26 November 2014

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Sanat Rao - Infosys Technologies Ltd

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Checklist Item 3: Hold on to your customers!

23 February 2010  |  3264 views  |  1

The longer a customer stays with a bank, the less it costs to retain him. In a recent study of banking customers, average product ownership and profitability was found to be 20% higher among those who thought favourably of their bank. I can cite many figures, but the point is made – there is a huge incentive for banks to retain and sustain customers.

So, how can innovation play an enabling role towards realising this objective? While innovation of products or services is important, with most banks going down the same path, it offers little competitive differentiation, which is so crucial to retention. However, if a bank can anticipate unstated customer needs and fulfil them with imaginative products and services, their customers will enjoy an experience that will be hard to beat.

Sustaining strategies must become equally innovative. For instance, relationships need not be defined by their present value alone – a metric such as “Customer Lifetime Value” can be used to assess the total business potential of customers over their lifetime. Banks can go on to mine this opportunity through innovative loyalty strategies that reward customers based not just on the size of their business, but factors such as channel preference and advocacy. This way banks can show customers that they value the entire relationship and not just the business.

Banks must continuously refine their understanding of loyal customers’ expectations through finer segmentation and fulfil them through right-selling. If they’ve remained with their bank over the years, does that not count for something?


Also read:
Checklist Item 1: Let customer interest drive innovation
Checklist Item 2: Focus innovatively on each customer

TagsOnline bankingRetail banking

Comments: (1)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 24 February, 2010, 12:50

Your point about the opportunity available to banks to bolster customer advocacy and retention by building products that meet unstated customer requirements is very valid. Another low hanging fruit is to combine security and convenience of everyday banking tasks using frictionless online interaction solutions. As I'd pointed out in a recent blog post, HSBC has strongly differentiated itself with its recent declaration that  security does not have to come at the cost of convenience, which was accompanied by a new security feature. 

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name

Sanat Rao

job title

VP & Head Worldwide Biz. Dev & Alliances

company name

Infosys Technologies Ltd

member since

2009

location

London

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I spearhead worldwide business development, strategic alliances and analyst relations initiatives...

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