Retaining customers in traditional retail financial services: interviewing 'les responsables'

This paper explores organizational concerns with retaining customers in traditional retailing of financial services. Managers, charged with retaining customers ('les responsables') in banks and building societies, are interviewed seeking their views on how their organizations retain customers. The study finds that there are a number of shared themes in the sample of informants, which are evolution/flux, customer information systems, a product/sales orientation, delivering financial services, staff and relationships with customers. Underlying these themes, however, appears some equivocation as these organizations try to retain customers when customer acquisition seems to be the thrust of their marketing.     

Comparing perceived insecurity among customers and retail staff during service encounters

The study compares perceived insecurity by customers and retail staff during service encounters. The topic is important, because retailers invest millions of dollars in security. The framework of the study divides perceived insecurity into financial, physical, psychosocial and time-related insecurity. A total of 39 consumers participated in seven focus group discussions, and 34 retail staff members responded semi-structured interviews. The study confirms that from both customer and staff perspectives a high quality service encounter has an influence on perceived insecurity, and it diminishes disturbance and criminal activity. However, there are differences between customer and staff perspectives in many areas.     

How to retain customers in omnichannel retailing: Considering the roles of brand experience and purchase behavior

The opportunities and challenges of omnichannel in retail industry have been widely discussed, yet despite these benefits, the key elements that constitute an effective omnichannel and how customers respond to omnichannel retailing strategies remain unclear. This research conducted online surveys to test the effects of omnichannel elements on various brand experiences and customer retention, considering the moderating role of purchase behavior. The results indicate that omnichannel elements (integration, individualization, and interaction) are generally helpful in retaining customers, through omnichannel elements influence brand experiences differently. In addition, these omnichannel elements have different influences on customer retention due to different purchase behaviors. The findings suggest that retailers can use different omnichannel strategies to attract customers’ purchases and provide insights for practitioners who want to use omnichannel strategies to deliver superior experiences for customers.     

How managers in the financial services industry ensure financial performance

With the wide prevalence of the balanced scorecard, this study develops and empirically tests a model examining the relations between the customer perspective (relationship bonding tactics, perceived relationship investment, customer satisfaction, trust, commitment and customer behavioural loyalty) and the financial perspective (financial performance). A cross-departmental study in the financial services industry was conducted based on three consumer samples (department of Loans, Deposits, and Credit Cards) drawn from XYZ bank, one of the most famous banks providing merchant banking services in Taiwan. The results show that the customer perspective does have positively significant effects on financial performance, as proposed by the BSC (Balanced Scorecard) and SPC (Service Profit Chain). In addition, the findings suggest that customers purchase financial services according to their perceived relationship to investment retailers, with corresponding bonding tactics, which results in different levels of customer satisfaction and behavioural sequences, and is important in reinforcing customers' trust, commitment, repurchase intentions and corporate financial performance.     

The impact of customer-specific marketing expenses on customer retention and customer profitability

We study the effects of customer-specific marketing expenses on customer retention and customer profitability in a business-to-business setting. Using data from a company providing hygiene services, we look at the impact of a hitherto unstudied type of expense targeted at individual customer relationships: the offering of free equipment to customers. The data allow tracking the activities performed in more than 4,500 customer relationships over a period of 4 years. Retention rates are higher for customers targeted with free equipment, but this effect results from an interaction with customer size. First-order dynamic panel data analyses show that the impact of targeted marketing expenses on customer dollar profit is positive for large customers, but there is no effect for smaller customers. Thus, targeted marketing expenses seem to be a tool for relationship maintenance rather than customer development: they help in retaining large customers that generate more profit, but they do not seem to work in developing new customers into larger, more profitable ones.     

Benchmarking Services Branding Practices

The results of research into the competitiveness of New Zealand firms that provide professional and other business services suggest that effective branding is a key source of success. Brand strength appears to be linked to four main practices: investing in marketing communications to improve customer awareness and understanding of corporate and product brand values; contributing to the wider community to improve corporate reputation; improving internal communications (internal marketing) so front-line and professional staff are kept better informed about customer needs, market changes and company initiatives, thereby enabling staff to help customers better; and improving service quality to improve market positioning. The paper answers calls for the development of an integrated theory of services branding and concludes by positing three main conditions for effective services strategies and practices.     

