My colleague reported on a Millennial Research Survey released by Member Intelligence Group a few weeks ago on this blog. The survey report, released in August 2016, outline key findings among the Millennials surveyed about their financial preferences in the state of Michigan.
The report cited an extensive study conducted by the Customer Contact Council several years ago, focused on finding ways to build customer loyalty. The Millennial Research Survey cited this:
In short, the study revealed two important insights:
- Frist, exceeding customer expectations does little to increase loyalty, reducing effort increases loyalty.
- Deliberaly acting on this can reduce expenses, improve service and reduce customer churn.
The theory around this being: the more barriers we remove, and the easier we make it to do business with our bank or credit union, the more loyal our customers become.
Dovetailing on this, the Millennial Research Survey found that a majority (62%) of respondents reported that it was “Very Easy” to do business with their FI and 78% reported that FI as their Primary Financial Institution (PFI).
So, why do we keep chasing after Millennials as if they don’t do business with us? Survey says they do!
The issue with removing barriers to do business is that…it makes it easier to do business. With you. With your competitors. With everyone.
Do you want to try out the latest investment app? It’s easy! Want to see how slick Quicken’s Rocket Mortgage is? That’s easy too!
I don’t disagree with the report on the basis that Millennials have a PFI, and they rate that PFI as “Very Easy” to do business with. It makes sense, and it makes sense that everyone would pick out at least one bank or credit union to identify as their primary. BUT, does being easy to do business with (and/or being identified as a PFI for a customer) automatically correlate to increased loyalty? Hard to tell.
The definition of financial loyalty is changing and becoming a moving target.
- Your customers may be loyal to you for a particular product or service. You may be the bank of choice when it comes to trusting you with their checking account, a Debit Card that works all of the time, and their cash savings account. However, your customer may not see you as their primary lender or investment advisor. In this marketplace, I think this is okay. Do we want to be everything to every customer? Sure! But if we’re not, that’s okay too.
- Your customers may be loyal to you as long as access is easy. Access comes in many different forms. Branches, ATMs, getting a live person on the phone, a stunningly easy-to-use mobile app. Banks and credit unions all play to their strengths when it comes to creating and promoting access. Most of it depends on who your customers are and what they value the most. Measure loyalty from that customer segment first.
All of this boils down to the importance of persistence in marketing to the Millennial segment (or sub-segments thereof). Find the areas that we believe our bank or credit union can meet their needs better and drive messaging around that more effectively than our competition.
Increased loyalty from the Millennial segment will come as marketing is continually more relevant and automated, meeting their financial needs when they are needed. It will also come as the bank or credit union accepts that loyalty can be measured in varying degrees of success.
What are you doing to drive loyalty at your bank or credit union? Leave us a comment!