Credit card rewards programs have proven to be an effective tool for financial institutions to garner customer retention and encourage loyalty. That said, rewards programs are often overlooked as a powerful means of attracting new business.
Customer acquisition is an expensive and laborious process for any business. Leveraging an existing business tool to attract new customers can be an effective method for financial institutions to win new business and increase revenue.
Read on to see what new customers look for in a rewards program and how you can capitalize on this to drive new business.
Tech Capabilities
Today’s consumers have a mobile-first mentality. Advanced digital capabilities offering intuitive banking experience are expected. This is especially true for the younger tech-savvy generation making critical decisions about their financial future.
In fact, 80% of Gen-Z customers are actively exploring mobile finance options. The ability to ‘wow’ this generation with anything less than cutting-edge technology is unlikely.
Loyalty programs are a great way to market and showcase your financial institutions’ digital capabilities. Whether it is demonstrating in-app loyalty features or dynamic rewards redemption landing pages, these tech features could be the extra incentive needed to attract new customers.
Sign-Up Bonuses
Consider giving prospects a taste of your rewards programs and their potential benefits with a sign-up bonus. Offering a promotion upon enrollment is an easy win for banks and a quick way to get customers through the door.
Offering low-interest rates or cash back has historically been an effective tactic for financial institutions. However, bringing in new customers via a comprehensive rewards program can be as simple as giving free redeemable points or discounted rates on redeemable items.
This demonstrates the perks of your financial institution’s rewards program and can establish an immediate sense of loyalty for new customers.
Staying Relevant
Customers are looking for financial institutions that evolve with them. This is especially true as the competitive landscape for banks, coupled with a changing customer mindset, has changed post-pandemic.
When choosing where to house their financial future, customers care about security and longevity. Focusing on having a forward-thinking rewards program may be influential in attracting new customers.
Ensure that your loyalty program addresses current customer pain points, makes specific recommendations, and is personalized. Then, amplify and emphasize those features to potential customers. This reinforces confidence in your financial institution and its loyalty program.
Rewards Opportunities
For consumers, rewards programs are only as good as the actual benefits offered. Use this mindset as a tool to identify potential attention-getters from a potential customer perspective.
Research what rewards are most attractive for new customers, relevant to the financial client, and timely based on the season. Keep rewards updated and use this as a means of advertising.
This can be especially helpful for tangible reward offerings. For example, if you’re looking to attract new customers around the holiday season, let them know how your rewards program can help alleviate some of their holiday shopping stress. Or appeal to them by informing them that your rewards program may allow them to finally buy that plane ticket for the big trip they have been wanting to book.
Rewards opportunities could be a major way to appeal to consumers’ desire for immediate gratification, no matter what their financial situation looks like at a given time. Capitalize on the features of your program that are most compelling for customers, beyond loyalty.
Word-of-Mouth
Even in the digital age, word-of-mouth marketing is still a powerful tool for businesses. Current loyal customers can funnel new customers to your financial institution through means of referrals.
Satisfied customers are likely to tell their friends and family about the program’s special offerings. They may show off the HDTV they acquired through your program or talk about the money they were able to earn back on this month’s credit card bill.
Studies have found that in commercial banking, 68% of new business acquisition comes from referrals. Further, referred clients have a 16% higher lifetime value to their financial institution and are 18% more likely to stay with that provider.
Consumers trust the people in their life more than even the best marketing team. Use this to your advantage by creating a loyalty program worth bragging about.
Ready to create and market a comprehensive credit card rewards program for business development? RAZR Financials’ tech-enabled platform and team of experts can partner with your financial institution.