Loyalty in Financial Services - UK - September 2012
Some questions answered in the 'Loyalty in Financial Services' report include:
- Who is most likely to have switched accounts?
- How cynical are people about banks’ claims to reward loyal customers?
- Do people think that loyalty has a non-financial payoff?
- How can financial services firms sidestep the price wars?
- How can banks give people an excuse to stay put?
In the financial services industry, loyalty is a huge issue. Motor insurance has long struggled to cope with the growing commoditisation of the product, and the expansion of price comparison sites has exacerbated the problem. Other general insurance markets are following suit. A sizeable group of consumers are taking a similar approach to savings products, particularly in the cash ISA market. They keep careful tabs on the best-buy tables and the price comparison sites, and show little hesitation in changing accounts if they can get a better deal elsewhere.
Financial services providers might mutter about ‘rate tarts’, but the truth is that they have played a huge part in fostering this mentality. The focus on new customer acquisition has meant that rather than feel that their loyalty is valued, longstanding customers often feel that they’re being taken for granted. When many deals are only open to new customers, it’s no wonder that 43% of respondents to Mintel’s consumer research feel that ‘if you show loyalty to a financial services firm, they'll only ever take advantage of it’.
This report investigates consumers’ attitudes towards loyalty in financial services. It looks at perceptions of how financial services firms compare with other types of company when it comes to rewarding loyal customers, and how this feeds through into consumer behaviour. Loyalty is compared across a range of financial services products, and among those who have switched, Mintel has attempted to discover what prompted them to move accounts.
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