Improving customer lifetime value: The age of the consumer
In the past, large corporations were able to dominate the marketplace due to a large advertising budget and mass communications. Today, traditional competitive barriers are shifting as technology has created a marketplace that is saturated with consumer opinions and social sharing. By leveraging technology, small businesses now have the ability and means to invade big business’ market share.
Forrester Research describes today’s marketplace as “the age of the consumer”, or the “obsession with serving and delighting customers”. The age of the consumer puts pressure on marketers to nurture real loyalty from their consumers, loyalty that is not only unique to the brand but also to all of its products and services. This type of loyalty is instilled through customer advocacy and trust. In today’s marketplace, community credit unions’ concentration on customer service will become a first-rate competitive advantage.
Customer advocacy is the perception from members that their best interests are considered before the credit union’s bottom line. For members to increase their willingness to invest, borrow, and buy more products and services from your credit union, customer advocacy needs to prevail as a leading trait. Members that rate their credit unions high on customer advocacy are more likely to consider purchasing additional products and services. In fact, many credit unions are practicing customer advocacy by providing free financial advice, money management classes, and simplified literature that concisely explains account policies and fee information. Building customer advocacy can be as easy as making the member experience easy and enjoyable.
The Loyalty Report™ 2014 from Bond Brand Loyalty reports that 49% of members who strongly believe a program is trustworthy are willing to share personal information and in turn make repeat purchases with their credit union. Trust is the foundation of loyalty, and credit unions need to ensure that they do not violate this trust when trying to upsell or cross-sell products and services. The American Marketing Association (AMA) released a report in January 2014 highlighting the sequential order to cross-selling financial products. AMA notes that there is a “natural-order” to a consumers purchasing behavior. A member is most likely to open a checking account before establishing a brokerage account, and as members’ demands evolve, it is important to align their demands to their financial maturity. Natural ordering helps credit unions understand when to best introduce and sell a new financial product. As trust is established with convenience products, such as a checking account, a savings account, and a debit card, other, more risky income products, such as credit cards, CD’s and money market accounts, can be created.
Loyalty cannot be bought with large billboards and flashy catch phrases. While technology advances have leveled the playing field for community credit unions to compete among the larger financial institutions, member loyalty to your credit union needs to be built with customer advocacy and trust.
The age of the consumer is the age for community credit unions to highlight their strengths in customer service to build and sustain a loyal membership base.
Buzz Points offers a unique debit cards rewards program for members. This free feature of members’ accounts works with community credit unions and local businesses to engage mutual customers. Credit union members earn points by using their debit cards wherever they shop, but they earn more points for shopping locally. The Buzz Points rewards program enables credit unions to generate greater non-interest income, increase transactions, reduce account attrition and attract new customers.
