Customer Relationship Management in Banks
Customer relationship management in banks or customer service in banks leads to customer satisfaction which is fundamentally very important for banks in the world. Customer relationship management in banks gives them a competitive edge in a very competitive market.
Definition of Customer relationship management in banks
This can be defined as the degree of happiness or satisfaction a customer realizes with a bank product or service.
Customer Relationship Management in banks can be referred to as the ability to understand, sometimes anticipate and manage the needs of the customer.
Purpose of customer relationship management in banks
Basically the main purpose of customer relationship management in banks or customer satisfaction is to enable banks customer retention and attract new customers to enhancing business growth.
A satisfied customer is a great marketing tool for banks since these customers will help improve the banks business growth through referrals. Satisfied customers also give positive publicity hence leading to banks improved bottom line.
Banks should at all times strive to increase business through speed, agility and real time responses to the existing customer needs. This is because attracting new customers involves huge costs in term of promotional costs, advertising costs and even follow up costs. The longer the relationship a customer has with the bank, the better the returns they bring. This interaction and relationship should result in increased profitability to the banks through revenue growth and operational efficiency. The relationship also leads to customer loyalty.
Organizations caring for their existing customers are almost definitely likely to be winners. There are great benefits to the banks which adopt Customer Relationship Management in banks.
Benefits of customer relationship management in banks include:
- The existing customers will make referrals which likely result in business growth.
- There will be a positive public image resulting in fresh customers being attracted, increasing the bank’s market share.
- Reduction in cost in attracting new customers and this will result in the banks posting high profits, hence great return to the shareholders.
- Higher returns from existing customers as long relations will be maintained and boost in the banks profitability.
- There is loyalty by the existing customers and they will not transfer their business transactions to a competitor. This reduces attrition rate in the bank.
- Staff morale is boasted as they are proud to be associated with a bank with a great reputation. This reduces staff turnover and costs associated with hiring new staff and training.
The current advancement in technology actually makes it easier for banks to adopt the Customer Relationship Management in banks as information is readily available.