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Journal Of Consumer Marketing

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Strategic customer relations in banks are very vital especially when banks need to keep customers satisfied to bank with them. In the recent past banks have embarked on customer relations so as to get more customers into their banks. This is because they want to win market share (to have a large market share). The key to improving on profits is to get more clients, win the market share, keep the existing customers by making them to be loyal and then benefits will definitely increase by day. However, customer’s loyalty and large market shares do not bring in profits to the banks always and this need to be checked thoroughly. For example, we have prestigious customers who are on their segments. Banks have divided customers into segments, which have customers who have similar needs and are worth broadly in the same economic value. Under these propositions, we have the prestige proposition. Non prestige customers have large amounts of money invested in banks but they do not always bring in profits because they have large costs which are associated with them because they need personalized banking, they also need special attention and on the other hand they might demand special services which are additional costs to the bank. So for the past years, companies have decided to embark on customer relationship marketing in retail banking because they have realized that service and value are intrinsically linked and the way you handle a small customer means a lot and this is how the bank will get more and more clients. Banks have tried to differentiate themselves for competitors through providing better customer service. Consistent delivery of superior service requires the careful design and execution of a whole system of activities that include people, technology and good processes. This will lead to more revenue from customers who will be impressed with services provided. To do this, banks embarked on creating a marketing customer information file or database where reports on customers can be sought through monthly statements. After this, they enhanced on computing the customer’s profitability. This is the analysis of the value bought in by the customer against the cost of running the type of product that customer owns. So each customers cost and revenue is known to measure whether the customer is a loyal customer who has no profits to the bank or whether he is a long-term profitable customer who needs nurturing so that the bank can give the customer the nurturing he deserves. They should also need to know about short-term customers who need to be exploited before they pull out.

Banks have also embarked on segmentation of their customers into different value propositions according to the profitability of customers. This is when the 80-20% profit generation against customers arises from. Banks customer segments have people with similar needs and worth broadly in the same economic value, earn almost similar income etc. They are given a combination of services, products, prices and branding which fit them. This is called managing customers according to segments. Banks also compute the lifetime value or profitability of customers through forecasting and use of strategies like introducing new products that will fit the customers in future. Banks can also modify existing products to fit customers in a particular way hence making them satisfied and this will lead to increased revenue.

Journal Of Consumer Marketing

This kind of information is very valuable, and that's why direct mail websites want you to pay for targeted lists such as the one detailed above. But, what most people don't realize is that simply obtaining the number of people in a given area who fit a certain criteria is also extremely valuable, whether you choose to purchase their contact information or not.

In order to sell you a list, direct mail sites have to tell you the number of leads that will be included on that list. This means these sites can act, in essence, as a free online resource for savvy entrepreneurs looking to size their target market.

There are many ways that sizing a target market can help entrepreneurs make informed business decisions, some of which have been discussed in previous Jane out of the Box articles. This article will focus specifically on how to use information obtainable from direct mail sites such as InfoUSA and MelissaData to minimize risk in terms of new ventures and expansion.

Say you're contemplating starting a new business. You have a concept for an upscale climbing gym in a town where you know there's no shortage of rock-climbing and fitness enthusiasts—but do enough of them make enough money to afford your proposed membership rates? You might want to check out the stats on one of the direct mail sites listed above, under the heading of Consumer Lists, creating a list based on household income $50,000+ and using 'health/diet/fitness' as a category under a tab that represents Hobbies and Interests/Lifestyle Indicators. When you visit MelissaData, for instance, you will find a "Lookup" tab, including a myriad of free lookups to represent certain data, perhaps even the specific target you are seeking. The number you get will give you a good idea of whether there are enough people in your target demographic to get your new business off the ground.

Or, say you own a pet-grooming business with a solid clientele, but have seen flat profits over the last few years. Your customers are always asking you if you know of a good all-natural dog biscuit, so you've considered expanding your business by creating your own dog treats, in-house. You've even had the idea of selling them at other local businesses around town.

Before you sink the time and resources into developing this new business venture, you might want to use InfoUSA to discover how many people in your area have Hobbies and Interests in both 'health/diet/fitness' and 'pets/animals.' After all, this is your target market. Most other pet-owners will just continue to purchase their dog-biscuits at the grocery store.

When you find your results, ask yourself: Is this potential market big enough to justify the funds I would need to float this new business venture? (It makes sense to find out before you move forward—especially if funds are already somewhat tight.)

Let's say you own a nightclub that's doing well in a certain metropolitan area, and you're looking to expand. Before you make a decision on where to locate your next club, it would probably make sense to do a basic demographic search on singles between the ages of 21 and 40 in each of the areas you're considering. The answers you get may confirm your intuition, and they may not. Either way, you'll have the information you need to move forward with seeking the right location to support the people in a given demographic to make your next nightclub equally successful as your first.

There are many more ways you can use direct mail searches to determine the size of your potential market. Once you become familiar with search parameters on each site and put them to work in whatever way best serves your needs, you can continue putting that information to use in making key business decisions.

And, if the time comes when you want to move forward with direct marking to your target demographic, either via phone or direct mail, go ahead and purchase that list from the direct mail site of your choice. It's a great way to thank them for providing such great information, free of charge!

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Both Robert Smith & Michele Dekinder-smith are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Robert Smith has sinced written about articles on various topics from Shopping, Careers and Job Hunting and Medicine. Robert Smith has spent more than 15 years working as a professor at New York University. He is interested in assisting students and people who need assistance in writing. Now he spends most of his time with his family and shares his Univesity experience i. Robert Smith's top article generates over 49500 views. to your Favourites.

Michele Dekinder-smith has sinced written about articles on various topics from Marketing. . Michele Dekinder-smith's top article generates over 1600 views. to your Favourites.

Capability And Maturity Model
Key Practices The key practices describe the elements of infrastructure and practice that contribute most effectively to the implementation and institutionalization of the key process areas.