The competition from the agile and nimble FinTechs coupled with evolving customer expectations and regulatory changes have massively disrupted the traditional financial services industry. Banks, in particular, are seeing high customer acquisition costs but low customer loyalty, leading to higher churn and lower customer lifetime value.
Attracting customers and offering value propositions designed to increase their loyalty is vital to long-term success of a firm’s brand. However, loyalty can no longer be gained through transaction-based customer relationship. For firms to inspire customer loyalty and eventual advocacy, they need to look beyond the transactional aspects of their relationship with customers and bring emotion in.
A “Digital Orbit Model” can help banks develop a customer engagement-centric loyalty framework and build this critical emotional aspect to drive long lasting loyalty.