Kamal Kalra
Customer Relationship
Management & Marketing
Diffrentiation Strategies
All PSU /Private and Foreign Banks are offering
Anywhere banking /ATM on a shared network etc
The need is to build a strong brand and sustainable
competitive advantage by using
A leverageable advantage that can be used as a springboard
to new advantages. This has to be a continuous process
Companies have to deliver what the customer wants
The company has to follow a SIPOC system in reverse to
meet customer needs
Marketing in Retail
Banking
Largely driven by number of customers a Bank
possesses
Greater number will mean more profitability /strength of
model
Deryk Vander Weyer has the following proactive strategy
:
1. Identify most profitable markets
2.Assess present and future needs of the customer
3.Set business development goals to meet them
4.Adapt to changing environment in market place
Ultimately a business strives to attain business objective
of growth and profit
7 Ps of Marketing Mix in
Retail Banking
The 7 Ps of Marketing Mix are:
1. Product: A bank product is anything which provides satisfaction
desired by the Customer eg Deposit accounts , Loans and Services
2. Price: Price refers to the transaction cost the customer has to bear
eg. In the case of a loan the interest and the arrangement fee are the
costs to be borne by customer
3. Promotion Efforts of the Bank to reach the customer eg. Ads Promos
etc
4.Place: Refers to where the product is being offered .
5.People: Despite the use of technology people are indispensable to
the process. Retail Banking being delivery of services depends on
People
6.Process: Processes are crucial & need to be optimised to deliver
results
7.Physical Evidence: refers to tangibility to be attached to banking
services eg. Clean and well functioning ATMs/ Branch premises,
customised cheque books, immediate attention etc.
Customer Adoption
Process
Adoption is a customers decision to become a
regular user & is followed by loyalty.
New product suppliers aim to rope in early adopters
use theories of innovation diffusion which is
spread of a new idea from source to end user
Adoption follows the steps: Awareness-InterestEvaluation-Trial-Adoption
Banks have to adopt the same process when they
launch innovative products
Retention Dynamics
Acquiring new customers can cost 5 times more
than retention of an existing customer
The average company loses 10% of its
customers annually
Profit rates tend to increase over life of a
retained customer
Customers move up thru a marketing funnel
Target Market-Aware-Open to trial-Trier-Recent
user (once/3months)-Regular-often-Loyal
Customer Databases
It is use of customer information in an upto date
database for acquisition and retention
Eg Novartis keeping data on 100000 farmers in
Argentina to know their pesticide purchases groups
them by value and treats them accordingly
(segmentation approach)
Database contains a wealth of info about the
customer his preferences and spending habits and
risk from competition etc.
Data Warehouses and
Data Mining
All contacts with customer used to add to DB
Tele marketeers respond to customers based on a
comprehensive info stored in DW
Eg Tesco did not stop a low selling bread as it was
the reason for visits by a wealthy group
DM uses maths & stats to extract and analyse useful
information of customers, trends/ seg
Eg Royal Caribbean cruises filling seats, Mars candy,
petfood Amex precisely targetted offers in mailing of
bills to 35m card holders
Downside of DB
marketing & CRM
5 main problems can prevent some companies
from effectively using CRM:
1. Some situations not conducive to DB mgmt
when cost of sale low eg candy / piano sale
2. HW/SW cost , comm links, staff cost etc. high
3. Difficult to get all in company to be customer
centric & use information available
4. Customers may feel privacy has been invaded
5. Assumptions behind CRM may not hold good
Steps in the
Segmentation Process
1.
2.
3.
4.
5.
6.
7.
Group Customers based on similar needs
How demographics are distinct for groups
Decide overall attractiveness of segments
Determine Segment Profitability
Segment positioning on Product-price
Create Segment test to check attractiveness
Marketing Mix strategy 4 Ps to include
Product, Price, Promotion and Place
HSBC the Worlds Local
Bank & Different Values
The second largest Bank in the world with 9500
branches/100m customers has started a marketing
drive showing how it works as a Local Bank
Worlds Local Bank US businessman after a hole in
one has to buy expensive gifts for playing partners and
not a round of drinks. Discounts on cards other
freebies
Different Values Shows three photos of beauty
pageant winner, man on moon and boy tying shoelaces:
The more you look at the world the more you realise
what matters to people
Achieving excellence in
Services Marketing
External: Normal work of product /promotion
Internal: training & motivating employees
Interactive: serving customer
Charles Schwab largest discount brokerage
house in the US ; services 8 m customers
Resolves all customer issues daily. US Airways
improved services by handheld scanners to
reduce mishandling of baggage by 50%.
The power of analytics
We know the power of the killer Apps which can transform the
way business is conducted. Corporates know through analytics
a great deal about customers and their needs as well as how
they can be met. Analytics can tell you:
- Needs of the customer
-what they will pay for the product
-how many will they buy in their lifetime
-what triggers people to buy a product
-how salary can be related to performance
-how to keep inventories low and performance high
Employees work to a strategy championed by the top mgmt.
Capital One thru IT has increased its growth 20% every year
Analytics
In sports its not steroids but analytics behind growth of Boston Reds
Top of the list of Analytics users is Mariott Hotel chain which has
perfected over 20 yrs providing optimal prices for its guest rooms
Capital One tries 30 k experiments/yr with intt rates and incentives to
maximise growth of customers who will repay card dues.
Progressive use similar experiments for Insurance when they analyse
high risk policies which other companies do not touch eg they may take
college grads above 30 with a certain credit score or above, no
accidents and sets prices based on analytics which will make business
profitable and tests results with financial simulation
Different Excel spreadsheets floating around in a corporate means
potential errors. A centralised DB gives consistency of data /analytics
Some apply same approach to people eg Proctor & Gamble an
interesting quote from an analyst- In God we trust all others bring data
Expertise in various
corporates
Function
Corporate
Supply Chain
Description
Optimise SC,
Dell Wal Mart
reduce inventory
Amazon
Customer
Identify most
Capital One,
Loyalty
profitable & retain
Barclays
Pricing
Price to maximise
Progressive, Marott
Profit
Human Capital Select best man for job
Boston Red Sox
Product & service Detect quality defects Honda
Intel
early
R&D
Improve quality/ Safety Novartis,
Amazon
Strategy
Marketing has been difficult to quantify being rooted in psychology
Now a multi attribute utilility theory and advertising is using
econometrics a stat tool for measuring impact of different
advertisements
Corporates like P&G, Gallos (wines), Wal Mart use customers to
help them in preventing stock outs by sharing data in joint
initiatives , reducing costs etc
As a strategy you therefore need the right people and the right
technology
Thank
you
