The struggle with customer loyalty
In an ever-changing world, financial institutions are constantly fighting over a shrinking share of wallet.
50% of customers
say that their banking relationships are neither rewarding, nor emotionally engaging
Signs of customer loyalty issues
Here are some clues that indicate present or future customer attrition challenges for your bank or credit union:
- Negative reviews and ratings - low Net Promoter Score (NPS) is an underlying sign that your customers are not happy with their banking experience.
- Low engagement and digital adoption - when users don’t find value in your digital channels and continue to rely on your branches, they’re more likely to churn.
- A low share of wallet - the average consumer holds 7.4 financial products, of which only 2.8 are with their main bank. If customers only see you as a place to access money and manage their accounts, they’re more likely to bank with others too.
What does customer loyalty mean to you?
One of the key metrics in measuring loyalty is churn rate. A high churn rate means you're losing customers, and it negatively impacts your bank or credit union in many ways.
It’s costly
Adding to the instant revenue loss, studies have shown that the costs of acquiring a customer is many times higher than the costs of keeping an existing one.
It impacts your growth
Bringing new products & services to market is fairly easy when you have a strong loyal customer base, but poor customer loyalty hurts your customer’s lifetime value and future revenues.
It damages your brand
Negative experiences tarnish your reputation. When people aren’t raving about your products and services, you’re not only losing out on returning customers, but also on their referrals.
Build customer loyalty today
Here are some surefire ways to improve retention in your bank or credit union.
Customers now expect seamless, self-service features from your financial institution, and engagement will lead to their loyalty. Beyond banking capabilities through personal finance services, such as cash flow analysis and spending insights, will take you beyond basic transactional activities. Providing actionable insights into your customers’ financial wellness empowers them to make smarter decisions. This creates unmissable value and lasting relationships with your customers. Your move: Deliver personalized and 5-star banking experiences at every touchpoint with
Customers ranked “poor service” as the number one reason they’re leaving their financial institution. When customers expect assistance on-demand, banks and credit unions must look into real-time communication capabilities that offer the convenience they need, keeping them satisfied and loyal. Next-level servicing tools empower employees, keeping them engaged and feeling valued, so they are more likely to extend the same positive treatment towards your customers and members. Your move: Give your customer-facing teams what they need for quick resolution, servicing, and upsells with
Your customers want to be understood and catered to. In a recent survey, half of the respondents said that their current banking relationships were neither rewarding (49%) nor emotionally connected (48%) compared to other fintechs. Engagement is the key to building loyalty, and your banking app is a great way to do just that. Think personalized financial advice, in-depth insights, next-best actions but also product recommendations. Reaching your customers at the right time in the right place is the best way to show that you understand them and their needs. Your move: Launch hyper-personalized campaigns for customers and create experiences that are tailored just for them with
3 reasons why you should invest in loyalty and retention
- Increasing customer retention rates by 5% help increase profits by 25% to 95% from repeat business and referrals.
- Moreover, US-based banks with a high Net Promoter Score had net interest income growth of 13% over 3 years, compared with 5% for laggards.
- Higher share of wallet. There is a proven correlation between customer loyalty and repeat purchases, leading to higher Customer Lifetime Value.
