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Imaginative Customer Care

A satisfied customer is a repeat customer: this is an ages-old truth in business. Customer satisfaction, however, stems not only from receiving a desired product or service for an affordable price, but also from the feeling of being appreciated as a customer and being valued by the business itself.

This, in turn, builds customer loyalty and also draws in new customers. But as times change, so do customer desires and needs. Constant innovation is what keeps successful businesses successful, and this includes devising new ways to inspire customer loyalty.

The Convenience of Flexibility

Banks and retailers are hard at work to stay on top of the changing trends driven by customers’ preference for subscription over ownership, which has changed both how loyalty is perceived and how it functions. Today, flexibility is key: customers want to be able to either pay as they go, or pay using a monthly subscription, or via a long-term contract. This flexibility provides convenience which is key to both customer satisfaction and to loyalty. In fact, the boom of the subscription-based models and their reshaping of the economic landscape is directly tied to convenience. 

With a subscription, a customer does not have to worry they will run out of a product or have a service suspended because they forgot to pay a fee on time. It also eliminates the need for refills and monthly reorders. In essence, subscription-based models make simple and repetitive purchases easier by removing the need to think about them while also ensuring desired products and services will be delivered when and where the customer needs them.

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Subscribing to a Budget

Furthermore, subscription-based models make budgeting easier by offering products or services at a flat rate, allowing customers to predict and control their spending. This becomes key in designing loyalty programs when one considers the great importance the economy and thus, the customers as well, have placed on frugality and budgeting in recent decades. Bundling is also a vital part of subscription-based offers. By offering customers the opportunity to buy all products or services for the price of one, businesses create an added value both for the customer and also for themselves, since bundling lowers both marketing and selling costs.

Another convenience of subscription-based models is the ability of easy scaling up or down, i.e. changing the level of a subscription with no additional paperwork and no waiting. In practice this can take the form of temporarily scaling down a subscription due to budgetary reasons, and then scaling it back up at a later date, or temporarily scaling the subscription up to try out features and benefits of a higher tier, with an eye towards perhaps committing fully to them in the future.

Personalize, Personalize, Personalize

Subscription personalization is what can set a subscription-based offer apart from competitors. Customers take the basic value of a product or service as a given, but what is also important for them is the ability to customize their experience of the product. By personalizing said experience, regardless of the product being a streaming service account, a car, or a payment service, the customer can make it his own by using provided benefits and upgrades. This creates added value that increases satisfaction and builds loyalty. Subscribers are interested in outcomes, not in the basic experience of managing their assets. And those services that can and do provide them with the personalization of experience and product will beat their competitors.

From the businesses' side, subscription-based services are a boon: they have made calculating and predicting revenue easy and accurate, making the cash flow consistent and providing the business with a higher valuation. Subscriptions provide solid information that can be used in drawing up investment plans and projecting both growth and needs for future hiring. At the same time they eliminate worrying about profit and loss cycles.

THE SECRET OF LOYALTY: INVESTING IN A RELATIONSHIP

Since subscription-based models are not a one-off affair, but require both the business and the customers to commit over a longer period of time, building a relationship is paramount. These relationships need to be direct and responsive. By their very nature, the relationships will be complex and will occur over multiple channels. Since the focus shifts from products, services or transactions to the customer, businesses must take into account that customer needs and wants will change over time and that it is necessary to understand what drives those changes. 

The businesses that do so will be able to provide customers with the best service the customer requires, which will in turn boost the customer’s trust and confidence in the businesses. In essence, subscription-based models have shifted the focus from deriving profit by providing a product or a service to monetizing the businesses' relationship with its customers. Subscription-based models also pressure businesses to be accountable, i.e. ensure that each step they take is done in both their own interest and in the interest of the customer.

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That Little Bit of Extra: Rewards

While subscription-based models are the way of the present and are poised to be the way of the (near) future, there is another aspect to doing business that both banks and retailers need to take into account: rewards.

Rewards are a key factor for building customer loyalty and their importance as a differentiator has never been greater, since it is the rewards that create significant added value and increased satisfaction to the customer. Higher value for purchases or large up-front bonuses are among top give-backs customers cite as reason for switching their primary card. Simplicity is also key, both in earning rewards but also in redeeming them, preferably at the point of sale. 

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Advances in augmented reality (AR) technology provide consumers with the ability to analyze product information and read reviews in real time, while on the move. By removing the need to research at home, tied to a desktop computer, AR ensures that consumers are always up to date and can make informed decisions on the spot. This is a benefit that many customers may take advantage of and smart businesses will adapt to. 

Here is something banks and retailers should take into consideration with regard to the new trends where over half of today’s customers would be willing to share their personal information with a business if that means they will receive personalized offers. In essence, this is the era of smart recommendations, where the records of past consumer behavior and user data are used to make suggestions. 

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This also increases confidence and builds loyalty and may become a deciding factor that will attract a customer to a business - or to a business’s competitors, should they provide it first or better.

Rewards, however, will (and need) to go beyond the presently standard loyalty card. Digitizing coupons and offers is only the first step towards expanding rewards from the realm of simple payments and payment-related benefits into a wider realm of experience-based rewards which reflect a particular customer's needs and can be delivered to them seamlessly and in real time. In the end, just as with subscription-based offers, personalization and customization of rewards is what will provide banks and retailers with an edge in an increasingly competitive arena.