EDITORIAL: It’s time to stop banking on the public’s loyalty

At last, it seems the banks are following the lead set by other

high street traders and getting into rewarding customer loyalty, with

Barclays and Lloyds leading the way.

We fear, however, that they may be falling into the trap outlined in our

Focus on page 16; that of hoping a card or scheme will in itself

generate loyalty, rather than simply rewarding loyalty which has already

been earned with excellent products and service which the customer

values more than points or prizes.

The fact is that banks have traditionally enjoyed very high levels of

customer loyalty, simply because the trauma of moving a bank account and

all its associated services was so great that most customers would

endure almost any indignity to avoid doing it.

But time is running out for this form of ’distress loyalty’ as more and

more financial services operators offer telephone banking schemes, which

put an end to the chore of visiting branches and filling in endless

forms.

Soon moving a bank account, or switching credit card providers, will be

as painless as picking up a telephone and giving a few simple

instructions.

When that happens, the banks must rely on genuine customer loyalty and,

as we’ve said on these pages so often before, that’s going to mean

continuing improvements to the core product.

Fortunately, there are encouraging signs of change. Telephone banking,

with all its convenience, is being embraced, and branches are starting

to look less like government offices and more like places we might

actually want to visit.

Financial products themselves are becoming more varied and attractive,

with help from government policies encouraging all of us to take more

responsibility for our own financial futures, and there are signs that

in the traditionally stuffy boardrooms of banking the value of a strong,

flexible brand is at last becoming widely recognised.

What is needed now is for the banks to embrace not just the form of the

supermarket chains, which are leading the way in customer service, but

their content as well.

What about a ’one in front’ scheme in bank branches? It’s only by

addressing those basic customer gripes, like seemingly endless queues,

that banks will ever generate the sort of customer loyalty that doesn’t

disappear when a better offer comes along.

This article was first published on Marketing