Customer Retention Strategies for Banks: Customer Experience is Key

April 19, 2021


Bank Customer Retention: Why It Matters

You’ve probably heard this more than a dozen times: retaining a customer is so much cheaper than acquiring a new one.

This holds true for banks and financial services providers, too. Here are some bank customer retention statistics to consider:

According to Customer Think, the costs of acquiring a banking customer are estimated to be around $200 while the typical customer generates only $150 in revenue each year. That means the relationship does not become profitable for the bank until well into the second year.In banking, the annual churn rates on new customers hover in the 20 to 25 percent range during the first year, with half not making it past the first 90 days after opening their accounts.

A few more statistics reveal how customer experience — more so than digital strengths, rewards program, or coverage options — could be the key for banks that prioritize customer retention.

80 percent of consumers would switch financial institutions for a better experience.According to Kantar, banks that lead in the customer experience index have a recommendation rate that is 1.9 times higher than banks at the lower end of the index, their share of deposits is 1.9 times higher, and their customers are 2.1 times more willing to take up new products and services from their bank.Banks that let their customer experience decline risk losing up to 12.5 percent of their share of deposits.

As these numbers suggest, providing an effective, easy, meaningful, and effortless experience is one of the keys to reducing customer churn. Therefore, to improve customer retention in banking, organizations must focus on becoming more customer-centric — and delivering experiences that wow, delight, and inspire loyalty.

Customer Retention Strategies for Banks

Start a Customer Newsletter Campaign

Staying engaged and in regular communication with your banking customers beyond their branch visits can make a big impact on your customer retention efforts.

Start a customer newsletter campaign. By doing so, you can foster trust-based relationships that help encourage preference and inspire loyalty. It also allows you to show customers how much you appreciate their business, as well as build the kind of goodwill essential to getting recommendations and referrals.

What should be on your newsletter? The content doesn’t exactly have to be promotional. You can discuss industry trends,

By: Migs Bassig
Title: Customer Retention Strategies for Banks: Customer Experience is Key
Sourced From: www.reviewtrackers.com/blog/bank-customer-retention/
Published Date: Wed, 24 Mar 2021 14:00:07 +0000

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