Table of Contents
Introduction
Executive Summary
-
- Putting financial services firms in context
- Consumers rate supermarkets as being best at rewarding loyalty
-
- Figure 1: Firms that best reward customer loyalty, March 2011
- Share of wallet and length of primary banking relationship
- Most people have been with their bank for at least a decade
-
- Figure 2: Length of time with main bank, March 2011
- Share of wallet
-
- Figure 3: Product ownership, March 2011
- The affluent are much more likely to look beyond their main bank
-
- Figure 4: Repertoire of product ownership with main bank, by household income, March 2011
- Reasons for staying loyal to financial services firms
- Familiarity and convenience key to the main banking relationship
-
- Figure 5: Reasons for staying with main bank, March 2011
- Signs of changing attitudes towards loyalty
- Views on rewarding loyalty
- Cynicism over financial firms’ approach to loyalty
- Are firms rewarding the right kind of loyalty?
- What we think
Issues in the Market
-
- Are people loyal to the firms that reward their loyalty?
- What do financial services customers mean when they talk about loyalty?
- How can financial services firms improve their reputation for rewarding loyal customers?
- Do people care about whether or not financial services firms reward their loyalty?
Future Opportunities
-
- Time to slow it down?
- Learning from the supermarkets
The Financial Services Industry In Context
-
- Key points
- Supermarkets are by far the best at rewarding loyalty…
-
- Figure 6: Firms that best reward customer loyalty, March 2011
- …but how loyal are supermarket shoppers?
-
- Figure 7: Brand loyalty in food retailing, August 2010
- Figure 8: Brand loyalty in the current account market, April 2010
- Loyalty schemes are only a minor consideration for food shoppers
-
- Figure 9: Factors considered for choice of a particular supermarket for main weekly shopping, May 2010
- The contrast between banks and mobile phone networks
-
- Figure 10: Length of time spent with current mobile phone provider, 2006-10
What Defines Loyalty?
-
- Key points
- What does loyalty mean?
- Customers define loyalty in terms of time, not product holdings
-
- Figure 11: Most important measure of loyalty, March 2011
- Cross-generational agreement
Existing Loyalty Schemes
-
- Key points
- The growth of customer-only deals
- Santander attempting to increase current account sales through a loyalty-based approach…
- …and restructures its current account charges to reward loyal customers
- Banks and building societies launch a raft of customer-only savings products
- Supermarkets leverage their existing reward schemes
- Card rewards are a powerful draw for consumers...
-
- Figure 12: Features desired in a credit card, April 2010
- …but for most, loyalty should mean better rates
Length of the Primary Banking Relationship
-
- Key points
- Until death do us part?
-
- Figure 13: Length of time with main bank, March 2011
- Loyalty across providers
-
- Figure 14: Length of time with main bank, by main bank, March 2011
- The challenge of chasing ‘high-value’ customers – in terms of age…
- …and affluence
-
- Figure 15: Length of time with main bank, by socio-economic group and household income, March 2011
- Even recent switchers believe it is how long you’ve been with a bank that counts
-
- Figure 16: Most important measure of loyalty, by length of time with main bank, March 2011
Share of Wallet
-
- Key points
- Cross-sales are important in most sectors…
-
- Figure 17: Product ownership, March 2011
- …but people still hold most of their products with other providers
-
- Figure 18: Repertoire of product ownership with main bank, March 2011
- What is holding back cross-sales?
- The difference between cross-sales and share of wallet
-
- Figure 19: Repertoire of product ownership with main bank, by gender, age and household income, March 2011
- Lloyds TSB leading the way at increasing product holdings
-
- Figure 20: Repertoire of product ownership with main bank, by main bank, March 2011
- The link between long-standing customers and multiple product holdings
-
- Figure 21: Repertoire of product ownership with main bank, by length of time with main bank, March 2011
- For multiple account holders, loyalty is measured by time, not ownership
-
- Figure 22: Most important measure of loyalty, by repertoire of product ownership with main bank, March 2011
Loyalty and General Insurance
-
- Key points
- General insurance is notoriously lacking in loyalty
- Lack of loyalty most pronounced in the motor sector
-
- Figure 23: Insurance product ownership, by length of time insurance products held, August 2010
- Even the ‘loyalists’ keep an eye out for a better offer
-
- Figure 24: Car insurance renewal behaviour, January 2011
- The trade-off between price and loyalty
-
- Figure 25: Renewal premium experience, by car insurance renewal behaviour, January 2011
- Loyalty through niche cover
- A return to preferential treatment for loyal customers
- Insurance led the way in driving churn – can it lead the way in pricing for loyalty?
- Share of wallet or length of policy?
