How do you acquire new clients? Give them free tickets to the cinema or farm their data?

Retail Financial Services

John Hall

Bank and Brand Distribution of Retail Financial ServicesRetail Financial Services

Really understand what your customers want and segment them to be more personalised

 

HEADLINES

 

  1. Research what your customers want and value: A participant said it was important for firms to really research what their customers want when it comes to acquisition. Investing in gifts / freebies is an expensive business and if customers don’t value them, then it is a waste of money. Think whether it is better to focus on using data in making the product / service better rather than things that might be perceived as “gimmicks”.
  2. You can give free tickets and use data: A participant discussed how on their digital site – which is free – there is a reliance on ad revenue and smart partnerships to generate revenue, whereas they use more traditional rewards (e.g. Nectar points) to acquire and keep paper readers. Again, it is about knowing your audience.
  3. Segment your customers: Two representatives agreed those influenced by rate alone will always switch, so rewards can be used to attract customers, but it may not retain them (which is as important).
  4. Clear ROI needed: Many of the contributors agreed that any investment in either proper data analytics or gifts needed a clear ROI, which is often hard to do with free gifts. A comment was made that some of the economics relies on a percentage of customers never redeeming (i.e. the insurance principle).

 

KEY CHALLENGES

  • Establishing a clear ROI when using gifts / incentives for customer e.g. through customer lifetime value.

 

  • Establishing what your customers really want; this requires careful research and segmentation.

 

  • Where you use partners to deliver a service / benefits, the importance of assessing the economics of that relationship and whether the partner offers credible benefits the customer wants and values.

 

CONCLUSIONS/SOLUTIONS

  • Really understand what your customers want and segment them to be more personalised.

 

  • Establish a clear ROI to convince your Finance function.

 

  • It’s not an “or” decision – you can farm data and give cinema tickets, but you need to think carefully about how you do this and to which of your customers.

 

 

                 

 


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