GET SMARTER WITH LOYALTY

Switching bank or credit company is now not only easy, but even fast becoming the norm. Indeed, financial services advertising is becoming more aggressive in order to encourage consumers to switch. Meanwhile, the Payments Council, the Office of Fair Trading and the UK Government have all joined together to require banks and credit companies to be practically supportive when their customers elect to move.

Nigel Bramwell

Clearly, customer inertia is not the safety net that it used to be for financial services. Loyalty lasts for as long as it takes for a customer to experience frustration.

What weapons and tactics are therefore available to banks in order to combat depreciating customer loyalty? The two main options have for a long time been added-value customer benefits and stand-out customer service. In such a competitive market, it is these two factors that will either prevent or at least discourage customers from voting with their feet.

Stand-out customer services

Unfortunately, making sure the customer experience is as efficient and simple as possible is unavoidably expensive for banks and credit companies. Improving customer services usually means investing in better staff in more branches and contact centres, and with the latter, there is less and less customer tolerance for offshoring in order to save costs.

The widely-used alternative has been to offer a modern equivalent – self-service via flexible, mobile-accessible websites and highly-functional apps. The intention of these is not simply to appeal to the connected generation, but also to empower customers and keep them out of high street branches and off the phones. For instance, Barclays announced towards the end of last year that 1,700 jobs would be cut from branches, but asserted a continued and resolute investment in digital services in response to the change in consumer habits.

But apps and websites are expensive white elephants without connectivity. It is all very well investing in digital channels, but what if the customer cannot access them? Or, as is all too often the case when consumers travel abroad, what if they won’t access them?

One of the first things that many international travellers will do when leaving the country is turn off their mobile phones, or at least turn off roaming. This is because of the much-publicised danger of racking up enormous data charges with their network operators should they use connected apps, internet browsers or send and receive emails. Many of the worst horror stories that circulate involve headlines of unpredictable charges of several thousand pounds that have come with little or no warning. And so, understandably, connectivity is turned off and the ability to use apps and mobile banking is sacrificed in favour of evading “bill shock”.

This renders the apps and mobile websites defunct, during a situation when customers are perhaps more likely to need information from their bank or credit company. Exchange rates, currency charges and account statements very quickly become highly important during travelling, and so the customer, unable to use the highly-functional app, returns to the call centre.

To be honest, this is possibly a preferable situation to the alternative. Consumers who do incur enormous costs when using data abroad could very easily associate that pain not only with the operators whose rates they have unwittingly become a victim to, but also with the bank whose app or website they used. All-important customer confidence could be sabotaged as an unforeseen result of simply using an app.

Therefore a bank’s ability to limit the need for and the cost of the contact centre is undermined by forces entirely outside their control – connectivity and network operators’ refusal to surrender their data roaming cash cow. So what’s the solution?

Added-value customer benefits

Banks have the opportunity to simultaneously solve the customer service problem and the competitive need to provide compelling additional benefits to their increasingly disloyal customers.

By offering their travelling customers minimal-commitment, low-cost (even subsidised) mobile data connectivity, they can ensure that their customers are fully equipped and sufficiently confident to use their apps and mobile banking websites. Thisallows customers to maintain their use of their preferred self-service channel, keeps enquiries out of contact centres and in a way that distinguishes the bank or credit company from its rivals with a useful added-value benefit.

Account benefits from banks and credit companies are typically all the same, and often still related to financial services – for example, various insurance products, preferential rates on other banking and credit products or cashback options. Instead of looking within their own portfolio of services, banks need to start looking outside the financial sector for the added-value benefits they can offer their customers, and specifically ones that satisfy an actual, current customer need.

Products that entail commitment, even if itsshort-term, intrinsically bring with them increased customer engagement and therefore, loyalty. Even better if that additional product also allows the customer to access the bank’s mobile self-service options and therefore reduce its customer service operating costs.

