Banks know that delivering a great digital experience is essential to remain competitive in terms of attracting and retaining customers. Big data analytics and other new technology can help them get there, but care must be taken not to lose focus on matching the wants and needs of individual customers, especially those in the top tier of earners, who are likely to respond to digital offerings. Being able to deliver timely and contextually relevant marketing, and to potentially connect with their customers’ emotional drivers, would be big boost to loyalty.
Research by Collinson Group—customer experience experts—into the top 10-15% of earners revealed four different groupings within the affluent middle class, cutting across traditional demographics. Each of these groups responds to digital differently, but all are embracing its benefits:
• Prudent Planners continue to value face-to-face interactions as well as digital services, so retaining in-person contact as an option is key.
• Stylish Spenders expect companies to know who they are, and offer highly tailored offers and content. As a result, they can be powerful advocates for brands that develop relevant and engaging digital experiences. Banks should look to build services with responsive platforms, as well as applications that provide access to account details and financial planning services.
• Mid-Life Modernists want a seamless experience across digital channels and are the most active users of smartphones, tablets, smart TVs, and apps. In the United States, 90% of consumers use their mobile phone for ten hours or more per week.
• Experientialists live for the moment and expect fresh content, regular updates, and unique experiences from their financial service providers.
Understanding the nuances between these four groups will help banks evolve their loyalty proposition. It is also important to note that experiences are increasingly the new currency for today’s affluent middle classes. Where previously they were motivated by luxury goods, they now place a higher priority on family and life experiences such as travel, as well as those offered by the products and brands they favor.
This approach has led to innovative loyalty initiatives from brands such as American Express. The company recently enabled customers to use their reward points to pay for Uber rides. This illustrates the smooth transition between brands, and an incredibly convenient experience for users.
Create brand advocates
The importance of mobile can also no longer be understated. Customer benefits like lounge access, card assistance, and insurance solutions need to be offered on mobile applications, and responsive websites to ensure a truly omnichannel experience. These modern loyalty strategies offer banks the opportunity to increase revenues through greater uptake. As the rewards are considered more valuable, banks can raise their card fees without fear of frustration or resentment from their customers.
“There is a real opportunity for the affluent middle class to become powerful brand advocates, who reward organizations that cater to their personal motivations,” says Christopher Evans, Collinson Group director. “This can happen at various points of customer interaction as long as there is value exchange for customer participation. Our research has showed that 72% are willing to make a repeat purchase from a brand they feel loyal to, 70% would recommend that brand to friends and family, and 53% will choose a particular brand even if it is more expensive.”
5 ways to improve experience and loyalty
Collinson Group suggests five ways that banks can improve the customer experience, and their approach to loyalty:
1. Personalized and consistent communications, rewards, and service regardless of how customers choose to interact with a bank is important for the affluent middle class. Customer engagement improves by a third among individuals who feel understood by their bank and a further third for those who say they receive a seamless multichannel service.
2. Not being rewarded for loyalty is the biggest frustration for affluent middle class consumers, cited by two thirds of respondents, ahead of poor interest rates and charging unnecessary fees.
3. Choice of reward is important in boosting loyalty: This includes a breadth of offering from concert tickets to unique, money-can’t-buy experiences, which appeal to the changing motivations of affluent consumers.
4. Simplify redemption. Giving customers greater flexibility in how they access rewards will enhance the experience and differentiation of a program.
5. Social media and mobile services encourage an always-on attitude and mean consumers continually expect fresh content from reward programs. There is an opportunity for card providers to offer real-time, tailored promotions and redemption at the moment of purchase online, and in store.