If your account holders choose to use your services, is that good for you?
No, it isn’t a trick question. The answer is an obvious, Yes!
Your customers or members have a lot of options for financial solutions.
From Fintechs to Neo-banks to just outright competition, they can go almost anywhere. Yet they chose to bank with you. Ok, maybe they’re not “going”, but rather, “choosing”. Of course, you’re able to facilitate remote access with full functionality, right?
What are you doing to ensure they stay?
Given that it’s cheaper to engage an existing customer rather than attract a new one (and then engage them, too), let’s look at loyalty.
Namely, easy ways to increase it.
Because much of the work is already done. It’s possible all that’s needed is a coordinated approach. (I’m sure you’ve never run into a “silo challenge” at your financial institution)
Our goal as a provider to credit unions and banks is to help clients drive revenues through a range of services. So engagement and loyalty are topics we do a lot of research on.
Building engagement and loyalty, still among the first questions asked of us in meetings. “How does customer loyalty connect to revenue growth?” Great question.
It’s such a good question, we made an article to share with you. We assembled our 6 top recommendations to increasing member or customer engagement and loyalty towards your financial institution.
Full transparency: Some of the recommendations include services we represent.
That’s why we offer them, because they work!
Our specific programs may not be a fit for your institution, and that’s ok. We’re including them because we want to provide honest information on all your options.
Are you ready? Great.
6 easy ways to generate massive loyalty (and increase your institution’s revenues) through:
1. Checking
2. Auto Buying Service
3. Financial Literacy
4. Fees
5. Use Your Data
6. Social Media
Let’s dive in!
1. Checking (To Excite)
It’s a main feature of your financial institution. While not as “sticky” as it once was (due to new technologies making switching simple), your checking still holds a unique place for account holders.
Chances are, active users of checking consider you their primary financial institution (or PFI). Given the many choices available which are more exciting than basic checking, it’s a perfect place to start.
Your checking program is where loyalty, engagement, and onboarding really begin. So what are you doing to ensure it’s firing on all cylinders? This Cheat Sheet will give you 4 quick, actionable steps to make the most of your checking program.
Get the Cheat Sheet
We suggest modifying your existing checking or creating a new account to go one of two routes:
Rewards Checking
Consider creating a Rewards program with cash-back rewards/high interest rates.
Such an account encourages usage (as minimum swipes per month is the qualifier) and also spending, as points accumulate towards Amazon gift cards, iTunes store credits, or other similar options.
- For cardholders who shy away from credit cards (younger generations), this is their best option for getting rewarded for their spending.
Value-Added Checking
A Value-Added Checking program can increase loyalty, revenues, and excitement.
ID Theft Protection, Cellular Phone Damage Insurance, and a range of other discounts (depending on how you build the offering) encourage people to keep the account.
In essence, you’re creating a service with more perceived value than its cost.
Positioned correctly, both programs save your customers or members money while keeping them happy, and, most importantly, with your institution!
2. Auto Buying Service (To Save)
When you’re looking for a new car, what’s the first thing you do?
If you’re like most, you visit 3rd party car shopping sites. Nearly every one offers financing (it’s not yours). 45% of people research those financing options. 62% if they’re Gen Z.
Be The First Stop
Ensure your financial institution is your future borrower’s first stop.
Make the car search easy for your drivers by providing a car buying service that features prominently on your home page, in your online (and mobile) banking, and connects to your loan application.
Ensure your Car Buying Service is running at full power and increase conversions by up to 200% with our 5 Step Cheat Sheet!
Let's Do It!
Earn the Financing
Car buying is more than the loan.
Yet that’s where you shine.
An auto buying service helps you keep those buyers close, so you can help them get the best rate and also provide necessary ancillary services.
Having this open member communication also helps you grow the direct loan channel. We know you’re looking for ways to increase direct auto loans, even if you have indirect.
Your car buying service is one of the best ways to shift the direct/indirect ratio back into your favor. Which both improves your income and better serves to protect the borrower.
Everyone wins!
3. Financial Literacy (To Help)
Almost ⅔ of Americans fail basic financial literacy. The understanding gap is massive. Whatever you know, the average American (and most likely, your account holders) doesn’t.
It’s a problem we feel strongly about helping.
So how can your institution help and what could that mean in customer/member retention?
You could add one of those financial literacy services to the Resources section of your website. And then watch as no one goes.
Or, you could build your own financial education portal. Only, that takes time, money, resources you don’t have. And even if you did build it, how would you entice account holders to spend the time?
“If you build it, they will come” seems to only apply to baseball fields.
No worries. You’re not alone.
A number of credit unions and associated organizations built slick platforms to start this learning journey. Yes, we had one, but, honestly, the new systems were better and more impactful to members.
Hey, always willing to give credit where it’s due!
What makes any of these education resources different than what you may use now?
They’re all designed with “gamification” and “rewards” from the start. Your account holders learn, earn immediate savings, and not only have you helped address the financial literacy gap, you also delighted a member.
And people like what makes them happy, in this case, their financial institution!
4. Lower or Eliminate Fees
What do Millennials (and, really, account holders of all ages) hate most about banking? Fees and service charges. A 2018 Moeb’s study indicated:
Members pay $12.90 per month on average in service charges on checking accounts at credit unions, compared to $8.95 a month at banks and $3.52 per month at thrifts. The overall average was $9.06, according to Moebs Services. The data included account maintenance fees, minimum balance fees, overdrafts, ATM charges and other regular service fees; it did not include debit card swipe fees.
