Multiplica is back at OpenFinance to talk about the relevance of generating loyalty strategies in the financial industry and the effect of increasing the Lifetime value of customers.
In the most recent talk presented by OpenFinance, Gerardo Sama, Loyalty Global Head at Multiplica touched on a very relevant topic for the financial industry, delving into the various ways to extend the Lifetime Value of customers in the industry.
Increasing LTV in the financial sector
To start the talk, Gerardo defined loyalty strategies as all marketing actions aimed at current customers and directed towards building a more valuable and lasting relationship with them; pointing out that these are not a core part of the product or service and that the company is not contractually obliged to offer them.
There is evidence that acquiring a new customer is 5 times more expensive than retaining an existing one, and that selling something new is 12 times more feasible with an existing customer than with a new one.
“Loyalty strategies are very measurable over time, and through simple tests you can easily know their effectiveness and they are usually very profitable by themselves” Gerardo Sama, Global Loyalty Head at Multiplica.
Loyalty programs increase customer LTV
Gerardo was emphatic in commenting that loyalty actions carried out by a company contribute to the extension of the customer’s Lifetime Value, generating the following benefits:
- Higher NPS leads to early adoption of new customers
- Digital experiences and added services influence upsell, cross sell and recurrence of purchase
- affinity, engagement and customer satisfaction lead to a lower churn rate.
How to implement a loyalty strategy?
To close the talk, the speaker discussed the elements that must be considered for a loyalty program to be successful, pointing out that there must be an integrated strategy, in which the first step is to decide from a strategic approach the value-added elements of the loyalty program, evaluating what the competition does to define what will be the differentiating attributes of the plan, then a business model must be created in which KPI’s can be measured and compared with the investment to obtain the profitability of the program.