Mary Pilecki: Loyalty is an outcome of great customer experiences and [it] delivers customer retention, enrichment, and advocacy. All industries with consumers as customers can benefit in some way from a loyalty initiative, including financial institutions, as long as the strategy is built with these outcomes in mind. I always recommend that a brand starts with a strategy before building a program, as it isn’t always necessary to have a structured or transactional program to go with a strategy. But if a brand designs a loyalty program without first building a strategy, it risks an unsuccessful initiative if the goals, structure, and rewards aren’t aligned.

MP: Brands should assess their loyalty maturity regularly by evaluating six dimensions: strategy, research, process, technology, measurement and people. Determine how coordinated your strategy is across the enterprise (especially including customer service, marketing, and product) and how much executive support your loyalty initiatives have. Ensure that you are executing research among your customers and employees regularly, to determine if you are meeting their needs. Processes should be evaluated for all aspects of loyalty – from the ease of signing up, to effectively sharing insights internally, to managing data and privacy. Your marketing technology ecosystem should include loyalty technology you have fully integrated, and to assess measurement, determine how effective your framework for metrics is, tracking both short- and long-term impacts. Finally, consider how effective your loyalty training and development programs are, and how aligned any external stakeholders are with your initiatives.

MP: Loyalty, just like customer obsession, should be an enterprise-wide initiative. Think about it – most every person in your financial services firm has some impact on customer loyalty – whether they are directly customer-facing or not. For example, technology developers impact how intuitive a web-based loyalty app is, product managers determine what companies to partner with for rewards, and the financial team has a say in the value of rewards. We recommend that a c-suite exec sponsors the loyalty initiatives in your brand, with the role of ensuring that all the stakeholders and involved teams are collaborating and working together effectively – with the customer experience always top of mind.

MP: Emotional loyalty is harder to measure than behavioral loyalty, but it is critical to understand both how the customer acts towards your brand, as well as how they feel when they interact with your products and services. Start measuring emotional loyalty by asking the customer to complete a short survey immediately after an interaction – whether it is a call with a customer service rep, a visit to an advisor, or searching for something on your website. That will help you set a baseline. Then expand your measurements to include metrics like Net Promoter Score®, periodic surveys to track changes in feelings, and sentiment analysis on ratings and reviews left by customers, correspondence with your firm, and posts on social media. More sophisticated tools for emotional measurement include voice and facial analysis. Experiment, measure and learn. Try a tactic to improve emotional loyalty like sending a relevant, personalized offer, and measure before and after to determine what impact the activity had. It’s a cycle – testing and learning will help improve your results.

MP: Measuring the ROI of an entire loyalty initiative can be challenging, and so most marketers measure only the ROI of a particular campaign. But this ignores many of the ongoing costs of a program. We recommend starting by calculating your revenue (either actual or estimated) earned from customers in your loyalty program. Then calculate savings you’ve derived through marketing efficiencies and driving desired member behaviors. After you add these two categories together, subtract all your costs – including technology adoption, testing, implementation, ongoing operations and maintenance, labor, and the cost of the rewards that have been redeemed. Finally, Forrester’s Total Economic Impact™ framework recommends that you adjust benefits and costs based on risk, such as potential cost overruns and missed goals.