1 RELATIONSHIP MARKETING & SERVICE QUALITY Marketing & Service Quality Module
Dec 30, 2015
1
RELATIONSHIP MARKETING & SERVICE QUALITY
Marketing & Service Quality Module
2
RELATIONSHIP MARKETING
Focused on building long-term, profitable customer-relationship
Build on premise that important accounts need focused and continuous attention
“Getting to know our customers better so we can meet their wants and needs better.”
3
How do we build relationship with clients?
Basic Marketing
Reactive Marketing
Accountable Marketing
Proactive Marketing
Partnership Marketing
4
Customer Satisfaction
= fx { PERCEIVED PRODUCT PERFORMANCE} and {CLIENT’S EXPECTATION}
If PP > E, Clients are very satisfied If PP = E, Clients are satisfied If PP < E, Clients are very dissatisfied
5
Tools in Tracking and Measuring Customer Satisfaction
Complaint and Suggestion Systems
Customer Satisfaction Surveys
Ghost/Mystery Shopping
Client Drop-Out Analysis
6
THE COST OF LOST CLIENTS
Define and measure drop-out rate Distinguish the causes of customer reduction Identify those that can be managed better Estimate how much profit the bank loses
when it loses customers Spend to reduce the bank’s drop-out rate LISTEN, LISTEN, LISTEN to Customers and
ACT, ACT, ACT
7
HOW MUCH IS A CLIENT’S WORTH?
Loan Size Term Revenue Client’s
valueNet Margin
P3,000 3 months P315.00 P1,260.00 P882.00
P5,000 3 months P525.00 P2,100.00 P1,470.00
P10,000 3 months P1,050.00 P4,200.00 P2,940.00
P12,000 3 months P1,260.00 P5,040.00 P3,528.00
P15,000 3 months P1,575.00 P6,300.00 P4,410.00
*Interest=2.5% / mo.; SC=3%; #Yrs. Loyal=1 (4 cycles);Margin=70%
8
HOW MUCH IS A CLIENT’S WORTH?
Loan Size Net MarginRevenue if 100% Retention Rate
Dropout Value
(Revenue*15%)
Loss/Month
(Drop-out value/12 months)
P3,000 P882.00 P101,430 P15,215 P1,268
P5,000 P1,470.00 P160,050 P25,358 P2,113
P10,000 P2,940.00 P338,100 P50,715 P4,226
P12,000 P3,528.00 P405,720 P60,858 P5,072
P15,000 P4,410.00 P507,150 P76,073 P6,339
*Ave. portfolio=115 accts; Drop-out rate=15%
9
THE NEED TO RETAIN CLIENTS
Acquiring customers can cost five times more than the costs in satisfying and retaining current clients.
An average company loses 10% of its clients every year.
A 5% points reduction in customer drop-out rate can increase profits by 25-85%, depending on the industry.
The customer profit rate tends to increase over the life of the retained customer.
SOURCE: Selling: The Personal Force of Marketing
10
The KEY to Customer Retention is Customer Satisfaction
Creates Customer Loyalty Helps the Bank to better Cross-Sell and Up-
Sell other Products & Services Supports better Word-of-Mouth Marketing
Creates “Stickiness” Listening to Clients can Improve the Bank’s
Products & Services The Cost of Promoting Services to Existing
Clients is less than to New Clients
11
Correlation of Service Quality and Bank Profitability
12
SERVICE QUALITY
SERVICE- Is any act or performance that one party can offer to another that is essentially intangible and does not result to ownership of anything.
QUALITY – Is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
13
Dimension of Service Quality
Reliability Assurance Tangibles Empathy Responsiveness
14
Questions to ask to check if we are effectively providing service quality to our clients
Do we strive to present a realistic picture of our service to customer?
Is performing the service “right the first time”, a top priority of our Bank?
Do we communicate effectively with customers? Do we surprise customers during the service process? Do our employees regard service problems as
opportunities to impress customers or as annoyances? Do we continuously evaluate and improve our
performance against customers’ expectations?
15
THANK YOUFOR MORE INFORMATION ON MARKETING, VISIT
THE RBAP-MABS TOOLKIT AT:http://rbapmabstoolkit.wordpress.com