Attributable to Nigel Bramwell, CEO of Voiamo

Switching bank or credit company is now not only easy, but even fast becoming the norm. Indeed, financial services advertising is becoming more aggressive in order to encourage consumers to switch. Meanwhile, the Payments Council, the Office of Fair Trading and the UK Government have all joined together to require banks and credit companies to be practically supportive when their customers elect to move.

Nigel Bramwell

Clearly, customer inertia is not the safety net that it used to be for financial services. Loyalty lasts for as long as it takes for a customer to experience frustration.

What weapons and tactics are therefore available to banks in order to combat depreciating customer loyalty? The two main options have for a long time been added-value customer benefits and stand-out customer service. In such a competitive market, it is these two factors that will either prevent or at least discourage customers from voting with their feet.

Stand-out customer services

Unfortunately, making sure the customer experience is as efficient and simple as possible is unavoidably expensive for banks and credit companies. Improving customer services usually means investing in better staff in more branches and contact centres, and with the latter, there is less and less customer tolerance for offshoring in order to save costs.

The widely-used alternative has been to offer a modern equivalent – self-service via flexible, mobile-accessible websites and highly-functional apps. The intention of these is not simply to appeal to the connected generation, but also to empower customers and keep them out of high street branches and off the phones. For instance, Barclays announced towards the end of last year that 1,700 jobs would be cut from branches, but asserted a continued and resolute investment in digital services in response to the change in consumer habits.

But apps and websites are expensive white elephants without connectivity. It is all very well investing in digital channels, but what if the customer cannot access them? Or, as is all too often the case when consumers travel abroad, what if they won’t access them?

One of the first things that many international travellers will do when leaving the country is turn off their mobile phones, or at least turn off roaming. This is because of the much-publicised danger of racking up enormous data charges with their network operators should they use connected apps, internet browsers or send and receive emails. Many of the worst horror stories that circulate involve headlines of unpredictable charges of several thousand pounds that have come with little or no warning. And so, understandably, connectivity is turned off and the ability to use apps and mobile banking is sacrificed in favour of evading “bill shock”.

This renders the apps and mobile websites defunct, during a situation when customers are perhaps more likely to need information from their bank or credit company. Exchange rates, currency charges and account statements very quickly become highly important during travelling, and so the customer, unable to use the highly-functional app, returns to the call centre.

To be honest, this is possibly a preferable situation to the alternative. Consumers who do incur enormous costs when using data abroad could very easily associate that pain not only with the operators whose rates they have unwittingly become a victim to, but also with the bank whose app or website they used. All-important customer confidence could be sabotaged as an unforeseen result of simply using an app.

Therefore a bank’s ability to limit the need for and the cost of the contact centre is undermined by forces entirely outside their control – connectivity and network operators’ refusal to surrender their data roaming cash cow. So what’s the solution?

Added-value customer benefits

Banks have the opportunity to simultaneously solve the customer service problem and the competitive need to provide compelling additional benefits to their increasingly disloyal customers.

By offering their travelling customers minimal-commitment, low-cost (even subsidised) mobile data connectivity, they can ensure that their customers are fully equipped and sufficiently confident to use their apps and mobile banking websites. Thisallows customers to maintain their use of their preferred self-service channel, keeps enquiries out of contact centres and in a way that distinguishes the bank or credit company from its rivals with a useful added-value benefit.

Account benefits from banks and credit companies are typically all the same, and often still related to financial services – for example, various insurance products, preferential rates on other banking and credit products or cashback options. Instead of looking within their own portfolio of services, banks need to start looking outside the financial sector for the added-value benefits they can offer their customers, and specifically ones that satisfy an actual, current customer need.

Products that entail commitment, even if itsshort-term, intrinsically bring with them increased customer engagement and therefore, loyalty. Even better if that additional product also allows the customer to access the bank’s mobile self-service options and therefore reduce its customer service operating costs.

Attributable to Nigel Bramwell, CEO of Voiamo