Electronic Logistics Service Quality (e‐LSQ): Its Impact on the Customer’s Purchase Satisfaction and Retention

The Internet retailing industry continues to grow rapidly. Several Internet retailers are, however, struggling to retain customers due to the high level of competition among incumbents. We propose that customer satisfaction with the order fulfillment process is an important determinant of overall customer satisfaction with the retailer, as well as with the extent of customer retention enjoyed by the retailer. This paper offers a new concept for electronic logistics service quality and investigates the relationship between the quality of online fulfillment and the ensuing retention of customers, using archival data on 260 online retailers. The structural equation model results indicate that satisfaction with the physical distribution quality and cost are positively related with customer’s purchase satisfaction and customer retention. Additionally, the results indicate that while purchase satisfaction is a strong indicator of customer retention, underlying drivers of purchase satisfaction do not have nearly the same impact on customer retention directly as they have on purchase satisfaction.     

Aesthetic labor and visible diversity: The role in retailing service encounters

This study endeavors to investigate the role of the appearance of customer service staff in forming customer perceptions. It also aims to fill the gap in existing knowledge by exploring the notion of visible diversity, for example, ethnicity, age, gender and perceived sexual orientation of store staff in service encounter from the customers’ perspective. The study adopted a qualitative, inductive approach in data collection using a sample of 30 customers from leading Australian fashion retailers. This study identifies three themes explaining customer perceptions of staff's aesthetic labor, namely mirroring appearance, matching appearance, and charming appearance, which can be explained by the social identity theory, role theory and aesthetic capital. It is found that staff appearance might affect customers’ intention to revisit but does not guarantee sales. In addition, based on signaling theory, the results show that age, ethnicity, gender and perceived sexual orientation of the retail store staff are meaningful factors in determining customers’ attitudes and behavior. This study is one of the first that takes aspects of visible diversity into account along with aesthetic labor and customer experience in a retail setting.     

Brand defection in a business-to-business financial service

This research examines the reasons for brand defection in a business-to-business financial service. Three cross-sectional studies examine customers who ceased using a brand in the previous month. The research shows that about 60% of brand defection occurs for reasons that brand managers cannot influence, such as business closure or head office decisions. Hence, retention strategies can have a maximum success rate of 40%. Furthermore, most defection within this 40% relates to dissatisfaction with fees and charges, or the attractiveness of competitors' offers. These reasons limit what brand managers can do to retain these customers other than just matching competitors' offers. On the other hand, most customers who defect because of price issues or reasons beyond management control still have a positive attitude towards their former brand and are likely to consider this brand for future purchases. Only 4% of lapsed customers defect because of service service-related issues. These customers are less positive about their former brand, compared to other lapsed customers. The research provides implications for investments in customer acquisition versus customer retention.     

Customer Loyalty and Privacy on the Web

ABSTRACT

This study examines from simulation the effects of the privacy sensitivity of customers, the personalization practices or standards of retailers and the difficulty in locating favorable sites on the loyalty of consumers to a Web site. The key finding of the study is that customer privacy sensitivity is a critical success factor that significantly impacts loyalty to a retailer. Customers have higher loyalty to sites that request the least information, while they have lower loyalty to sites that request the most information. Web retailers considering expanded personalization of products or services to customers, through increased personal information, need to rethink their practices. The study also found that difficulty in locating a favorable site is a success factor that impacts retailer loyalty, and that customers have higher loyalty to difficult to locate favorable sites on the Web. These findings are important at a time when consumers are empowered with Web technology to immediately shop competitor sites.     

An integrative framework for customer switching behavior

Due to increased intensity of competition, retention of customers has become a major concern in many service industries. Although researchers have investigated customer switching intention and its influential factors, the complex structural mechanisms that reduce the likelihood of switching intention in the field of financial services, especially in the banking context, have remained understudied. This paper addresses the role of customer satisfaction, customer loyalty, customer trust, and customer perceived value within a new conceptual model for customer switching intention in the banking services. In particular, the paper contributes to examine the potential moderating effect of switching barriers on the relationship between customer loyalty and switching intention as well as the relationship between satisfaction and switching intention of customers in the banking services. Data are collected through a questionnaire survey, and partial least squares-structural equation modeling is used for data analysis. Empirical results confirm the proposed model and hypotheses and show that switching barriers strengthen the impact of both customer loyalty and satisfaction on switching intention. The findings of this research offer a unified view of the structural relationships that contribute to reduced switching intention and provide more in-depth insights into the role of switching barriers in the banking context.     