Long-term Investments and the Advice Market
-
- Key points
- Collectives show huge levels of churn
-
- Figure 26: Gross and net retail sales of OEIC and unit trusts, 2010
- The switching incentive…
- …and the risk of consumer detriment
- Some attempts to build loyalty in the pensions industry…
- …but it’s not free of controversy
- Is loyalty to the adviser, or the adviser firm?
- Adviser/provider loyalty undermined by new technology
- Still scope to increase contact with IFAs
-
- Figure 27: IFA usage, March 2011
Loyalty: Affection, Habit or Convenience?
-
- Key points
- The comfort of the familiar
-
- Figure 28: Reasons for staying with main bank, March 2011
- The hassle factor
- Maintaining the traditional options
-
- Figure 29: Reasons for staying with main bank, by age, region and socio-economic group, March 2011
- Santander: better interest rates helping maintain share
-
- Figure 30: Reasons for staying with main bank, by main bank, March 2011
- Is four years the tipping point for loyalty?
-
- Figure 31: Reasons for staying with main bank, by length of time with main bank, March 2011
- When a firm’s best interests clash with its customers’ opinions...
- ...and when first impressions can be misleading
-
- Figure 32: Reasons for staying with main bank, by repertoire of product ownership with main bank, March 2011
Do People Think Financial Firms Show Loyalty?
-
- Key points
- Consumers question financial firms’ loyalty...
-
- Figure 33: Attitudes towards loyalty in financial services, March 2011
- ...but the feeling is mutual
- No preferential treatment for loyal customers means a fairer deal for all
- You get back what you put in
-
- Figure 34: Main bank, by attitudes towards loyalty in financial services, March 2011
- Idealism among the young...
-
- Figure 35: Attitudes towards loyalty in financial services, by gender, age and household income, March 2011
- ...while higher earners are most likely to dismiss the concept
- The loyalty paradox: long-serving customers least likely to think loyalty pays...
-
- Figure 36: Length of time with main bank, by attitudes towards loyalty in financial services, March 2011
- ...and product holdings do not seem to translate to a perception of loyalty
-
- Figure 37: Repertoire of product ownership with main bank, by attitudes towards loyalty in financial services, March 2011
- Short-term payoff, long-term cost?
- Some encouragement: people tend to think their custom is valued...
-
- Figure 38: Agreement with the statement ‘I feel my bank values my custom’, March 2011
- ...and Nationwide comes out strongly again
-
- Figure 39: Main bank, by agreement with the statement ‘I feel my bank values my custom’, March 2011
- The thrill of the new
-
- Figure 40: Length of time with main bank, by agreement with the statement ‘I feel my bank values my custom’, March 2011
- CRM systems show their worth
-
- Figure 41: Repertoire of product ownership with main bank, by agreement with the statement ‘I feel my bank values my custom’, March 2011
Rewarding Loyalty
-
- Key points
- Eight in ten feel that loyal customers should get better deals...
-
- Figure 42: Attitudes towards rewarding loyalty in financial services, March 2011
- ...but less than a fifth think that it actually happens
- Little difference across the main banks’ customers
-
- Figure 43: Main bank, by attitudes towards rewarding loyalty in financial services, March 2011
- The grass is always greener
-
- Figure 44: Length of time with main bank, by attitudes towards rewarding loyalty in financial services, March 2011
- Reaping the rewards of cross-sales
-
- Figure 45: Repertoire of product ownership with main bank, by attitudes towards rewarding loyalty in financial services, March 2011
- The Faustian pact
- Is loyalty an outmoded concept?
Appendix – Main Financial Provider
-
-
- Figure 46: Main bank, by demographics, March 2011
-
Appendix – The Financial Services Industry in Context
-
-
- Figure 47: Firms that best reward customer loyalty, by demographics, March 2011
- Figure 48: Firms that are least good at rewarding customer loyalty, by demographics, March 2011
-
Appendix – What Defines Loyalty?
-
-
- Figure 49: Most important measure of loyalty, by demographics, March 2011
-
Appendix – Length of the Primary Banking Relationship
-
-
- Figure 50: Length of time with main bank, by demographics, March 2011
-
Appendix – Share of Wallet
-
-
- Figure 51: Repertoire of product ownership with main bank, by demographics, March 2011
-
Appendix – Loyalty: Affection, Habit or Convenience?
-
-
- Figure 52: Reasons for staying with main bank, by demographics, March 2011
-
Appendix – Do People Think Financial Firms Show Loyalty?
-
-
- Figure 53: Attitudes towards loyalty in financial services, by demographics, March 2011
-
Appendix – Rewarding Loyalty
-
-
- Figure 54: Attitudes towards rewarding loyalty in financial services, by demographics, March 2011
-
Back to top