Unit 4 Topic 8 Flashcards
What are the three key marketing questions for financial providers?
1) What attracts customers? 2) How can providers retain customers? 3) How can they satisfy customers?
Why is customer experience crucial in financial services?
It determines whether customers stay with a provider or switch to a competitor.
What are the ‘7Ps’ of the marketing mix in financial services?
Product, Price, Promotion, Place, People, Process, and Physical Evidence.
How does product variety help attract customers?
Offering different products tailored to different customer needs increases market reach and satisfaction.
How is the price of a financial product determined?
It depends on the cost of provision, demand, competitor pricing, and the provider’s brand image.
Why do banks offer different current accounts?
To cater to different customer segments, such as basic accounts for general users and premium accounts for high-income customers.
What are the two main types of financial advertising?
Informative advertising (educating customers) and persuasive advertising (encouraging brand selection).
How does branding influence customer loyalty?
Strong branding builds trust and encourages long-term relationships with customers.
What are the main distribution channels for financial services?
Branches, online banking, mobile banking, and telephone banking.
Why have banks reduced the number of physical branches?
To cut costs and shift towards cheaper digital channels.
Why is good customer service important in financial services?
It improves customer retention and reduces complaints.
What role do complaints play in customer retention?
High complaint rates indicate service issues, leading to loss of trust and customer switching.
What is a ‘loss leader’ in financial services?
A product offered at a low or no profit to attract customers who may later purchase other profitable products.
How do loyalty products help retain customers?
They offer exclusive benefits to long-term customers, discouraging them from switching providers.
How can financial providers build a good reputation through ethics?
By engaging in corporate social responsibility (CSR) and avoiding investments in harmful industries.
What is an example of an ethical banking policy?
The Co-operative Bank avoids financing industries that use child labor or produce weapons.
What is the difference between transactional selling and relationship marketing?
Transactional selling focuses on short-term sales, while relationship marketing builds long-term customer trust and loyalty.
Why is relationship marketing considered more sustainable?
It encourages repeat business and reduces the cost of acquiring new customers.