机场零售业的营销特征分析

机场零售业对机场总体营业额、航空运输业客户满意度有重大意义。与普通零售业不同,机场零售业的客户群按照其行为特征可以分为“情操享受型”、“随机发现型”和“应急需求型”。消费行为的主要诉求是集个性化、舒适性、便利性、尊重感和成就感于一体的。相应的营销组合是,满足客户需求创造客户价值、按创造的客户价值定价、建立多渠道交互性的有效沟通、为顾客提供便利服务,同时兼顾创造性的差异化供给,防止同业竞争者间产品与服务的雷同。     

Customer relationship management in retailing: A content analysis of retail trade journals

The purpose of this research was to increase knowledge and understanding of how retailers use business intelligence and data mining tools to implement customer relationship management (CRM) in retailing. Specific objectives were to (1) identify organization and infrastructure requirements for CRM effectiveness, (2) identify CRM objectives and goals of retail companies, (3) identify data mining tools utilized by retailers to perform CRM functions, and (4) identify CRM strategies used by retail companies. A keyword search within business databases using CRM and CRM identified publications with CRM content. Content analysis was used on articles (N=149) drawn from Stores, Chain Store Age, Harvard Business Review, and Retail Forward over a 5 year period (2000–2005). Selected articles were stored as text files in QDA Miner, a computerized qualitative analysis tool. Key organization/infrastructure needs emerged focusing on data structure, organizational systems, technology structure, and data accessibility. Retailers goals/objectives and strategies focused on marketing, customer service, understanding customers through data analysis and increasing acquisition and retention through customer loyalty programs. Data mining tools identified supported marketing and customer analysis efforts. Findings provide insight into the challenges retailers face as they implement a more customer-centric business strategy.     

Retailer selection compulsion in the subsistence markets

Although enduring relationships between buyers and sellers encourage subsistence market consumers to shop at a particular retailer, these relationships have a negative side. This study focuses on the issue of ‘retailer selection compulsion’ existing in the subsistence market, which refers to the negative side of these relationships. The purpose of this study is to investigate the factors driving the retailer selection compulsion in the subsistence market. This study adopted a qualitative phenomenological approach. Sixty interviews were conducted with subsistence consumers in two areas: Kolkata and Kharagpur, in the Indian state of West Bengal. The findings have demonstrated that subsistence consumers are compelled to stick to their neighbourhood retailers due to convenience, social capital, and obligations, as well as social identities resulting from a sense of social compulsion, and the value-added services provided by retailers that help overcome the consumers' financial and cognitive constraints. This study contributes to the literature on customer behaviour and retailing. These findings deepen the current understanding of the social capital theory, social identity theory, and bounded rationality theory in the context of subsistence marketplaces. Practically, the findings of this study will contribute to the practice of marketers who target subsistence markets. The findings will also help further entrepreneurial activities in subsistence areas, improve the retailing operations of subsistence retailers, and address exploitative practices of subsistence retailers on poor customers.     

Understanding multi-channel banking customers

This paper contributes to the knowledge of the impact of the multi-channel strategy by analyzing its effects on one key aspect of the behavior of financial services customers. We analyze the factors influencing the extent of multi-channel shopping. Using a customer database, the study estimates one latent class regression model to control for heterogeneity, finding that customers' acquisition of diverse financial products and services and the total number of financial services are antecedents of multi-channel behavior. The study contributes a new measure to better assess the level of multi-channel consumer behavior.     

Investigating Customer Resistance to Change in Transaction Relationship with an Internet Vendor

Many academics and practitioners have reiterated the importance of online customer retention to ensure long‐term profitability. Consequently, a number of studies have identified various means of customer retention. These studies lay significant emphasis on creating customer loyalty. However, retaining customers, especially in the context of Internet shopping, is very difficult because of the low costs in comparison and switching. Most of the loyalty programs have also shown disappointing results. This study suggests that by tapping on an individual customer's inclination to resist changes in a transaction relationship, an Internet vendor can achieve customer retention. Using status quo bias theory, this study examines customer resistance to change (CRC) as a means of retaining customers in a transaction relationship with the Internet vendor. The empirical study of an Internet bookstore reveals that trust, relative attractiveness, and switching costs together influence CRC. The empirical results also show that CRC and switching costs have positive effects on willingness to pay more. Implications for theory and practice are discussed.     

