Key Ways the Finserv Industry Can Foster More Meaningful Relationships with Customers

Until recently, customers were loyal to financial services (finserv) institutions from childhood all the way to retirement. But in today’s fast-paced, tech-driven landscape, that’s simply no longer the case. With more fintech disruptors joining the financial sector, digitally-savvy customers have more choice than ever at their fingertips — and they’re searching for the best deals. This leaves the entire finserv industry – the banks, investment firms, insurance and credit card companies – competing to attract and retain customers.

According to recent research from Ernst & Young, Asia-Pacific banks, in particular, are falling short on customer loyalty: 63% of survey respondents say they have more than one product outside their main bank. And many of the more than 4,700 retail banking customers across the region that were surveyed admitted to feeling unappreciated, unrecognised and under-rewarded by their main bank.

Payment organisation PSCU, in its ‘2021 Eye on Payments’ study, further found nearly eight out of 10 survey respondents agree or completely agree that they want to do business with a financial institution that knows them personally. This sentiment is echoed in Cheetah Digital’s 2022 Consumer Trends Index, which reveals a 110% increase year-over-year among APAC consumers who want to be treated as an individual. They want more personalised messages based on their own individual wants and needs. Unfortunately, only 27% feel like their brands truly understand them, creating a huge gap.

Relationship marketing starts with an experience

Whether it’s a lack of trust or an absence of enthusiasm, finserv institutions face more than a few challenges on their way to building loyalty with customers. These industry-specific obstacles are precisely why it’s important that brands take advantage of every opportunity to strengthen connections. According to the same Ernst & Young research, nearly 80% of respondents indicated they would value a loyalty program from their financial institutions.

However, before implementing a full-blown loyalty program, it’s vital finserv institutions start building stronger relationships with their customers first. And an effective way to do that is with experiential marketing — the use of experiences to market a product or service. The success of these campaigns comes down to a few key components of the experiences they create.

Create value for everyone

To inspire loyalty with current and potential customers, experiential marketing needs to include opportunities with real value. In recent years, many financial institutions have taken a very different experiential approach by helping customers improve their financial health. This is an area where Kiwibank is charging ahead, seamlessly blending education with brand awareness in its recent campaign, which uses a strategic survey to tell consumers what their ‘money personality’ is while providing matching Kiwibank products and services.
Upon completion of the survey, consumers are provided instant gratification, being told exactly what kind of ‘saver’ or ‘spender’ they are, immediately. And with the information the consumers provided in the survey, Kiwibank is able to take them on a personalised journey over the next few months with content tailored to their individual needs.

HSBC, another stand-out in the space, recently launched a new financial wellness offering, “to benefit individuals, corporate partners, and community organisations”. The program, which includes both an online platform and in-person workshops, is available to everyone whether they’re a customer or not. When it comes to inspiring loyalty, demonstrating that you care — about customers and non-customers alike — is a solid place to start.

Be exclusive and inclusive

Consumers expect to be rewarded for their spending, so what better way than with unique, personalised experiences? When it comes to exclusive experiences, few do it better than American Express. From early access to tickets for concerts, sporting events and theatre to just about everything else imaginable, Amex hooks its customers up with the perks.

Regardless of the approach, finding ways to connect with customers in a way that’s valuable to them is a surefire way to create loyalty.

Maintain a personal touch

At the same time, smaller gestures to build trust – and ultimately, loyalty – can have as much impact as big, bold, exclusive experiences within financial services. Personal connections with customers can be as simple as a thank you. Of course, special rates, discounts and bonus points for loyalty also work well. That’s what TD Bank does every year with its #TDThankYou campaign to celebrate its customers.

The campaign includes personalised experiences like trips and tickets, for instance, for some customers delivered via a clever ‘ATM’ (Automated Thanking Machine) and thousands more received $20 as a show of thanks, either via email or in person at certain branches. The campaign has seen as much as a 26% increase in brand affinity. Incorporate personal touches to show appreciation, surprise, delight and connect with customers in a way that goes beyond transactions to strengthen loyalty over time.

The four stages of relationship marketing to build loyalty and transform customers into brand fans.

1. Acquisition: The first step in building relationships is engaging unknown contacts and turning them into known consumers with rewarding experiences. Start the conversation by offering a value exchange that utilises surveys to gather zero-party data along with basic contact details. Then, map this in your database and start a new record of each and every person who engages with your brand.

2. Engagement: Now that you’ve made contact, it’s time to establish an intelligent marketing strategy. Forget ‘cast and blast’ campaigns. Instead, use real-time signals and create journeys for your audience to deliver the best message at the best time.

3. Personalise: Time to use your data to take the relationship to the next level by adding next-gen personalisation tactics. Apply machine learning to your data to produce predictive and prescriptive outcomes in real time or via batched processing.

4. Retention: Congratulations! If you’ve implemented the first three stages successfully, your task of fostering loyalty and retaining customers will be much easier. But don’t take loyalty for granted, and never assume repeat purchases equals loyalty. Now if you’ve been building your relationship, listening to your audience and delivering on your brand promise and value, loyalty is easier to achieve.