Profitable bonus program banks and their clients

Only 13% of the interviewed top-managers of banks, according to surveys by Forrester Consulting, satisfied with their loyalty programs. Those who are not satisfied twice. According to estimates Frank Research Group, at least one loyalty program offered by 78% of banks in Russia from the top 50. The majority of cashback programs, the refund is less than 1% in bonus cards are charged a 1.5–2.5% of the amount.

Выгодны ли бонусные программы банкам и их клиентам

Is there any benefit

The payback of loyalty programs, taking into account all operating expenses is more than 1.5 years. As you can see, their performance raises questions, both from banks and customers, financial literacy, which is gradually increasing. One of my colleagues decided to calculate what he brings to the program “air miles”. It turned out that practically nothing. While the mechanics of the calculation are complex and confusing and more efficient to simply look for cheaper tickets at the aggregators.

In the USA people participate in an average of 13-14 loyalty programs, however, the involvement of customers in such programs does not exceed 50%. This means that in half of the cases the customers have not made any purchases under the special program. The reasons are the same: bonuses are hard to count, but the benefit is not obvious, the customers forget about the map, barcode, and other attributes that you must specify when making a purchase. Another factor: planning horizon: in the current volatile economy, consumers tend to make decisions that benefit here and now.

Nevertheless, banks are actively seeking ways to customer loyalty. Special programs have gone from a rather primitive discounts to loyalty points of a loyalty currency from flight miles to kesbeke.

The first program with kasbeam come from retail in the mid-1980s, the American chain of Sears decided to be engaged in financial business and produced a credit card with repayment in the end of the year, from 1% to 5% with every purchase. The first miles program came from American Airlines. It subsequently became the coalition, covering, and other airlines, e.g. British Airways. Later they were joined by hotel chains, banks, IT companies.

It is believed that the loyalty system built on the bonuses and points, works more effectively than discounts. The consumer experiences only substantial discount or minus 1% to the original price, he is unlikely to appreciate, but in the bonus system, the real discount can be even less than 1%, but if the buyer involved in the program for him and that will be enough.

Loyal Russians

In Russia, statistics on the total number of loyalty cards no, but imagine the size of market data for individual brands, for example, the retailer X5 Retail Group, more than 41 million cards, at “Aeroflot” — more than 18 million According to “ROMIR”, loyalty cards have 84% of Russians. According to estimates WantaGroup, 76% of consumers in Russia at least sometimes show the cards of regular customers in the stores.

At the forefront of all the changes to loyalty programs in Russia, of course, the banks, because, on the one hand, all products generally resemble each other and they need marketing support, on the other, it is the banks — holders of big data about customers. Analysts of the consulting Agency Markswebb in the study Bank Motivation Programs 2018 counted 10 types of banking loyalty programs — earn miles and bonuses, discounts and maps partners to kesbeke, free services and higher interest on the balance in the account.

According to Markswebb, the most common on the Russian market are loyalty programs with kasbekar, a free service for compliance with the conditions (for example, the volume of card transactions) and accrued interest on the balance.

Evolution bonuses

Until recently, the most technologically advanced solution for banks and a coalition approach. In the US, this program was launched back in 2011, American Express program was named Plenti. Customers can redeem points within a loyalty program using a single account Plenti — for example, to receive points for a purchase in the store on the map, and then convert them into money to pay your mobile.

The Bank of America this program is called Preffered Rewards. By its terms, customers can gain points for virtually any operations and products, whether Deposit, investment or loan tools. The same approach is used in the global programme Thank You from Citibank.

Banks easiest way to create coalition loyalty programs due to the enough tech platforms and Big Data. Such programs are easier to scale, having an extensive network of branches and remote channels. It is convenient for users, and banks may receive commissions from the partners and additional income from different products. In Russia, a similar loyalty programs from Sberbank, Tinkoff Bank, Alfa Bank and others.

The coalition continues to work well, but in the near future, banks will have to work on it. According to the “Index of propensity to change for the millennial generation” (2014), compiled by the company Viacom for a new generation of customers, accustomed to smartphones and mobile Internet, physical branches of banks will not be needed. For them, the most important customized offers with an individual approach, with various “chips”, for example elements of gamification.

Gamefile already have banks and companies from other industries, but this approach is not yet well developed. Example — the “Thank you” from Sberbank, in which the client goes through four levels, which are a system of accumulation of points and a set of options for exchange. Each level is a set of tasks, conditions that need to be done. On a similar scheme has a loyalty program Plazius is connected to various restaurants and coffee shops, taxi service Gettaxi and others. Alphabet Corporation also plans to launch Google Play Points with five levels: bronze, silver, gold, platinum and diamond. In the program you can accumulate points and exchange them for various services.

Under the umbrella

Here we come to the next trend in loyalty — an umbrella program. Now work on this principle Amazon, recently a similar program started “Yandex” plans and Google. The principle of “umbrella” — buy one service and get access to other on more favorable terms. The consumer saves on complex purchases, and the company gets a loyal customer and all the data on it.

The banks have not yet pronounced “umbrellas”, but the principle has long been in service: for example, Deposit rate for a loyal customer is higher, the loan rate was lower, and overall requirements for the consideration of the application is simplified. We can assume that with greater proliferation of Analytics we will see a creative umbrella program and banking brand.

Banks are aggregators of customer information, which is becoming more. According to the forecast of PWC, by 2020 the volume of big data will increase 20 times. Banks, of course, will take them to work. And many clients do not mind sharing the information if this entails discount. As noted in The Loyalty Report 2018, 87% of respondents are ready to provide their personal data in the future to have more serious preferences.

The output will be a win-win: the client is transparent, leaving at every step of your digital fingerprint, and Bank, which knows all about the customer and can offer individual terms and discounts. This is the prospect of the near future: to customers and banks need time to prepare for greater transparency. In General, the loyalty program is good for keeping clients on time. Further to maintain his attention to the brand need any real benefits, or permanent engagement.

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