Brand loyalty is a goal all companies strive for, and BankingRefunds.co.uk’s latest research reveals that the secret to driving long term loyalty could be as simple as treating customers to perks, for nothing.
The packaged bank account claims specialist polled 1,500 Brits on their love of perks and benefits to see if they are really beneficial in cultivating a connection between brands and their customers.
The research reveals consumers appreciate brands that go the extra mile to provide extra benefits; even if they are covered in the cost of a purchase (35 per cent), believing that it inspires a connection and long term loyalty (23 per cent).
Whilst many brands offer discounts and other benefits to consumers on their birthdays, the research highlighted that by tailoring perks personally, brands can fuel the feeling of being ‘special’ that is commonly associated with receiving perks (36 per cent), alongside potentially driving sales.
The study suggested that it is important for brands to make sure that the perks are relevant and useful to their customers to effectively build a connection with them.
Research specially focused on packaged bank accounts revealed that the top five most sought after packaged bank account perks reflect our modern way of living:
· Amazon Prime subscription (37 per cent)
· Netflix subscription (31 per cent)
· Exclusive discounts (30 per cent)
· Holiday insurance (27 per cent)
· Cashback opportunities (24 per cent)
However, the most common packaged account benefits currently offered by banks are; mobile phone insurance, travel insurance, and breakdown cover (based on benefits offered by Halifax, NatWest and Lloyds Bank). Whilst these may be considered essential, the research suggested that these may not be the most appealing to consumers as they cannot typically be used day-to-day.
Almost half (43 per cent) of those who have mobile insurance with their packaged bank account have never used it, likewise 40 per cent of those with breakdown cover have also never used the benefit.
This suggests that while many consumers have packaged bank accounts because it works out cheaper (versus paying for each element individually), the typical benefits get very little use in day-to-day life. To inspire greater brand loyalty, brands might reflect on the perks they offer, as offering sought-after and daily use perks such as Netflix subscriptions could make consumers feel they are getting more from their benefits.
Interestingly, the older we get, the less likely brands are able to seduce us with perks. While almost a third (29 per cent) of 18 – 24 year olds say they love a perk, and are even prepared to receive a basic product or service to receive something extra (35 per cent); a third (35 per cent) of Brits aged over 65 say they can see straight through these freebies.
Older consumers also have a more cynical attitude towards the effectiveness of perks being used to create brand loyalty with only 12 per cent seeing it as an effective method, while 37 per cent of younger consumers (aged 18 – 30) believe that they do inspire brand loyalty.
In addition, the study suggested that because young consumers now expect brands to offer them perks (29 per cent), if these do not fit their needs, brands are at risk of jeopardising the connection established between them and the consumer, by appearing old fashioned or behind the times.
Carl Millar, managing director at BankingRefunds.co.uk says, ‘Everybody loves a perk, and there is no better feeling than getting a freebie. Our research suggests that they are a great way for brands to cultivate brand loyalty especially with young consumers, which in turn could drive more revenue.
‘However, our findings highlights the importance of any benefits needing to be tailored to the wants and needs of consumers. Millennials believe perks are effective in establishing a connection with a brand, and it can be strongly suggested that brands with a younger core demographic are likely to gain the most from investing in perks to drive revenue or acquisition.’