The document discusses strategies for financial institutions to gain customer loyalty. It notes that institutions currently use promotions, advertisements, and sales calls to attract customers. Research found that customers are more loyal if fees are limited and the bank is convenient and easy to use online/mobile. The document recommends that institutions build trust with customers by focusing on customer satisfaction, being friendly and convenient, and having a customer-led perspective to improve their brand image and loyalty. Risks of not retaining customers include losing profits and shareholders.

1. Katie Melone
GEB 3213

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, there was research 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
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

11. Highlighted References
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
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
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