspire loyalty than many other strategies.
It is important to remember what customers want today:
Build systems and products that cater to these four elements. Mobile and online banking is one part, but so is ditching the teller wall in favor of kiosks and the universal banker model - where tellers are out and multi-faceted employees are in.
3. Provide rewards
The third step is to reward customers. This goes beyond the basic: "Here's $5 for every $100 you spend" type of reward. Rewarding customers should be about fostering a relationship and building trust.
"Personal rewards are better for customer loyalty."
For starters, learn how individual customers interact with your bank. Does one person never come to your branch, instead only using online services? Reward them with lower fees for paying more bills online, or for switching to paperless billing. If you have a customer who comes in all the time, give them a gift card after a set number of transactions or after opening a new account in person. Make rewards enjoyable, fun and personal.
4. Leverage technology
The final tip is all about technology. This relates back to what customers want, including rapid service. Technology can make that happen, and if your bank is easier to work with than your competitor, you'll be more likely to have loyal customers.
Technology you can use includes online and mobile banking, as well as smart ATMs and even tablets in your branches. Customers can come in, and your bankers will have tablets handy to help instantly with whatever question they may have. Another valuable approach is to create those teller kiosks, each with an ATM, cash recycler, computer and other tech features. This removes the need for a line, speeds up service and lets one employee handle a variety of customer needs.
At the end of the day, customer loyalty doesn't have a one-size-fits-all solution. It requires a personal approach that is tailored to individual customers' needs, desires and preferences. Then, your bank will start to see loyalty grow.