Almost a quarter of consumers admit they’re not loyal to their bank/financial services provider, while just one in five feel their bank values them as a customer, according to new research from Ello.
The research of more than 2,000 UK customers also uncovered just 18% believe it pays to be loyal to their bank/finance provider, with those surveyed citing good customer service, trust and reliability as having the biggest impact on their decision to stick with a provider.
Furthermore, the data revealed that over a 12-month period, the average consumer spends £140 on banking/financial services (not including big ticket purchases such as mortgages and loans etc.). While they’re typically loyal to their provider for seven years and less than half (40%) have been a customer with their bank for more than 10 years.
“Banks and financial services companies are operating in a completely different landscape than they were just five years ago – many who’ve been in the sector for decades might even find it unrecognisable.
“As a result of countless new innovations in recent times, loyalty is getting more and more difficult for banks to hold onto, as customers look to make the most of new offerings and diversify where they put their money. With this only set to accelerate over the coming years as fintech continues to thrive, financial services firms would be wise to assess their customer experience and loyalty strategies now, and get ahead before it’s too late,” comments Michael Kalli, Managing Director at Ello.
The research also revealed consumers are becoming increasingly conscious of who they bank with:
- 60% of consumers admit bad interactions impact their loyalty to a brand and often result in them cutting ties
- Half would pay a brand more for a product/service over their competitors if they trusted them/knew they were reliable
- 24% would leave a brand if they found out they mistreated employees
- 72% say they’re loyal to their bank/finance provider
- Almost a quarter of consumers admit they wish their bank offered them more perks
- 25% confirm they’re rarely offered any perks from their bank
- Just 6% are often offered perks from their bank
On the sectors it pays to be loyal to, this is how various industries rank according to consumers in comparison to banks/financial services:
- Retail (supermarket)
- Mobile provider
- Food service and restaurants
- Finance (banking)
- Hotels and hospitality
- Travel (airlines, trains)
- Utilities (gas and electricity supply)
- Insurance (home, car, life/health)
- Telecoms (landline, at home broadband)
- Media (streaming services – TV, music, entertainment etc.)
- Retail (fashion)
- Leisure (gyms, cinemas)
Ranked in order of importance, the factors likely to result in increased spend on banking are:
- Good customer service
- Reliable/good quality product/service
- Trust in the brand/business
- A loyalty scheme
- Ethical business practices (incl. paying employees fairly, supporting employee wellbeing)
- Receiving regular offers relevant to them
- Brand values aligning with their personal values
- The business giving back to charities/communities
- More engaging/personalised/more localised marketing
“We’re anticipating the banking/finance sector to innovate considerably over the next few years. With this will come increased competition, making it more crucial than ever before for those in the industry to be focusing on ramping up their customer retention strategies. Advances in technologies – notably AI and machine learning – are going to make personalisation a breeze, but it’s how financial service providers use this data that will make all the difference.
“Building trust and making customers feel valued with bespoke rewards, while offering great service and reliable products are the key factors that will instil long-term loyalty. We’re confident the next few years will bring with them a huge range of opportunities for bankers/financiers to build huge gains on the loyalty front, but it’ll be interesting to see who utilises the tools available effectively,” Michael concluded.
To find out more and to download the full ‘banking on customer loyalty?’ report, visit: https://ellomedia.com/banking-on-customer-loyalty/