James Berry, Managing Director, Commercial, Valuedynamx outlines the ways customer engagement programs can help banks stand apart as consumers keep an eye on their spending.
With an economic crunch continuing to create spending challenges, many businesses are looking for ways to stay resilient and to keep customers engaged. Reward programs are a proven business investment which can help companies thrive, even when times get tough. In fact, amidst a cost-of-living crisis, customer engagement programs can be just what business leaders are looking for, to help them to keep going during what is likely to be a difficult time.
We’ve seen a few companies – inside and outside the travel industry – launch new customer engagement programs recently. Take Asda and John Lewis, for example. And there’s good reason: it’s proven that loyal customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers. Looking at the financial services industry, now is especially a great time for these organizations to invest in customer engagement programs.
Here are three reasons why:
1. They help you stand out from the competition
As we enter a climate where disposable incomes continue to be pinched, competition for a smaller share of wallet will become fierce. People will be using their cards less. So how can banks encourage more frequent engagement with and from their customers? They might be buying fewer items, but how to guarantee your card is kept top of their wallet, and used to pay when they do go ahead to make a purchase?
Customer engagement programs do just that. They don’t just help banks sign up new customers, but they keep encouraging them to choose their card when they spend by offering them rewards, cashback, and other offers when they make a purchase – and, if powered by a provider who can offer them rewards from a vast network of retailers and travel companies, then it’s likely you’ll be able to offer them a deal for something they’d have been purchasing anyway. Not only does it make a customer choose one card over another, but they’re left appreciative of the service they’ve received from the company – and for their help in getting perhaps rewards, or some cashback at a time when money is likely to be tighter.
2. They can encourage people to make a purchase they otherwise wouldn’t have
Of course, an added benefit for banks is just that: with money tighter, giving a customer an offer at the right time could be the make or break as to whether they go ahead and purchase something – especially if they were sitting on the fence, or were reconsidering as costs seemed too high. The vast majority (85%) of consumers say that they increase the amount they spend with a brand if it means they can maximize the benefits of their loyalty program – and that’s likely to be even truer when they need to make the more sensible decisions over the coming months.
Through engagement programs, customers can earn loyalty points, miles and cashback every time they spend with merchant partners. A well-timed message with an offer or reward, especially those that are personalized for the shops and services consumers are most likely to be interested in, could be the ‘make or break’ of them making a purchase, especially if there is a bonus reward on the side when people are feeling the pinch.
3. They make you that familiar brand they’ll listen to when others are vying for their attention
Another benefit of a customer engagement program is just that – it keeps customers engaged with your company. As well as giving them offers, they give banks a way to stay in contact with customers even during the periods they’re not spending. Those interactions go a long way to keeping your relationship positive, and your card front of mind when they do.
Over the next year or so, as banks are vying for a smaller share of consumer wallet, it’s that kind of differentiator which will help one financial institution stand out from another. A customer engagement program can show you understand and want to help your customers which, in turn, has been proven to result in customers being more likely to give their attention and custom time and again.
Different kinds of programs to keep customers engaged
As we move into what’s going to be a difficult economical period, financial institutions will be looking for ways to differentiate themselves and have their propositions or cards chosen by customers to do their banking and spending.
Valuedynamx have the expertise to get financial institutions set up with customer engagement programs. Valuedynamx specializes in bringing together payments, card linked offers, affiliate marketing, earning and redemption expertise. They pool buying power and provide a global center of excellence to deliver more relevant, diverse and engaging solutions.
It’s this expertise that enabled travel loyalty programs to thrive at a time when no-one was travelling by motivating and driving everyday spend tied to customers’ cards. And that expertise can help financial institutions keep people spending with their cards right now too.
