This document summarizes a presentation made by Group No. 07 on enhancing customer retention at LB Finance PLC. LB Finance is a top finance company in Sri Lanka with over 48 years of operations and 163 branches. However, its average customer retention rate for 2018-2019 was only 46.8%, meaning 53.2% of customers churn each year. To address this, the group evaluated factors affecting customer retention based on a sample of dissatisfied customers. They found the primary issues were related to customer service (36%), financial benefits (27.33%) and customer convenience (5.33%). Recommendations included training customer service staff, implementing online services and loyalty programs, and improving branch infrastructure and convenience.

1. Presented by Group No -07
Enhancing Customer Retention Of
LB Finance PLC

2. LB Finance PLC
• Incorporated in May 1971
• Strong Financial tradition of
over 48 Years
• 1 of the Top 3 finance company
• over 163 Branches
• 6 Branches In Myanmar
• More than 3400 employees

3. LB Finance PLC
• No 1 Profit company
• A- Fitch Ratings
• Won the Peoples award for Financial
Service Provider SLIM 2019
Won Gold Award For Annual Report
2018 by CA Sri Lanka

4. • There are 80 Licensed banking and Non Banking
institutions in Sri Lanka.
• Modern day customers became intelligent and skillful with
the technology improvements.
• Therefore customers have 79 other options to finance.
• Probability of getting a new customer is 1/80.

5. • LB Finance PLC has an active customer base of 141,824
leasing customers [as at 31/03/2019].
• LB Finance PLC average customer retention rate for 2018-
2019 financial year is 46.8%.
• Therefore we have noticed that 53.2% of customer churn
rate.
• Hence we came up with innovative business strategies to
decrease the above mentioned significant rate of 53.2%
customer churn rate.

6. What is Customer Retention? (CR)
Customer Retention means "to maintain existing customers.”
This happens if there exists a positive relationship between the company and
the customer.
Loyal customers consume more.
They are less price sensitive and pay less attention to
competitive advertising.
Servicing existing customers is cheaper.
Loyal customers spread positive word of mouth.

7. • To identify innovating solutions to increase Leasing customer retention in the present
challenging economy status of the country.
• To study the factors that affecting on repeat business of LB Finance PLC.
• To identify the key elements that can increase the customer satisfaction as it is a
major part of customer retention.
• Method to increase Cross selling opportunities through the Leasing customer base for
other products of LB Finance PLC.
Objectives

8. Customer Retention Rate for the past six months.
Total Return Business
Settlements within 4 months
November 3169 1457
December 2854 1399
January 2822 1186
February 2423 1066
March 2961 1391
April 2741 1398
Total 16970 7897
47%
Month
Average

9. Repeat Business [ Average 46.8%]
1 month [35%]
2 months [45%]
4 months [5%]
3 months [15%]

10. Evaluation based on the dissatisfied 53% customers
• Selected a sample of 300 customers [ 50 customers from each month] within the time
period of 01 November 2018- 30 April 2019.
• Only the following branches were considered for the evaluation.
• Head Office [ Colombo 07]
• Galle
• Kandy
• Anuradhapura

11. Credit Recovery
Department Department
Customers with positive feedback &
still not considered to obtain a new facility
Issues
Customer Service related Issues
* Delaying the Finance facility 21
* Higher rental than expected 11
* Issues in Insurance payment 12
* Improper manner of communication when
collecting the arrears
* Below standard service provided when
settling the facility
* Other issues 6
Financial Benefit related Issues
* Higher Interest rates 51
* Low rebate rates for early settlement of
facility
31
Customer convenient related Issues
* Limited repayment options 8
* Limited parking spaces at office premises 6
* Long ques at cashier points 2
Total 83 70 31 115
39
19
Description Documentation Other
93
Factors affecting Customer Retention

12. Customer
Service
Factors
affecting
Repeat
Businesses
Customer
Convenience
Financial
benefits

13. Issues Affecting Ratio (%)
Customer Service related issues (CS) 36
Financial Benefit related issues (FB) 27.33
Customer Convenience related issues
(CC)
5.33
Results of the Evaluation

14. Customer Service Related Issues
1. Delaying the Finance facility 19.44%
Once a customer settled the facility getting the Certificate of Registration at the earliest is his primary
requirement.
2.Higher Rental than expected 10.18%
This complaint is regarding the rental which customer expected was lower than actual rental.
3.Issues in Insurance payment 11.11%
Customers are expecting a reminder for the Insurance payment as some of our Documentation staff has
failed to communicate with the customer.
4.Improper manner of communication when collecting the arrears 36.11%
This complaint is regarding the improper manner of communication when collecting the arrears.
5. Below standard service provided when settling the facility 17.59%
Once a customer settled the facility getting the Certificate of Registration at the earliest is his primary
requirement.

15. Financial Benefit Related Issues
1. Higher Interest Rates 62.19%
To survive in the market we should always maintain an average interest rates which can attract the
customer with comparing to our competitors.
2. Low Rebate rates for early settlement of facility 31.81%
In an event of a early settlement of the facility, customer expecting a higher rebate rate for the
termination.
Customer Convenience Related issues
Although LB Finance PLC include branch network of 163, customers still prefers the Electronic
transaction methods and seek more value to the time.

16. Recommendations
Recommendations to Customer Service related Issues
• Special training sessions to be conduct to each department separately.
• Introducing incentive schemes to Employees and branches, which achieve the best customer service ratio.
• As the growth of Technology, a computerized Leasing approval system can be implemented to speed up the
credit approval procedure.
• Prior reminder for the Insurance debits can be inform to customer through a automated SMS. This will
minimize the communication issues .
• A system to get continuous customer feedback from the point of sale to the settlement.
• Special training sessions can be arranged to supportive staff such as Security guards, Cleaning staff &
other minor staff.

17. Recommendations to Financial Benefit related issues
Loyalty Card Holder
Special Low rates for a Special Rebate rates for
repeat business Existing & new Facilities

18. Cross selling opportunities
Product Benefit to customer
Fixed Deposit Higher Interest Rate for Fixed Deposits
Savings Higher Interest Rate for Savings accounts
Gold Loan Lower Monthly interest for pawning transaction

19. Recommendations to Customer Convenience related Issues
• Online Transaction App
• Cash deposit machines (CDM) should be implemented to all branches
• Branches should be transferred into Module branches
 Pleasant Environment
 Easy Access ways
 More spacious parking spaces

20. QUESTIONS?

22. THANK YOU!