Engagement

Banks Take a Fresh Approach to Customer Loyalty

By Deanna Ting
January 15, 2013

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Not long after the Great Recession of 2008, it was clear that consumers' attitudes toward banks and financial institutions were far from favorable. The American public's confidence in U.S. banks reached an all-time low last year, at just 21 percent, according to a June 2012 Gallup poll.

Needless to say, combatting these negative attitudes is not easy. However, a few banks have succeeded in creating and implementing innovative consumer loyalty programs that have benefited not only their customers but their employees as well. Here's a closer look at three such banks that have done just that.

Giving Credit
From Oct. 1 to Nov. 15, 2012, more than 9,000 Wells Fargo & Company bank locations nationwide participated in a program to offer free credit scores to consumer customers. While anyone can obtain a single credit report from each of the three major credit bureaus - Equifax, Experian, and TransUnion - once every 12 months, the bureaus usually do not offer credit scores, which portray a much more accurate representation of an individual's credit.

The idea for this credit score program, says Gary Korotzer, senior vice president of marketing for Wells Fargo Consumer Credit Solutions, was motivated by the San Francisco-based bank's desire to see its customers succeed financially. "We kept thinking about how so many consumers have been hit so hard by the recession, and how we're always asking ourselves how we can help our customers," says Korotzer. "So, we thought we could help people realize the importance of their credit, and to know where they stood even during our current economic rough patches."

By visiting a Wells Fargo bank location, customers could obtain a unique access code that enabled them to receive a free credit score online. Employees were also eligible to receive free credit scores, and at all participating branches, they were extensively trained to educate and assist customers seeking credit management assistance.

To pull it all off, Wells Fargo teamed up with Experian. "We approached Experian with our idea and it was something they hadn't typically done before, but they were really open to helping consumers learn more about their credit," explains Korotzer. "Together with Experian, we were able to build a fully branded Wells Fargo experience and made it easy for customers to get their credit scores and reports."

Wells Fargo also launched a campaign involving advertisements in print, radio, and social media, as well as reaching out to specific customer bases in Spanish- and Mandarin-speaking markets. By the end of the program, says Korotzer, more than 350,000 customers and employees received free credit scores.

For Korotzer, the experience was a lesson in engagement. "There's clearly interest among consumers for something like this that helps them understand where they stand, without tricks or gimmicks," he says. "Customer feedback is just off the charts. It shows you that you don't need to beat people over the head with marketing. You can do things in a substantial way and it'll show you how they feel about the company and their desire to engage with us."

Forging Bonds
Scott Robinson, senior director of consumer loyalty for Maritz Loyalty Marketing in Ontario, Canada, agrees. Robinson says that many financial institutions resort to monetary incentives for their consumer loyalty programs. "The challenge of that is that they are very susceptible to their customers going elsewhere if there's a bigger, better monetary offer," he says "Things that successfully drive motivation transcend just the monetary."

He cites a successful consumer banking campaign: Scotiabank's five-year-old SCENE entertainment rewards program. Scotiabank customers who join the program can earn entertainment rewards with their debit or credit cards at 132 Cineplex theaters throughout Canada. By creating a "SCENEtourage," a group of friends who see movies together and buy tickets with Scotiabank cards can earn even more points and rewards. "This goes back to our instinctual drive to bond," explains Robinson. "Movies are a social activity, and Scotiabank customers who are in a SCENEtourage derive even more benefits and an added social benefit."

Loyalty From the Inside Out
Consumer loyalty can also derive from an employee incentive program, as it did for Columbus, OH-based Huntington National Bank. Wanting to create a sales incentive program that would generate $500,000 in treasury revenues and reach a goal of $57 billion in its optimizing customer relationships (OCR) program, Huntington worked with New Brunswick, NJ-based Dittman Incentive Marketing to develop the Journey to the World Series program, which ran from May to October 2011. Salespeople, split into regional teams, were encouraged to hit "home runs" by opening commercial accounts and selling certain credit products. The team with the most runs won the "World Series championship" and a $2,000 gift card.

The baseball-themed program more than doubled the bank's original goal of 20 home runs with a total of 42, and generated $1.2 million in revenue, beating its goal by 110 percent for a 12-to-1 return on investment.

Crucial to exceeding the original goals was addressing OCR, says Susan Adams, special initiatives director for Dittman. "A significant requirement for the program was the completion of comprehensive OCR Relationship plans," Adams says. By setting organizational goals and making customer service a top priority, Huntington has seen increased loyalty among its customers. In the third quarter of 2012, 76 percent of households with a Huntington consumer account used four or more of the bank's products or services, up from 73 percent in 2011.

All in all, the program proved to be a win-win for banking patrons and employees alike. "Customers were rewarded with a good experience and with services that fit their needs," says Adams. "Colleagues were rewarded for identifying those needs and developing a plan to better serve customers. The bank was rewarded with customer loyalty, employee engagement with organizational goals, and the revenue associated with broadening the services provided to customers." This page is protected by Copyright laws. Do Not Copy

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