Why Financial Marketers Should Focus on Customer Loyalty in 2022

Consumers say they will remain loyal to financial institutions that give them the best experience. The huge shift to digital during the pandemic creates a major opportunity to use digital experiences to increase loyalty. Here's where banks and credit unions should focus their efforts in 2022.

Consumers are demanding empathy more than ever. That is what 15,000+ global consumers and business buyers said when surveyed about a new era of customer engagement for the Salesforce “State of the Connected Customer” report. While 66% of customers expect companies to understand their unique needs and expectations, only 32% of executives say they have the full ability to turn data into personalized prices, offers and products in real time across channels and touch points.

Digital services have made the ability to switch financial service providers easier than it ever has been, but they have also created a great opportunity to drive loyalty through personalization.

Experiences are just as important as the final offering when driving loyalty. 80% of people agree that the experience a company provides is as important as the product or service it offers. With the pandemic driving more digital adoption, these experiences have been mainly digital. In the fourth edition of the Connected Shoppers report, we saw that in 2021 three types of digital channels grew transaction share by nearly 40%: brand websites and apps, retailer websites and apps, and online marketplaces. Emerging channels’ share of transactions increased more than 20%. In 2023 it’s expected that physical stores will regain a bit of share at the expense of some digital channels, but delivery apps and others will hold onto their gains or even grow.

Transaction trends digital versus physical

A surge in digital transactions brings new competitive threats. 70% of people agree that loyalty is more difficult to maintain than ever. In addition to changes to physical locations, the stopgap measures to keep in-person associates working amid temporary store closures are here to stay. Fewer than half of in-person associates use a mobile device during their working day even now.

Going forward, executives want to empower associates with the technology they need. They project that 74% of associates will have a mobile device in 2024, an increase of 54% over 2021. That brings a very clear strategy for loyalty.

The Role of Technology:

More executives want mobile technology in the hands of employees — up to 74% by 2024, an increase of 54% since 2021.

Recreating the In-Person Experience in a Digital World

We know that financial institutions are rapidly going digital because consumers expect them to be where they are. Shopping on Instagram, chatting on WhatsApp, browsing product reviews on Trustpilot. Bank customers and credit union members want to have excellent experiences on every channel, at any moment.

We are in the era of a new customer-brand relationship. And marketing leaders are often the ones driving this inside-out transformation to meet the imperatives of both business growth and an excellent experience across all channels.

Whilst technological agility becomes more essential, the true North Star is winning consumers’ trust. You build it over time by listening to needs and wants. And then responding with relevancy every time.

This is where the line has blurred on digital channels between friends and brands. Consumers expect brands to talk to them in the same authentic, human way as friends do. These interactions done right help grow stronger relationships, and foster loyalty.

For example, our research shows that in 2020 the amount of social media referrals to ecommerce websites doubled quarter over quarter. The number of orders from this channel doubled too, and this trend has continued.

Consistently Deliver Personalized Value Across Every Engagement

The 7th State of Marketing Report, shows that the average consumer interacts with nine different touch points. This aligns with how financial marketers are engaging with customers, with over 77% using nine different channels. To secure sustainable revenue growth, financial institutions need to invest in relationships over time, consistently offering convenience and relevance within every interaction. It’s important to get that customer data identifying what channel they prefer, especially with so many different ways to engage.

Discover What Is Most Valuable for Every Customer

So what interactions can be identified as valuable for relevancy? Personalization starts with data and the 7th State of Marketing Report tells us that seven out of ten customers are willing to share personal information with brands, but only in exchange for some kind of value.

Looking at the top metrics tracked by marketers, below, what is interesting is that “customer satisfaction metrics” remains the key focus for financial marketers, with 35% voting it the most important, significantly more important than any other KPI.

Most important marketing metrics and KPIs

Other customer-metric scores like customer referral rates, customer acquisition costs, and content engagement are seeing the biggest boosts in popularity of metrics now being tracked. Metrics are only valuable if action can be taken using them, and financial marketers have come a long way in their ability to both automate measurement and evaluate results live — enabling them to take action while a campaign is in flight. 85% of marketers have said they are using marketing attribution tools. These are pivotal for being able to optimize marketing strategies.

However, marketers have become more KPI-conscious across the board, with customer referral rates, customer acquisition costs, and content engagement seeing the biggest boosts in popularity. Regardless of the specific metric, the increasingly strategic nature of marketing means that KPIs must be in line with those of company leadership. 78% of financial marketers say they align their KPIs with those of their CEOs.

Loyalty Programs Are Table Stakes

The retail industry is a leader in loyalty programs and a good indicator of how financial institutions can prioritize where to focus. One of the most surprising findings is how important loyalty programs are for shoppers. The Salesforce Connected Shoppers report captures some interesting findings when it comes to loyalty, shown below.

Importance of loyalty programs to consumers

The first set of bars shows the top responses on what makes shoppers more likely to buy from a brand. The top two offerings are free shipping and simple/free returns. The third, though, is a loyalty or rewards program.

The second set of bars shows the attributes of a shopper’s favorite brand. The No. 1 response was a loyalty program. Shoppers even want their favorite brands to reward them for shopping with them.

Loyalty Creates Better First-Party Data in the Age of Privacy

In the age of privacy such as GDPR changes and Google’s plan to end third-party cookie support in 2023, big data becomes less of a strategic imperative for marketers and the focus now becomes first-party data. While big data is important, it’s directional, less specific. Big data is about quantity and less about quality.

However, the small but mighty ‘smart data’ — the first-, zero- and second-party data — is actually incredibly powerful given it’s depth and comprehensiveness. Small data is built from what you have, it’s a seed that you can grow because it’s focused and purposeful and has more accuracy. In the end you need to start with the small data — given it’s quality and actionability — this is your starting point and loyalty is at the heart of capturing that data.

The model has changed and we are moving away from third-party cookies so we need to leverage the power of the existing data (current customers) to drive awareness and amplification.

Changing With the Times:

Third-party cookies used to be the cornerstone of customer data, but marketing experts now recommend relying more on first- and second-party data to assemble customer profiles.

You are essentially ‘flipping the funnel’/customer journey by leveraging the data you already have versus hitting everyone through inefficient media. Loyal customers create two opportunities:

  1. Use media evangelists — through social media, reviews, viral, word of mouth. It is often much more efficient than any paid media.
  2. By leveraging what you know about customers (first-party data attributes), you can “find” these same types of customers using “look alike” modeling driving new acquisitions.

Essentially you are focused on the smaller more comprehensive data you have versus the broad brush stroke data that is easy to collect but difficult to drive impact. Collecting this great first-party data is why loyalty remains ever important in your 2022 strategy.

This article was originally published on . All content © 2022 by The Financial Brand and may not be reproduced by any means without permission.