One of the most important ways of retaining customers is through loyalty benefits, but research from Railsbank has found that only 35% of Brits are happy with the loyalty rewards they get from their bank and 37% of credit card holders don’t know what interest rate they are getting on their cashback or other rewards. The research also looked at the growing interest in accessing credit, loans and investments from non-traditional brands.
The research also revealed that people are interested in financial products from brands they love or trust, or where the loyalty rewards might be more valuable and relevant to them:
- 39% of consumers are interested in accessing financial services like credit, loans or investments from brands they love and trust;
- 56% of 18-24 year olds are interested in a credit card from their favourite high street brand, 55% from their favourite band and 42% from a favourite sports team.
The findings from Railsbank’s survey of 2,010 GB consumers highlights the scale of the opportunity for brands to engage with younger consumers and build loyalty with seamless embedded finance experiences.
“Where legacy finance might be worried, brands should see opportunity,” said Nigel Verdon, CEO and co-founder of Railsbank. “Interest and cashback has lost its appeal among consumers. What once worked well will not guarantee future success. Forward-thinking brands are already building financial experiences into their customer journeys, delivering better rewards and experiences that young people value.”
The changing face of rewards
Loyalty rewards are important to consumers with 59% stating that they like getting something back in return for their loyalty and 49% seeing a benefit in rewards helping their money go further. Some 38% of consumers feel more loyal to a brand if they receive rewards and 37% are likely to spend more money with a brand that provides loyalty rewards. Only 16% of people believe that rewards have no impact.
When asked which industries offer the best rewards and experiences, 49% of consumers feel that supermarkets currently give them the best rewards. Music (9%), banking (8%) and sports (7%) industries came bottom, presenting a real opportunity for sports teams and music brands to engage their loyal fan bases.
Cashback is found to be the most popular reward amongst the GB population as a whole, preferred by a third of people (33%). However, for 18-24 year olds, discount codes (27%) are clearly preferred; ahead of cashback (19%), free shipping (15%) and points to redeem later (11%).
57% of UK consumers want rewards that reflect their spending behaviour, or tie into their passion, or hobbies. What’s more, young adults are also twice as likely to be interested in alternative rewards options such as charity donations, exclusive access to products and exclusive content compared to the general population. In fact, 52% of 18-24 year olds are interested in a credit card that would actively support sustainability and the environment with every purchase, and 48% would like a credit card that automatically donates to charity with every purchase.
Nigel Verdon added: “It’s clear that consumers want a new type of brand loyalty experience; one which shows that they are understood and valued. Younger consumers are more environmentally and socially conscious and brands who want to build relationships with them need to recognise that cashback and financial rewards are losing their power. Major brands, particularly in the music and sports industry, should think about how embedded finance experiences can support loyalty and give customers better experiences.”
Railsbank launched a new industry category, known as Embedded Finance Experiences, and vision for the future of finance at Web Summit 2021.