Banks can no longer rest on their laurels. Customers are more fickle than ever and are now increasingly expecting à la carte, personalised services which are relevant to their needs. The research supporting this is also stacking up.  A recent service survey report from Accenture found that 46 percent of bank customers are more open to sourcing products from different suppliers as a result of the current economic environment. This highlights the role that loyalty programs now play in helping banks to not only retain current customers but also attract new ones.

The reality is that not every financial institution is in a position to fund a loyalty programme. So how do you keep the competitive edge? Traditionally, loyalty software in the banking industry has been used to incentivise customers to collect reward points or cash back in line with the total amount they spend on their bank card, and in some cases on other services. The more you spend or use the bank’s services, the more you get. Now let’s imagine instead that the number of points accumulated is not delivered to the customer, but instead feeds an indicator within the bank, allowing the bank to determine the level of engagement or usage of specific products and services. This indicator or Customer Relationship Index (CRI) will help the bank deliver more targeted offers to its customers. Using the CRI analysis to make the offers more relevant for the consumers will help the bank to cross-sell and up-sell relevant products and services.

For example, if a customer achieves a certain level for the indicator related to their card spend and savings account usage, the bank could decide to upgrade them to a platinum card for the price of a silver card. Similarly, if that same customer is identified as spending very little on insurance with the bank, the bank could offer an attractive combined insurance policy for their home and car.

Building a full picture of each customer the bank can now target more effectively. This translates into improved customer relationships and can help create customer advocates for the bank. These customers will potentially talk about their experience and encourage others to become customers too. 

Using CRI and loyalty software in this way means there is no need to fund rewards which in turn reduces costs. At the same time it ensures customers feel taken care of without adding the costs of funding rewards to a constrained budget – something that just makes plain ‘cents’!