Let’s start with this excerpt from a Harvard Business Review marketing paper titled, “The Value of Keeping the Right Customer.”
Depending on which study you believe, and what industry you are in, acquiring a new customer is anywhere from five to twenty times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.
This question, then, must be asked: Why do financial institutions often overlook their most profitable opportunity?
In banking, it's a well-established fact that retaining existing accountholders costs significantly less than acquiring new ones. Yet, many banks and credit unions continue to pour substantial resources into customer/member acquisition. While expanding the consumer base is important, the real goldmine lies in nurturing and maximizing the value of current customers. As we approach 2025, forward-thinking financial institutions are shifting their focus to retention-based marketing strategies, recognizing the superior return on investment they offer. This post explores five key strategies that banks and credit unions should implement now to boost customer loyalty, increase lifetime value, and ultimately drive higher ROI in the coming years.
1. Go Deep to Personalize the Accountholder Experience
Banking consumers expect a personalized experience from their financial institutions. Leveraging technologies like those patented by DeepTarget can help banks and credit unions tailor product and service offers to match individual needs, preferences, and behaviors. By utilizing AI and data driven communications, you can reach accountholders with the right message at the right time. Going deep implies leveraging information that already exists with your FI. This highly targeted approach not only strengthens relationships but also increases the likelihood of cross-selling and upselling opportunities, maximizing the lifetime value of each customer.
2. Empower Through Financial Wellness Programs
In 2025, successful financial institutions will go beyond traditional banking services to become trusted advisors in their accountholders' financial journeys. Implementing comprehensive financial wellness programs is a powerful strategy to achieve this. These programs should offer personalized financial education, interactive tools, and actionable insights tailored to each customer's unique situation and goals. By providing resources such as AI-driven budgeting apps, gamified learning experiences, and on-demand expert consultations, banks and credit unions can help individuals make informed decisions and achieve their financial aspirations. This approach not only builds credibility and differentiates your institution from competitors but also fosters deep customer/member loyalty. As people see tangible improvements in their financial health, they're more likely to view your institution as an indispensable partner, leading to increased retention and potential for additional services.
3. Promote Customer Loyalty Programs
Loyalty programs are a proven way to keep accountholders engaged and invested in your institution. By recognizing special milestones such as birthdays and anniversaries with the financial institutions and then rewarding your customers/members for their continued business—whether through special rates, rewards, or exclusive perks—you provide them with an incentive to stay loyal. Customer loyalty programs not only encourage repeat business but also create positive experiences that customers are more likely to share with friends and family. These programs can also be a great way to gather more data on your customers’ preferences and behaviors, helping you further personalize your offerings.
4. Implement Referral Programs
Your existing accountholders are your best advocates. By offering referral incentives, you can tap into your member base to help grow your institution. Referral programs encourage your loyal banking consumers to bring in friends and family, increasing your new customer/member acquisition while keeping costs low. When a current account holder provides a referral to someone, they are essentially providing a personal endorsement of your financial institution, which can serve as a powerful influence on potential new customers/members. Offering rewards like cash bonuses, gift cards, or discounts on services can make referrals even more enticing.
5. Unlock Seamless Engagement with Omnichannel Marketing
In today's fast-paced digital landscape, your accountholders expect a unified experience across all touchpoints. Financial institutions that deliver consistent, personalized interactions across online, mobile, in-branch, and social media channels reap significant rewards. By embracing omnichannel marketing, you can meet your customers where they are, providing convenience, flexibility, and a cohesive brand experience that fosters loyalty and retention.
DeepTarget's innovative solutions empower you to craft personalized experiences that drive conversions, loyalty, and growth. With our expertise, you can break down channel silos and orchestrate seamless interactions across email, mobile apps, in-branch promotions, and more. This unified approach enables you to maximize customer/member lifetime value, boost engagement, and stay ahead of the competition in a crowded market. By partnering with DeepTarget, you'll gain valuable accountholder insights, increase cross-selling and upselling opportunities, and enhance their overall experience with your financial institution.
-
Maintaining strong relationships with your accountholders is crucial for long-term success in the banking industry. Loyal banking consumers are more likely to use multiple services, refer others, and contribute to a better overall reputation for your institution. This ultimately leads to increased profitability and growth. DeepTarget’s advanced technologies can help banks and credit unions develop data-driven, personalized strategies to unlock the full potential of their digital platforms. By focusing on smart customer retention strategies, your institution will be well-positioned for success in 2025 and beyond. Let DeepTarget guide you on the path to guaranteed growth.
