Affluent middle class consumers demand greater recognition and personalized experiences from retail banks

LOS ANGELES, Sept. 16, 2015 /PRNewswire/ -- In an increasingly competitive retail banking market, nearly two-thirds of U.S. affluent middle class consumers expect greater rewards for their loyalty, according to research from Collinson Group. These consumers also expect more personalized communications and services, with only 41 percent of customers feeling as though their bank knows and understands them.

The study of more than 4,400 affluent middle class consumers across eight global markets, including 1,000 U.S. consumers, reveals the changing attitudes and expectations toward banks.

The study found that half of respondents are not satisfied with their banks and are considering or have already switched providers within the last two years.  Many consumers feel that banks are not performing as well as they could, and as a result, retail banks in the U.S. are missing out on the opportunity to create powerful advocates and attract repeat business from loyal customers.

• Fifty-six percent of affluent middle class Americans are currently members of bank loyalty initiatives, and are more likely to be members of an airline (80%), hotel (76%), grocery (71%) or credit card (68%) loyalty programs.
• Affluent middle class consumers in the U.S. who feel loyal to a brand are 81 percent more likely to purchase a product from them in the future, and 72 percent would recommend a brand to their friends and family.
• Sixty-nine percent of affluent middle class consumers in the U.S. who feel loyal to a brand are engaged members of their loyalty program and 64 percent will go out of their way to do business with the brand.

Christopher Evans, director at Collinson Group says, "While the percentage of customers switching accounts today is low, we've seen an increase year on year. Increased competition and the popularity of easy-to-use comparison websites are providing customers with more choices and ultimately more expectations. Knowing your customer and ensuring they feel valued are key tenets of establishing loyalty and banks need to act now if they want to retain customers."

Banks are losing their position as a 'one-stop shop' for financial services, with savvy consumers increasingly looking elsewhere for additional services and choosing a range of financial service providers that best suit their needs and expectations. 

• In the U.S., customers purchased services such as insurance through a credit card (79%) rather than a bank (34%).  In contrast, these services are sought through comparison sites in the UK. 
• When a customer does buy additional products through their bank, they are more loyal, with 61 percent less willing to switch provider.

This highlights a dual benefit for banks to offer more premium services, such as insurance and travel assistance, to increase revenue and enhance the customer experience.

"Our research found that not being rewarded for loyalty is the biggest frustration for consumers, as cited by more than one-third of U.S. respondents, ahead of poor interest rates and unnecessary fees," said Evans. "Many banks offer basic, transactional loyalty programs that rely on traditional points-based rewards with limited value and appeal, which may explain why affluent middle class consumers are more likely to be members of supermarket, airline, credit card and hotel loyalty programs ahead of banks."

With increased competition in the sector, encouraging the most valuable customers to become active members of loyalty programs can be a powerful tool in improving satisfaction, retention and achieving repeat business. Personalized and consistent communications, rewards and service, regardless of how customers choose to interact with a bank, are also important to the affluent middle class.  The study found that customer engagement improves by one-third amongst individuals who 'feel known' by their bank, and a further one-third for those who say they receive a consistent multichannel service – whether in person, by phone or via digital platforms. 

Collinson Group research has previously highlighted how today's affluent consumers place a higher priority on family, altruism and enriching experiences, ahead of short-term satisfaction, and this is reflected in their expectations of banks.  In the U.S., 82 percent of affluent consumers expect their banks to be ethical, the highest percentage within the eight countries involved in the survey, highlighting the greater scrutiny and expectation of banks in America. 

Transparent, ethical behavior is increasingly important and financial services or organizations need to demonstrate the value of their loyalty programs to encourage active participation.  Personalized, aspirational and more lifestyle-orientated benefits and rewards, which are more accessible to earn and redeem, will enable banking brands to differentiate themselves and attract and retain the most affluent consumers. 

About the research
Research was conducted online by an independent research specialist, Research Now, on behalf of Collinson Group in Brazil, China, India, Italy, Singapore, the United Arab Emirates, the U.S. and UK with 4,437 consumers within the top 10-15 percent income during August 2014.

About Collinson Group
Collinson Group (www.collinsongroup.com) is a global leader in shaping customer behavior to drive revenue and value for clients. 

The Group offers a unique blend of industry and sector specialists who together provide market-leading experience in delivering products and services across four core capabilities: Loyalty, Lifestyle Benefits, Insurance and Assistance.

The group provides unrivalled insight and expertise around affluent consumers and frequent travellers, creating and delivering products and services that increase engagement, loyalty and value for customers.

We have 25 years' experience, with 28 global locations, servicing over 800 clients in 170 countries, employing 1,500 staff, and managing over 20 million end customers. Our clients include: MasterCard, VISA, Diners, Cathay Pacific, British Airways, Air France KLM and InterContinental Hotels Group.

Collinson Group comprises leading brands including: Priority Pass, Columbus Direct, ICLP, Collinson Latitude.

SOURCE Collinson Group

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