Loyalty program providers, Kobie included, often advise young businesses that loyalty from the get-go is much easier to implement than loyalty after the fact. Customer rewards programs work best when they are organically and seamlessly wedded to the brand promise. This is especially true when it comes to “legacy banks” – a financial services industry subset that has historically struggled with best-in-class customer engagement as a transactions-only perception persists.
But that perception is beginning to change.
Launched last month, GoBank – considered the first branchless lending institution designed solely for mobile devices – is tackling loyalty from the ground up, marketing itself to Millennials. Just out of beta, the bank is partnering with Barnes & Noble to promote its financial services in 555 Barnes & Noble-run college book stores. Mind you, this is the demographic least likely to be branch bank-affiliated, yet also the most mobile-savvy. Underscoring the point: a 2011 Federal Reserve survey found that while those in the 18-29 age group make up 22.4% of mobile phone users, they also comprise nearly half, 44%, of those who do their banking on mobile.
While GoBank hasn’t announced any specific loyalty programs just yet, it is already employing several highly effective loyalty-generating tactics, including:
- Enhanced transparency and customer empowerment: members can choose how much they want to pay for the service – prices range from $0 to $9 per month. There are also no ATM withdrawal fees, no minimum balance requirements and no overdraft penalties
- Extreme dedication to the app-based customer experience: the fact that GoBank has been in beta testing since January speaks to that dedication
- A budgeting tool: This is likely to include gamified elements, making saving money a fun and engaging experience rather than a boring chore
- Integration with social media: bank customers can send money directly to other individuals via Facebook (or email)
GoBank’s emphasis on mobile makes sense not just for Millennials, but for all next-generation consumers. Much has been written of late regarding the effectiveness of mobile wallets, the future of virtual currencies and the need for industry standardization. Turning mobile banking into a ubiquitous and engaging experience – supported by a loyalty mindset – is a vital first step in shifting consumers’ mindsets, heralding all-mobile customer engagement.
But what’s next for GoBank? Attracting new members, first of the Millennial demographic and then beyond, would seem most logical. With about 10,000 customers so far, the bank must grow rapidly if it hopes to survive. And while pay-what-you-want fee structures might be a good way to entice in-debt college grads, this probably needs to be adjusted. Instead of removing the offering, though, perhaps it should remain a customer perk for those who have helped establish new accounts and future brand ambassadors.
What is your take on GoBank? What impact do you think it will have on how legacy banks update their own loyalty and customer engagement programs?? Let us know in the comments below.
