How do you create a sense of loyalty? Cash incentive? How about excellent customer service?

Retail Financial Services

Retail Financial Services

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Moderator: James Alexander, KPMG
Expert: Ross Cox, Bizfitech

What are the challenges to creating loyalty for brands?

  • Aggregator sites
  • Price comparison sites
  • Open banking

Many brands seek to differentiate with “value add services” on the side, but there are challenges with this:

  • Can you actually engage the customer around these?
  • Does the value add service really add value to the customer, and does it relate to the core service? Or is it just a random cross sell for someone (e.g. MS Office with a Vodafone contract)
  • Is the value added worth the cost/effort needed to secure it? Does the customer trust you that this isn’t just hiding a higher cost?
  • Will the customer associate the value they get from the value add when they come to think about switching?
  • Here is a danger that these offers are not affordable at scale (e.g. Waitrose free coffee, Monzo free overseas cash withdrawals)

True loyalty is about being trusted: as an advisor, to deliver on the customer promise and experience, and to make it easy for the customer. It is about creating “moments that delight”, e.g. in retail same day online delivery that works.

How do we create “delight” in FS?

It is important to engage with customers, get real feedback and be easy to contact.

  • Why doesn’t every app and website have a “chat” link to give feedback?
  • Open customer feedback forums are “like free consultancy” if you actually use them and read them.
  • Every firm should seek more customer engagement and feedback, and not be afraid of complaints – dealing with problems really well is a key driver of loyalty!

Financial services has a generation challenge, but not the one that most people think about

  • The assumption is the older people have all the wealth and are helping their kids, but one participant’s research showed the real strain was on children looking after older parents, paying for care etc. This is too big a problem for any one organisation to tackle, and will need collaboration and partnership. Digital enablement will help, but F2F is also vital here.
  • Making decisions around care, and more generally in financial services, come with far greater risks if it goes wrong than in e.g. retail. This is really scary for people, and then the FS industry makes it really hard with lots of complex jargon and endless incomprehensible forms and T&Cs.
  • Customers are desperate for someone they can trust, someone who can help them, someone to make it easy.

Does AI help with any of this?

  • Maybe, but big risks if set up wrong and doesn’t work for complex customer journeys
  • How do you know if you can trust the programmer? Lots and lots of testing of all possible journeys is the only way
  • Beware the unintended consequences of using AI

Which brands are we loyal too?

  • Four Seasons hotels: just brilliant, perfect service and experience at every touch point
  • Cornerstone razors: had a problem with a missed delivery, moved me to an upgraded/premium package and new razor arrived next day; fixed my problem, and now unlikely to leave
  • Amazon Prime: reliable delivery every time; know that Amazon are customer centric throughout the organisation, which counts for far more than concerns around warehouse labour practise or tax avoidance


  • Loyalty is all about delivering consistent positive customer experience; “value add” services are gimmicks and don’t work.
  • Beware of over-focussing on one narrow segment, and inadvertently disenfranchise the rest
  • Digital is a great enabler, but don’t rely on it to solve everything: face to face and human interaction is still really important.