The document discusses strategies for financial institutions to gain customer loyalty. It notes that customers are more loyal when banks have limited fees, convenient locations and services, and easy account opening. The opportunity section examines how banks currently compete for customers through promotions. Maintaining strong customer relationships and understanding what customers value are key to success. A strategic option is to build trust in the brand by focusing on customer satisfaction. Benefits include cross-selling opportunities, while risks involve not conveying loyalty benefits or poorly handling complaints. The conclusion recommends human interaction and investing in the right customers to increase loyalty.

1. Katie Melone
GEB 3213
July 5, 2014

2. Overview
 Financial institutions have been competing with each other
to maintain customers and appeal new ones. Institutions
have created memorable commercials, used promotional
coupons through the mail, and have used cold call sales to
reach out to existing and new customers to convince them
that their institution is more beneficial than its competitors.
 In some ways, these tactics have been beneficial and some
have not been. Banks and credit unions differ in their own
ways, and have different characteristics that appeal to
particular audiences.
 In order to gain loyalty, institutions need to find out what
customers dislike and how to change them.

3. Introduction
In 2013, research was conducted by Research Now and
GMI on the subject of customer loyalty in retail banking. This
research sheds light on how loyalty in retail banks is being used
to improve business economics. Within the 27 countries
surveyed, an average rate of 3% of developed markets and 6%
of developing ones gained new customer relationships,
customers switching their primary bank to a different institution
or those who are new to the banking world. The research found
that a customer is more likely to maintain their loyalty if their
bank’s fees are limited, how convenient the bank is as far as
location and their internet and mobile capabilities, and the ease
of opening accounts whether at the branch or online (Brief,
2013).

4. Opportunity
The Current Situation
Currently, financial institutions are competing among each
other to keep their customers and trying to find ways to
attract new ones. The marketing departments have been
finding new incentives to maintain and gain customer loyalty.
Television, radio and mail brochures are broadcasted or sent
to current and non-customers that include a bonus cash-
back incentive to open a new checking account.

5. Opportunity cont.
Key Success Factors
“The ability to build and maintain strong relationships with
customers has always been a key success factor in retail
banking” (Herbert, K.). However, the complexity of customer
interactions and relationships between banks and their
clients has increased due to the increase in usage of online
technology with online banking, convenience of contact
centers and other channels such as mobile banking.

6. Opportunity cont.
Analysis of Alternatives
In order to keep customers interested, banks need to make
products that pop, or stand out from the rest. The key idea is
to understand the features customers value the most. Fees,
rates, ease of transactions, rewards, and quality of advice
are all features customers look for when researching
banking solutions.

7. Opportunity cont.
Strategic Option
A good strategy banks can use is to build trust with
customers. If a bank’s brand is successful and are able to
restore their image, they can begin to build trust. By
promoting the institution as friendly, convenient, and service
oriented, there is a greater chance for customer loyalty.
Having a customer-led, not market–led perspective,
managers are able to focus more on customer satisfaction
and improve the image of the brand.

8. Benefits and Risks of
Strategic Option
Benefits
Some benefits from gaining a higher percentage of customer
loyalty are as follows:
○ The opportunity to cross-sell products and services;
customers will be more receptive to new products.
○ Some institutions reward loyalty depending on how many
years they have been with the bank.

9. Benefits and Risks of
Strategic Option cont.
Risks
Some risks involve not being able to convey to customers
the benefits of being a long term customer of the institution.
If institutions are not able to maintain customers,
stockholders and shareholders will be at a loss. If complaints
begin to increase and they are not handled well, profits could
be at risk (Linnell, 2014).

10. Final Recommendations/
Call to Action
“Further research shows that consumers are begging for a
conversation with a real person more than ever. In a world filled
with tweets, status updates and text messages, it is ironic that
consumers, particularly young consumers, seek human
interaction as part of their shopping experience” (Compeau,
2011).
Creating a need for a product or service is also very beneficial
while investing in the right customers for one’s business also
increases the chances of customer loyalty.

11. Highlighted References
 Adams, M. (2014, April 4). Three Ways to Build Customer Trust. Retrieved July 2, 2014, from
http://www.forbes.com/sites/yec/2014/04/22/three-ways-to-build-customer-trust/
 Brief, B. (2013, November 6). Customer Loyalty in Retail Banking: Global Edition 2013. Retrieved
June 27, 2014, from http://www.bain.com/publications/articles/customer-loyalty-in-retail-banking-
2013.aspx
 Global Banking Survey 2012. (2012, January 1). Retrieved July 2, 2014, from
http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-Consumer-
Banking-Survey-2012--Offer-choice-and-flexibility
 Herbert, K. (n.d.). Achieve Unsurpassed Loyalty in Retail Banking. Retrieved June 27, 2014, from
http://www.frost.com/prod/servlet/ebroadcast.pag?eventid=97956418
 Linnell, P. (n.d.). Retail banking: Customer retention at risk as expectations rise. Retrieved June 28,
2014, from http://www.ctmaworld.com/Blog/BankingExpectationsRise.htm
 Lowenstein, M. (2003, August 1). Linking employee loyalty with customer loyalty. Retrieved July 2,
2014, from http://www.thewisemarketer.com/features/read.asp?id=27
 Plozay, M. (2011, January 1). Trends and Opportunities in Financial Institution Loyalty. Retrieved
June 11, 2014, from http://files.firstdata.com/downloads/thought-leadership/FI_Loyalty_WP.pdf
 Schwab, S. (2004, July 1). How Financial Services Loyalty Tactics Must Change. Retrieved June 11,
2014, from http://www.thewisemarketer.com/features/read.asp?id=50
 Ten Tips to Build Customer Loyalty. (2014, January 1). Retrieved June 11, 2014, from
http://www.allbusiness.com/building-customer-loyalty/16675686-1.html

12. Slideshare.net Link