Can complaint-handling efforts promote customer engagement?

This study aims to fill an important research gap in customer management, namely, the extent to which customer engagement arises as a consequence of an effective complaint-handling strategy. In tackling this question, we offer new insights into service research that may help researchers and managers better understand customer non-transactional behaviors to complaint-handling actions. To test the conceptual framework, we employ self-reported information from a sample of customers who have experienced a service failure in the financial services industry. Findings show that complaint handling will increase not only customer satisfaction with the complaint-handling process but also customer engagement. Satisfaction also plays a mediating effect. Therefore, in the event of a service failure, a proper management of the problem will lead to more engaged customers.     

Spoiled Rotten: How and When Discontinuation of Repetitive and Regular Delight Offers Increases Customer Desire for Revenge

Retailers often delight their customers with surprise offers. Common wisdom would suggest that this practice is fruitful because customer delight elicits customer reciprocation and increases customer satisfaction. This research examines the negative consequences of offering such delight offers. Across five studies, customers receiving delight offers repetitively and on a regular basis develop a sense of entitlement. Once retailers decide to discontinue those offers, feelings of entitlement prompt customers to seek revenge against the retailer (e.g., filing complaints, switching to competitors, spreading negative word of mouth). Furthermore, customer expectation has been ruled out as an alternative process explanation. Even though customer entitlement and customer expectation are often confounded in the literature, our research offers conceptual and empirical evidence to illustrate the fundamental differences between these two concepts. Our results indicate that retailers could avoid elevating customer entitlement by designing delight offers as one-time offers or by delivering multiple offers following a random pattern. Additionally, we show that retailers can also limit the effect of customer entitlement on customers’ desire for revenge by providing offers of small monetary value and by explicitly communicating that the offer recipients are selected at random.     

Budget allocation for customer acquisition and retention while balancing market share growth and customer equity

Following the Blattberg and Deighton (BD) model, we incorporate market share growth to explore links between acquisition and retention. We then devise a method for nonlinear programming using a spreadsheet to balance the objectives of market share growth in the short term and customer equity in the long term. The aim of this approach is to determine the optimal spending allocation for customer acquisition and retention and, by applying this allocation to the numerical example used in the original BD model, to balance these objectives. We demonstrate that the differential unit cost of marginal effects, ceiling rate, efficiency, and allocation of spending on acquisition and retention to achieve market share growth can maximize customer equity. We also develop a criterion to help firms decide where to place spending emphasis, that is, on retaining existing customers or on gaining new ones, while keeping the objectives of market share growth and customer equity firmly in mind.     

A Typology for Evaluating Branch-Level Perceptions of Internal Customer Management Processes within the UK Clearing Banks

Since the late 1980, the UK Clearing Banks have faced growing criticism over the quality of their finanical services. Advantages may exist in using internal marketing to ensure closer integration of multiple functions across all departments. Although adoption of an internal marketing philosophy may improve the quality of services delivered to both internal and external customers, it appears that there are few paradigms available which can be used by bankers seeking to introduce the concept into their organisation. By applying a quasi-ethnographic approach, a qualitative internal customer management model was developed based on the Peters and Waterman 7s framework to describe the factors influencing internal customer relationship which exist between branches and other departments within a bank. To determine if the model could be used to evaluate branch-level perceptions of internal customer management practices, a survey was undertaken using a modifed version of the Parasuraman SERVQUAL model. The responses suggest that possible actions to establish a stronger internal customer orientation may include altering prevailing management styles, restructuring, redirecting operational strategies away from excessive emphasis on technical efficiency and improving understanding of internal customer needs. Although the study indicates that the SERVQUAL tool can be used to examine internal customer service processes within the financial services sector, there is still only anecdotal evidence that stronger internal customer chains will enhance organisational performance. Further research is needed to validate claims that there are favourable cost/benefit outcomes to be exploited by strengthing internal customer management practices. For bankers who are convinced that changing internal organisational processes may enhance the quality of services delivered to external customers, then a process flow model is presented of a possible approach for evaluating and implementing changes necessary to create a stronger internal customer orientation within their organisation.