How important is loyalty in financial services today?
Loyalty has never been more important in financial services. Not only are consumers turning towards reward programmes to make their money go further in the current cost of living crisis, but increasingly consumers also expect to be rewarded for their loyalty, and if their FS provider does not recognise this, they’ll vote with their feet.
Virgin has long known the value of loyalty – from launching the Virgin Atlantic credit card in 2018 to bringing Virgin Red to consumers in the UK (2020) and the US (2021) – it’s always looked to recognise and value its customers. Launched in 2020, Virgin Points is the universal currency which brings the different Virgin Companies together – giving customers the ability to earn and spend the points on hundreds of rewards from across the Virgin family.
Importantly, loyalty in the banking sector also helps with customer retention, and banks can use this loyalty to increase customer product holdings, engagement and ROI. Research shows that customers with just one product at their bank will stay for about 18 months. By adding a second product, the bank extends that relationship to four years, while withthree products, the relationship will last an average of 6.8 years.*
*Source: Bank Intelligence Solutions (BIS) from Fiserv
How are rewards / loyalty being financed?
We could talk about the nitty gritty such as interchange fees (or lack of!), merchant funded offers or return on investment, but I think it’s much more important to focus on the bigger picture here. Loyal, happy customers will give more back – it’s a two-way relationship – gone are the days when banks would hook a customer in with a great rate that would last 12 months and once the offer ended, the customer would go elsewhere – banks are starting to appreciate the value of retention – and this is achieved through reward and loyalty programmes. It’s the boom loop... not the doom loop.
More broadly, it is the standard acquisition, increased engagement and retention financial benefits that a company receives, which finances loyalty programmes – if a customer can earn points for credit card spend, it’s incentivised to use that card more which is a win-win for the customer and the card provider.
What do you do in your spare time (hobbies etc.)?
I am all about experiences, so recently, I went to see Beyonce, which was phenomenal, followed a few days later with a trip to Lords cricket ground to watch England play Ireland. All way varied but great opportunities to mix with friends and colleagues.
What is your favourite book that you would recommend?
I’m going to be cheesy and say Richard Branson’s Finding My Virginity book – I actually bought it with my Virgin Points. The book is a sequel to Branson’s initial autobiography and is filled with stories about his adventures, mistakes, successes and failures. Truly an inspiring read.