Banks are facing increasing pressure to grow their business in the era of digital disruption and open innovation. Profound changes in consumer behaviour, technological innovations, the availability of a massive amount of data and the connected lifestyle of customers have led to a blurring of industry boundaries.
Today’s consumers are choosing to spend their time and money on enjoyable experiences that enrich their lives. While everything a brand does – the way it does its marketing, research, customer services and more – all play a role in shaping the customer’s experience, it is worth noting that customers’ expectations are shaped by their interactions within different industries. In the financial service industry consumers expect more from their bank given that their customer relationship would typically go back many years, if not decades.
According to recent global research from Priority Pass, customers value experiences over material goods, especially those experiences that can be shared. In the survey, the top five favourite activities of respondents across Asia Pacific were travel focused. Cultural holidays overseas received the biggest injection of cash, with respondents spending an average of US$1,437 a year on them – more than 50% the amount spent on luxury items (US$942). What’s more, if given a US$300 cash gift, a quarter of respondents (23%) in APAC would spend it on a trip away, with only 5% opting to make a purchase.
Customers look for more meaning from their expenditure, time and hobbies. When financial brands deliver great or valuable experiences, they take steps towards a more powerful and engaging type of loyalty. So what does this mean for banks looking to capture consumers’ hearts and wallets in this new age of experience?
Rethinking loyalty options
Banks and traditional card providers have been forced to shake up their strategies in terms of technologies to match the services they deliver and the ways they boost brand loyalty. Banks need to identify opportunities to enhance customer experience across not only their staple financial products but also anything that touches the personal lives of the consumers. As travel has become a key indicator of the quality of life for connected consumers, banks need to engage with customers at the centre of a lifestyle ecosystem, providing them with relevant, compelling and smarter travel benefits to truly differentiate their brand. This will become an integral reason for customers to remain loyal.
Reinventing cross-industry collaboration
In the era of the experience economy, regardless of whether it is directly attributable to the brand or not, an experience can enhance or taint a customer’s overall perception. Also, customers expect each experience to be at least the same as or better than the last. With the study revealing that customers love to share their experiences during travel, this should encourage bank marketers to look beyond their core offerings and establish cross-industry partnerships for delivering seamless travel experiences for their customers. Banks should put themselves in their customers’ shoes and consider the option, for example, of offering their customers access to an airport lounge in the event of a flight delay. This would be a great opportunity to create a moment of truth for emotional loyalty for their brand.
Experience is king, and it won’t be dethroned anytime soon.