Do you want to know more about customer relationship management practices in banking industry? If so, this article is worth reading for you. Read on to learn more.
Customer Relationship Management Practices in Banking Industry
Understanding the relationship between companies and customers is very important. This information can also help managers to know the customers’ behavior. It also helps them to know their needs. By knowing these things, a company can improve its services to attract more and more customers.
Customer relationship management (CRM) is an approach to managing the relationship between a company and its customers. Thus, CRM is a very important area that gets attention from businesses all over the world. Banking industries are no exception.
In the banking industry, customer relationship management is done in two ways:
1) Relationship marketing
2) Customer service
Relationship marketing is used to increase the number of loyal customers by developing a relationship with them. It allows financial institutions to identify opportunities for long-term relationships with their customers, even if they are not profitable at that time. Relationship marketing also allows an institution to anticipate and meet customers’ needs in advance and ultimately develop a long-lasting relationship with him/them.
Relationship marketing enhances customer retention while increasing average net assets per customer account through cross-selling products, maximizing loan balances, reducing costs, and minimizing bad debts, non-performing loans, and delinquencies. Also, relationship marketing helps financial institutions discover new products or services that will satisfy their current and prospective customers’ needs or wants by using data mining techniques. The data mining tools help them identify patterns or trends that would be useful for increasing revenues, improving profitability, or reducing costs.
Customer service refers to how well a company can solve the problems of its customers to maximize their satisfaction and minimize their dissatisfaction. The level of customer satisfaction shows how a company performs in providing excellent services to its customers. Through good customer services, financial institutions can establish long-lasting relationships with their customers to gain more profit opportunities in the future by increasing their assets base.
Customer service is the process of handling complaints from clients effectively and efficiently so as not to jeopardize business relations with existing or potential clients. Good customer service provides high levels of motivation for existing customers as well as for potential clients for future business transactions.
Customer service includes:
- Responding promptly
- Giving clear explanations
- Being courteous
- Solving problems quickly
- Resolving complaints completely
- Offering superior products and services
- Giving value for the money
- Offering convenient hours
- Providing easy access
- Encouraging suggestions
- Contributing to community development
Customer service is a vital area that needs attention in the banking industry because it is one of the most important aspects of business operations. The quality of services provided to customers can either make or break the company. Hence, financial institutions must improve their customer service to gain more profit opportunities by increasing their assets base.
In summary, relationship marketing and customer service are two different approaches used by financial institutions to manage their relationship with customers. Relationship marketing aims to increase the number of loyal customers while customer service helps financial institutions to provide excellent services to their customers to gain more profit opportunities in the future by increasing their assets base.