In today’s day and age, when customers have a lot of choices, ensuring their stickiness can prove to be a challenge for banks. However, it is essential for the banks to retain customers as the cost of acquiring a new customer is many times that of retaining an existing one.
When customer loyalties are fickle, how do banks ensure customer stickiness? Some of the steps that banks can take to ensure customer stickiness are:
Create robust digital transaction platforms
Traditional banking placed a lot of emphasis on personal touch. The bank branches were a place for personal exchanges and social interactions as much for conducting financial transactions. Branch managers and key bank employees used to be closely acquainted with the customers leading to a feeling of mutual trust, which motivated customer loyalty.
Modern banking is technology-centric, which has led to a reduction face to face interactions, rendering the customers neutral to the bank’s physical services. The customer veers towards digital platforms that provide him with more ease and convenience for conducting banking transactions. In such a scenario, it is imperative that the customers are provided with customised tools on remote banking platforms. The more they get used to a digital platform, the easier it becomes to retain them.
Maintain transparency and clarity
When the customer gets what he sees or hears, it establishes trust. Transparent and reliable delivery of services ensures customer delight. Conversely, if delivery of services gets mired in fine print, it leads to customer dissonance. Ensure that the customer understands the terms and conditions as well as the depth of his involvement when signing on the dotted line. While initially, customers may consider your efforts at making them aware of the fine print as a needless intrusion, sending little bits of information at regular intervals will lead them to ultimately appreciate your efforts in the long run.
Ensure customer engagement
An open channel of communication with the customer goes a long way in developing customer loyalty. Regular newsletters and well-crafted mailers, etc., enable the bank to deliver important pieces of information to the customer. For instance, customers would want to know the latest techniques of scammers and hackers and ways to prevent themselves from falling prey to it. When they receive such information regularly, they would value the effort. Besides, it will prevent the bank from going out of sight and consequently, out of mind.
Become a financial well-wisher
In today’s connected age, the overload of information often distracts us. A customer hence looks for a consultant and expert who can separate the wheat from the chaff for him. Accordingly, banks can cement their relationship with customers by offering them advice and suggestions on financial matters. It will differentiate their services from those that are merely peddling it and bring them closer to customers
Offer customised promotions
A customer that feels special is a happy one. Customised promotions are a great way to make customers feel special. Develop tools that identify customer usage patterns to create customised promotional offers. Tailored offers on digital platforms can become key components of the customer retention strategy. For instance, give free shopping vouchers to customers who regularly use digital banking channels to make payments on e-commerce portals. Banks can also offer points-based loyalty programmes for high-transacting customers, all within regulatory guidelines.
High net worth individuals (HNIs) contribute handsomely to any bank’s business, making them a much-sought-after customer group. Providing them with category-centric benefits will give them a feel of exclusivity and help reduce attrition.
Analyse customer behaviour
Investing in data analytics is essential to understanding customer banking behaviour, which will lead to vital and actionable insights. Acting on these insights will allow banks to configure their services to the customers’ needs. It will ensure that the customer considers the bank as a vital go-to interface for dealing with financial issues.
The digital age has shifted the focus away from the branches to online platforms. Despite banks moving away from the physical world to the digital realm, the principles of customer service remain the same – transparent, timely and reliable delivery. Banks can retain customers if they concentrate on providing an easy and hassle-free banking experience that rides on technology.
The author, Sanchay Kumar Sinha, is Country Head- Liabilities and Branch Banking, South Indian Bank. The views expressed are personal
