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The banking industry is moving from a highly controlled industry to an industry characterized by more aggressive competition, pervasive uncertainty, and unlimited opportunity, and hence banks will have to change the way they do business. Driving this is the realization that customers do not want or need banks! What customers want and need is a financial distribution system that is convenient and secure. This distribution system can take different forms and names. The ensuing years will tell us what that names and forms will be.

Banking has got a big stake in the changes that will take place in the next several years. Because of its tradition, banking had a head start, but the security provided by the tradition may be false security. Today and at an increasing rate, competitors who have survived the challenges of the hyper competition in the retail industry may prove a significant competitive force for traditional banks. In the days to come, more and more non traditional competitors like term lending institutions, mutual funds, non banking financial companies, thrift societies, insurance companies and even retail store chains will be vying for market share for profitable products that were hitherto the exclusive “property” of banking in the years past. Similarly banks also will venture into hitherto unknown non traditional areas through innovative planning.

Considering the fact that the financial sector has emerged as the fastest growing segment of Indian economy during the past decade, it has been most exposed to international developments which has become the source of opportunity as well as vulnerability.  Understanding the immediate and inevitable changes that are required in the approaches of the banks to face the challenges of the future especially the challenges of competition, a new dimension and direction in the marketing of the bank services have become a vital necessity for their survival and also for their rapid progress. Future is not going to be made tomorrow; it is being made today, largely by the decisions and actions taken with respect to the tasks of today.

A new approach to bank marketing based on the current realities and opportunities to achieve the objectives of creating and exploring new areas and avenues by invention and innovation and by creativity and research so as to bring tomorrow to day, should evolve a new strategy. The innovative marketing should aim at creating new business rather than new product within the already established line. It should aim at new performance capacity rather than improvement. It should strive at creating new concept of what is value rather than satisfying the existing value expectation a little better. The aim of innovating efforts is to make a significant difference. What are significantly different are not technological decisions. It is not the quality of science that makes the difference. It is not how expensive undertaking it is or how hard it is to bring it about. The significant difference lies in the impact on the environment. It is, therefore, attitudes and practices. It is above all, management’s   attitudes and practices. 

“Opportunity is where you find it.” Say an old proverb. It does not say “Where it finds you.” Prosperity and growth come only to the business that systematically finds and exploits its potential. Hence seeking opportunity is an inevitable necessity for the banks. In a highly competitive field, the most important aspect to capture business is the quality of the product and quality of service, pre-sale as well as post sale, which are going to determine the market leader. A rare but effective combination of quality product and quality service can ensure a big chunk of market share even for a new entrant.

Even a well defined defect free customer service and care will not succeed if they do   not fit in the customer perception of quality and if appropriate follow up measures and services are not available. Hence it is necessary to build up a quality image of the bank in the market. Quality program and quality improvement program are to be customer driven and not technology driven or competitor driven. Marketing policy, if it is to be effective, should be based on the customer perception of quality. There are three important stages of business which influence the customers’ perception of quality. They are,

(1)  Before customer approaches the bank: The quality image of the product and the service image of the bank determine not only the customer perception of quality but also the influencing factors of customer preferences.  Hence   image building plays a great and vital role in marketing.

(2)  At the point of service: How the customer is treated and how his wants and needs are satisfied  through delightful customer service will determine customer preferences.

(3)  After sale service: How a customer is taken care of after the sale is over and how his future needs and wants are satisfied as and when required, will determine the Customer loyalty.                                                                   

Based on the above mentioned influencing aspects, a customer service program is determined and formulated and along with this, a quality improvement program also will have to be initiated so that the customer perception of quality service will match the service perception of the bank so that not only the loyalty of the existing customers is ensured but also they become the marketing media of the bank as well to bring in prospective clients.

The present trend is that customers now demand high quality at a lower price. Hence the paramount importance should be given to understand the changing trend and attitude of the customer and to respond positively to the changes taking place in the market so as to capitalise on the opportunity. The new marketing orientation should be to achieve the following objectives.

(1) Creating customer patronage: As more customers seek to extend their patronage, the perceived quality of customer service becomes an increasingly important factor in their decision to patronage the bank.

(2) Cementing  customer  patronage: Generating  new awareness and discouraging switches  to  alternatives  by  keeping  constant  contacts  with  the  customers to  understand  their  needs  and  wants  and  to  induce  quality  improvement in the  services to the delight of the customers, not only the existing customers will be pleased   to continue their patronage permanently but also helps the bank to add new clients as well.

(3) Reinforcing customer loyalty: A bank with strong customer service programmes can broaden  their  base more easily to deliver better quality customer service so that  they  can  increase  their  share  of  business  in  the market and  reinforce customer loyalty on a permanent footing.

Further customer education and customer counselling which are not being given the required importance now especially about the services of the banks of which they are not even aware of, should also be included in the new orientation of marketing. In the ultimate analysis, the bank has to reorient their marketing strategy which matches the habits of the customer, takes decisions to serve the customer with a delightful service and improve upon further on the basis of feedback  and through innovation and also by analyzing the influencing factors of the customer, to provide a totally harmonious offering where the service image of the bank match with the self image of the customer, then the bank can become the leader in the market with a sizable market share which can produce excellent economic results. The perceptions, culture, values, and business ethics of the bank and the perceptions of the customers are complimentary to each other and if united will not only lead to excellence in business but also ensure an adoring relationship between the bank and the customers. 

T.R.Radhakrishnan,

Banking and Management Consultant,

Facilitator: DRT and SARFAESI Act cases.

H.R. Trainer: Corporate, Colleges and Schools,

8, Morya Gardens, Behind Karnataka Vidhya Niketan,

Kanadia Road, Indore.452016 (M.P.)

Email: trrk1941@gmail.comcareacademy@indiatimes.com

(The author invites comments from readers and he can be contacted through E-mail: trrk1941@gmail.com)


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