That’s not one, but two Caramel Macchiatos! (Or Pumpkin Spice Lattes, depending on the time of year.)
C’mon. Lower your fees. Or eliminate them entirely. You wouldn’t be alone.
I get it.
The fees pay for the system. Without them, you would have to…charge fees. It’s just that those fees are borne disproportionately by a small group. And many have poor financial literacy (see how these all connect together?).
Plus, with all the larger banks making moves in this direction, it’s simply bad optics to do nothing. (Plus, it’s the right thing to do.)
What if you charged for value (in the case of the Value-Added Checking mentioned in #1) or used growth from other areas to compensate for the difference? Then let your marketing team share these changes with press.
We also have an Equity & Inclusion Cheat Sheet to help you jumpstart that journey.
The goodwill and positive media relations will generate greater loyalty and foster growth. Especially when your institution initiates one/some/all of the other recommendations listed above.
5. Use Your Data (To Pleasantly Surprise)
When I read my mail (snail mail; the stuff from the Post Office), I sit next to my recycle bin. Most of it goes straight in. It’s junk, and not worth my time.
Do you know the feeling?
We can’t stand junk mail (whether the paper kind or the arguably worse e-mail). It’s just a deluge of “stuff”. Do those companies know if I want or even need said thing?
Probably not.
They’re just blasting it out to everyone they can reach.
Lazy.
Not your institution. Today, your system can quickly uncover and even qualify “most likelies”, many of whom will respond to an offer targeting their interest, situation, or concerns.
Marketing which engages the right person at the right time with the right product isn’t annoying.
It’s welcomed. And you have the data to make it happen organically, without being creepy. I mean, you have a data management system, right?
And helping your members or customers find that fit helps solidify your special relationship.
That’s one more transactional account holder converted into a relationship!
6. Social Media (To Connect)
“Yeah, we’re on Facebook, Instagram, and Twitter. We’re even reaching Gen Z on Snapchat.”
Great! I suppose? How can you consider yourself savvy without TikTok? That’s a joke. Partially.
Most financial institutions are simply going through the social media motions, and really do not have a comprehensive plan.
It’s marketing. Make a plan.
So you decided to commit to social media.
Perfect.
There’s lots of opportunity. First things first, you will need to post regularly.
And not just about “selling stuff”.
While members are especially keen on discounts and special incentives, they also want to read and view stories that will be of interest.
Example Post
Consider sharing the 5 best coffee shops near your newest branch. Or your staff’s 10 favorite lunch spots around town. It’s keeping your name front and center, while also providing information your followers want to see.
No Bragging!
Also, no bragging (or “humble-bragging”). Leave that to your press releases. Let the media sing your praises. Use your social channels to be the humble achiever.
Customer Service
If you have a social media presence, you’re going to use it for customer service. That’s already a given.
The only question left is if you’ll be any good at it.
Of course, since you’re a reader here, you know that there are three important steps to follow for ensuring a smooth experience (I’m paraphrasing from my own blog post about customer service).
Let’s review them for the new arrivals:
- Respond promptly: That means different times for different services. The bottom line is that your customer has a problem (or a question). They could have called, but they felt this would be easier. So make sure it is.
- Be relevant: Canned responses sent quickly to ensure you achieve #1 is ok, but if it’s far off-base from what was asked, it achieves the opposite effect. If their issue will take some time, be honest. If you cannot solve it over social media, tell them that too, and offer options which will work.
- Follow through to resolution: Even if you cannot assign a dedicated person to track an issue, make sure it gets followed. What’s worse than not answering an issue at all? Disappearing halfway through.
With the great power of social media comes some decent responsibilities. Our friends at The Financial Brand share 10 social media tips you can use and leverage at your institution right now.
Social media can shape perceptions of a company. With a careful and focused approach, you’ll ensure it always contributes to building loyalty within your institution.
Want more than a few tips? We devoted an entire section to Marketing. Social media plays a major role.
“Count” On Your Strengths
Your financial institution has more competition than ever before. You also have at your disposal more tools to stave off the competitors, while ensuring continued growth. The key takeaway from this article:
Do. Something. Now.
Your competitors are not standing still. They’re using the strategies above to create a more appealing solution for your customers and members.
What can you do?
If you have the expertise and resources, your institution can develop its own Rewards program. It’s a start, and you can read about what Dupaco CU did when they wanted a deeper connection with members.
How many of the 6 easy ways can you find in their effort?
This may not be the right approach for your institution. In that case, partnering with companies offering the specific services you seek might make the most sense.
Working together enables each party to do what they’re best at: For you, providing quality financial services, for the partner company, well, whatever it is they do!
A previous article introduced our “five best” checking providers for the banking industry. That’s one place to start if you’re considering a partnership.
Our company also offers several of the above programs & services. We would be happy to start a conversation with a 15 minute introductory chat. From there, you can decide if there might be a fit and what the next steps would be in your world.
Still a bit early for a meeting? Yet thirsty for more learning? We goIt you.
Subscribe to our Learning Library. We’ll keep you in the loop on how to best serve your clientele across a wide range of services.
Blogger. Speaker. Futurist. Part-time Jedi.
Dedicated to helping your credit union, large or small, deliver mission-focused financial empowerment to your members. And make a positive impact on your community while you’re at it.