The following is from the Q&A session of our most recent webinar entitled, “Trends in Banking Loyalty and Customer Communication.” To view a recorded version of the webinar, please click the link.

You mentioned that the marketing, especially on web sites, was getting more simple and streamlined. Are the products themselves doing that as well, or is it just the marketing?
The products are definitely getting more complicated, but the banks are working toward communicating about them in more simple terms. One example is the way that banks are communicating fees on the accounts. The banks have tried to get the fee information down to just one page of disclosures to easily convey the most important and common fees and conditions. With the packaging of products, customers must often meet more and more conditions in order to qualify for preferred pricing. That usually means maintaining a certain minimum balance or the requirement to utilize the product a minimum number of times each month.

Are product packages actually increasing loyalty? What stops customers from switching banks not on a simple product base but on an entire bundle?
The product packages that are based only on demand deposits don’t necessarily tie customers that strongly to the bank. For that reason, banks are focusing on rewards, self-servicing options and packaging loans and investment products with demand deposit products. One example of rewards is BankAmeriDeals. Customers earn rewards through the credit and debit card, but they must bank online to receive the rewards. The rewards are also available through the mobile app, which allows customers to use rewards at the point of sale. That approach effectively ties five products together. If the customer finds those rewards valuable, they are less likely to switch to another bank. In terms of mobile apps we’ve seen a lot of advancement in the functionality to make them more useful. One reason is just because of natural evolution, but another is because banks are trying to stay ahead of the competition. Providing a great mobile experience might not entirely prevent customers from leaving, but it might provide at least one reason to stay. Online bill payment would also fit into this category. More importantly; however, is that a lot of the packages now include investment or loan products. Those products are much more difficult to move, so packages that include them tie the customer more strongly to the bank.

Are discounts needed to encourage bundling?
The idea behind the bundling is that it provides customers with something they can’t get by purchasing the products individually. So, yes, discounts are needed.

Are there any moves among banks towards building an emotional/communal value offer?
Most of the offers we see are based on cash incentives or features and benefits such as ease, simplicity, control, and financial management. Emotional appeals are more frequently seen in investment offers, specifically retirement. We sometimes see communal messages in print or statement inserts. An example would be Chase’s Community Giving program. The bank communicates it in statement inserts and online, specifically through Facebook.

For the customer who is primarily self-servicing through remote channels, do you have any recommendations on how banks should communicate with them?
Banks need to consider communicating with the self-servicing customer when the customer has logged into online banking or the mobile banking app, possibly even within email alerts. This obviously needs to be done very carefully – if not done so, it runs the risk of irritating customers.

Roughly 30% of our customers don’t do online banking. Do you think banks should keep trying to convert them, or focus on the customers that are already doing online banking?
If a customer has been with the bank for a long period of time, and has received repeated communications about online banking and bill payment, but still hasn’t converted, it’s most likely that the customer won’t convert. Instead, banks should probably focus on getting new customers enrolled in online banking immediately.

It seems like a lot of messaging is done on the statement, or as statement inserts. But as the industry pushes its customers to receive paperless statements, how does that affect customer communication?
By pushing customers to paperless statements, banks lose statement inserts as a communication channel. That’s potentially a big loss based on how much customer communication is currently done that way. Banks generally provide online PDF versions of the statements and include all of the statement inserts, but it’s questionable as to how many people really read the inserts in the electronic format. Obviously banks need to evaluate other channels – online, email and mobile.

You talked about website redesigns. We all know that people are resistant to change. How do customers feel about website redesigns? Is a redesign a dangerous thing to do, because it runs the risk of confusing customers?
It’s well established that customers don’t like change, so any changes need to truly make navigation or some other immediately visable aspect easier for customers. The recent efforts by banks to redesign their sites were right on target though. The navigation is truly easier and customers aren’t bombarded by multiple marketing messages.