Strategic Marketing and Business Development Flashcards
Key customer question
“Why should I do business with your bank rather than competitors”
What is “sustainable competitive advantage”
- Strategies that position the bank
- Superior, long term profitability
- In spite of external factors
Key fundamental customer question
“How will your bank help/me achieve my financial goals?”
Bank customer dissatisfaction level with banks
39%
Market Structure Variables
- Differentiation
2. Profits
Competitive advantage will lead to _________?
Superior Profits
Profit impact of Quality/Differentiation (Q/D) Strategies
Low or High price with high quality best performers
Medium/Medium worst performers
Impact of high relative quality?
2X performance
Who performs better high price or medium priced banks
High priced by 50%
Competitive structure variables
- Relative perceived quality
2. Profits
Competitive Advantage Strategies
Best
Worst
Best Broad Market, Low Cost or Narrow market and differentiation
Worst middle
American Consumer Index highest score received by
Credit Unions 87%
Bank Attrition Rates equal
Overall 14%
Source ABA
Bank customer attrition rates first 5 years minimum
15%
Customer Service Keys
- Listen
- Respond
- Do responses work
Reason banks lose customers
Service Quality
Wall Street Journal estimates banks spend ___ times more on customer acquisition than customer satisfaction
Answer six to twelve times
Banks spend ___times more to acquire a new customer than to retain or cross sell a current one
Answer 5 times
Banks spend ___% of their service time preventing or eliminating problems and ___% of their time addressing them
Answer 5% and 95%
Decreasing customer loss ratio by ___% for bank customers results in ___% increase in profits
Answer 5% and 85%
Factors customers use to evaluate quality
Responsiveness Assurance Tangibles Empathy RATE
What does ERA stand for
Factors customers use to evaluate quality
Empathy
Responsiveness
Assurance
Mobile banking is growing at ___% and is expected to hit 96.1 million users by _______
Growing 30% per year
2016
The percent of consumers concerned about security of Mobile Banking is ____%
70%
Percentage of customers currently using a PFM
27%
Over ____% consumers think the PFM/ enhances the value of the On Line Banking site and indicate that they are very satisfied or somewhat satisfied
over 90%
Factors Customers use to evaluate quality
Empathy - aspects
Access
Communication
Understanding the Customer
How much of the advertising expenditures do banks spend on newspapers and radio
40%
How much do banks spend on Internet advertising
less than 5%
What are the key website category ranking criteria?
Functionality
Ease of Use
Privacy and Security
Quality and availability
What is the relative value of perceived quality
2X value
What percentage of consumers trust peer recommendations
90%
Social media is about ______
Relationships
What percentage of time online do consumers spend on social media
43%
Why should a bank have a social presence
Affordable marketing Enhances brand Builds credibility with target markets Increase traffic to website Engages customers Survival
Performance = ____________
Promises
What is single biggest reason customers leave banks
Service Quality Dissatisfaction (68%)
