Here are the rules: Draw a line to connect one to one, two to two, and three to three. You cannot cross lines You cannot leave the confines of the large rectangle You cannot pass through the small squares This is designed for 13 year old children who can accomplish it in 15 seconds. Conclusions: directions for self-service must be explicit or they confuse customers because customers have preconceived notions of how things should work.
Regardless of the method used or targeted sub-segment, what retail banks are discovering is that each financial services product offering must have a clear value proposition and a direct appeal to a specific targeted group and an indirect appeal to other groups. The indirect appeal can be used to link products and services together and offer product bundles that appeal across marker sub-segment, such as loyalty schemes. The key is that value propositions are relative to the customer's perception of value and must be deliberately match to products. Moreover, the value proposition may wax and wane due to changes in a customer's attitude, lifestage, and lifestyle. When a value proposition begins to wane, it presents, for a limited time, an opportunity for the retail bank to offer another product that have a greater appeal based on past customer behaviours.
Consumer behaviour is the result of a complex interaction in which many factors most of which will vary from customer to customer and will dynamically change over time due to the factors such as fashion, social conditions, and other influencing forces. There are very few absolute rules to behaviour that is repeatedly influenced by new ideas, approaches, and products that are continually adopted. For retail banks is means that the formula for market segmentation and the alignment of products to customer behaviours is a dynamically occurring process and must be re-evaluated periodically to insure the highest yield per banking product. Oddly, few banks map their customer behaviours to their product offerings.
Tracey and Wiersema’s value disciplines provides a convenient framework for thinking about how the organization reacts to market conditions as it grows and matures. Knowing which value discipline is the current focus of your organization is the essential to establishing a growth agenda.
Technology plays a key role in reshaping the products and services that banks provide to customers. In past decades, access to technology was the primary market differentiator for many institutes as larger banks with more capital to spend on technology set themselves apart from smaller institutions. This is no longer true as the cost of entry into the market for financial services has drop substantially, paving the way for numerous new non-bank providers of financial services. The future of banking is understanding which technologies bring the most value to the various customer segments you have targeted. Market differentiation is derived from the ability to rapidly deploy technology and the level of satisfaction provided to customers. Remember satisfied customers rarely change banks because of delivery technologies, unless the technology is perceived as providing additional value to the relationship.