banking 1

• Sam Walton: 'There is only one boss. It is the client. Client can fire any employee in the company by simply spending money somewhere else.'
• CRM


  Customer Relationship Management
• Topics covered in CRM

  • What is CRM?
  • Behavior of clients
  • Client loyalty
  • CRM through conflict
  • Employee satisfaction
  • Service culture establishment
  • Client retention economics
  • Client segmentation
  • Conclusion
• What is CRM?


  • It covers all aspects of interaction financial institution/company with clients
  • It is the strategy of obtaining important data on clients and acting based on that data aiming to establish a lasting relation
  • What makes the difference is not the brand, image, promotion or price – it is the service!
  • Orientation of financial institutions/ companies is no longer towards the product/service but towards the client
• CRM


  • Spans over marketing management, HRM and product management
  • The aim of CRM is to increase the sales transactions, profitability and primarily assuring the client satisfaction
  • The CRM core is the marketing client data base. Financial institution must have special client, employee, products, suppliers, distributors etc. data bases
• Activities that allow familiarization with clients

  • Data management – the process of acquiring and revisiting the client data
  • Understanding the clients – based on the data base analysis the institution can profile the clients and segment them based on their value
  • Knowledge about the market – the institution must understand all external factors that influence the clients (political, economic, social)
  • Client communication – data base is used to check who should be contacted, in what manner and when to take action
  • Sales – data base gives us the insight into potential triggers for sale of higher value products weather we speak of direct mail or phone calls made with the aim to retain the clients
  • Service – by utilizing the data base we can have the insight into which service the clients used and if we have the data on the service costs, they can be monitored for every client separately
  • Information about operations – client data base is the only base that contains all client data in one place. They can be used by suppliers and partners as well
  • Company management – data base enables the supplier and partners to identify the types of companies that achieve the best results and to improve them
  • Product planning – data base offers insight into the best possible way to satisfy the client needs
• Client


  The person or organization that buys products or services
• Theoretical perspectives on the client purchase decision making process

  • Economic approach
  • Passive approach
  • Cognitive approach
  • Emotional approach
• Economic approach


  Human is economic and rational being. To the human price, timing, condition of payments are crucial

  
  

  Critique: This approach is too idealistic and simplified. The human is not perfect and is limited with his/her abilities, skills and habits.
• Passive approach


  Human is impulsive being, susceptible to external impacts, advertisement in particular

  
  

  Critique: The human can be more complex than it is stated. The clients can rarely be manipulated
• Cognitive approach


  The human is cognitive being Human thinks when making purchase and seeks for different information

  
  

  Critique: It is not possible to make perfect decision since we never have complete information
• Emotional approach


  Human is influenced by emotions and mood. In marketing emotions are most frequently used in food, clothes and beverage advertisement
• Business trends like deregulation, globalization, technological development and Internet changed the rules of the game for the institutions striving to achieve competitiveness
• It is necessary to know the clients, to constantly adjust the marketing strategies
• The main attribute of the successful financial institution is readiness to clearly understand current and future client behavior, that is knowing and satisfying the clients' wishes and needs
• Loyal client


  Makes for 40% of the total sales or service placement
• High level of satisfaction and met expectations


  Create loyalty, i.e. emotional affinity towards the brand
• Types of client loyalty

  • Non-existent
  • Inertial
  • Latent
  • Supreme
• Other types of loyalty

  • Price loyalty
  • Monopoly loyalty
  • Emotional loyalty
• Loyalty


  Is a journey not the destination
• What clients want in every communication with financial company/institution

  • Value
  • Communication
  • Attitude
  • Reliability
  • Quality
  • Guarantee
  • Comprehension
• Nourishing the service culture implies that the financial institution has self knowledge, knows its competition, service quality and the clients
• 4% clients bring 20% of sales and 29% of profit, 26% clients bring 50% of sales and 55% of profit, Other 70% clients bring 20% of sales and 29% of profit
• Client retention


  Important for the following reasons: High costs of new clients attraction, Client retention rate volatility, Budgeting for the financial services, Not all clients have the same value
• Segmentation


  Identification of individuals and financial institutions with similar attributes that have important implications for the marketing strategy
• Kotler's segmentation factors


  • Geographical
  • Demographical
  • Psychographic
  • Behavioral
• Brand segmentation


  • Behavioral dependence
  • Personal dependence
  • Love and passion
  • Nostalgic relation
  • Relation with oneself
  • Intimacy
  • Partner quality
• Crucial element that allows clients to make difference between one financial institution from another is overall experience the client has with the institution
• CRM is one of the most important concepts in the modern marketing
• CRM answers to main questions: How to identify the clients' needs? Which clients are worth investing in?
• Clients should be carefully listened and they will tell what and when they want it themselves
• -Non-existent – low connection to the product (it does not matter which product is used)

  -Inertial – low connection and high rate of repeated purchase (the same product is habitually purchased)

  -Latent – high connection and low rate of repeated purchase (e.g. we always eat cakes in the same bakery but when we are in a different city we eat other bakers’ cakes as well)

  -Supreme – high connection and high rate of repeated purchase¢
• -Price loyalty – when these clients leave, it is due to the life style change.

  -Monopoly loyalty – the quality of service matters for the client retention.

  -Emotional loyalty – these clients are the most profitable.
• In client relations the conflict can arise when the company makes mistakes, clients or a third party.
• Institution should know the most about itself and should know the answers to the following questions:

  1.What are your market advantages and disadvantages and how you differ from competition? Do you know which marketing infrastructures are at your disposal and are your clients ready for them?

  2.What is the current awareness and knowledge level about your product, brand and service? Is there something you did not investigate?
• Institution should know the most about itself and should know the answers to the following questions:

  3.Which emotions and values your clients attach with your financial institution? Are those emotions strong?

  4.Do you have useful client data base and does it need your current needs?

  5.Do your best clients bring new clients and how you measure this?