Table of Contents
- CHAPTER 1 INTRODUCTION
- What is this report about?
- Scope of the report
- Who is the target reader?
- How to use this report
- CHAPTER 2 DRIVERS AND TRENDS IN CUSTOMER LOYALTY
- Introduction
- Customer loyalty is an increasingly important issue for European lenders
- Customer loyalty is declining across all retail banking markets in
Europe
- Increased consumer awareness has been key to this change
- Yet, customer behavior differs across national markets
- Customers in the Nordics and the UK tend to shop around the most
- However, the extent to which customers shop around depends on the
product they are buying
- Value for money is the main feature by which customers choose a
product
- Though not many strategies are successful in maintaining loyalty,
customer service initiatives are the most effective
- Some regions differ from the overall picture more than others
- Going forward, lenders will need to adjust their customer loyalty and
acquisition strategies if they are to stay ahead
- The customer loyalty issue is only going to get worse in the long run
- CHAPTER 3 BEST PRACTICE IN CUSTOMER RETENTION AND ACQUISITION STRATEGIES
- Introduction
- A number of lenders across Europe exhibit well-devised and sound
customer retention strategies
- Banco Popular cross-sells to maintain and build customer loyalty
- Banco Popular has continued to grow in a competitive Spanish retail
banking market
- The bank excels in cross-selling to existing customers as a way to
build up customer loyalty
- Unlike its larger competitors, the bank uses CRM systems, its brand
image, and customer service to cross-sell products
- Such a strategy has been highly successful for the bank
- Turkey' s Garanti Bank' s credit card loyalty schemes have become a
model for competitors worldwide
- Garanti Bank' s Bonus Card loyalty scheme has become well-known
- The Bonus Card uses a highly sophisticated points based loyalty
scheme
- Moreover, since the success of Bonus Card, Garanti Bank has since
launched a new and more innovative scheme
- Allied Irish Bank' s ' be' credit card varies the APR according to how
much consumers spend
- AIB' s strategy depends upon relationship banking in order to
cross-sell products
- AIB uses one pricing strategy to acquire and then two different
pricing strategies to retain customers
- Such a strategy also fits in well with Irish consumers' preferences
on how they choose a credit card provider
- Other lenders exhibit robust acquisition strategies
- Alliance & Leicester uses pricing and aggressive advertising on
current accounts
- Alliance & Leicester has become well-known for its aggressive
approach to current account acquisition
- The bank acquires by aggressive introductory pricing, marketing and
packaging
- The bank' s strategy is yielding returns
- A price-based acquisition strategy makes sense given that UK
customers choose a current account based on price
- Raiffeisen Bank in Hungary is using innovation to build up its credit
card business
- Indeed, Raffeisen Bank' s new card fits in well with how Hungarians
choose a credit card
- In conclusion, lenders should look to improve their own loyalty-building
and acquisition propositions
- There are a number of questions lenders should take into account
- CHAPTER 4 APPENDIX
- Supplementary data
- Supplementary data tables related to Chapter Two: Drivers and Trends
in Customer Loyalty
- Supplementary data tables related to Chapter Three: Best Practice in
Customer Retention and Acquisition Strategies
- Research methodology
- Definitions
- Balances outstanding
- Credit card
- Current account
- Debit card
- Gross advances
- Mortgage
- Personal loan
- Relevant links
- Relevant readings
- Future Readings
- Retail Banking Team contact details
- List of Tables
- Table 1: Do you think more customers shop around in general for
financial services products more than they used to a few years ago?
- Table 2: Which of the following factors have influenced more customers
to shop around in general for financial services products than they used
to a few years ago?
- Table 3: The Nordics: Which of the following factors have influenced
more customers to shop around in general for financial services products
than they used to a few years ago?
- Table 4: Southern Europe: Which of the following factors have
influenced more customers to shop around in general for financial services
products than they used to a few years ago?
- Table 5: To what degree do you think customers shop around different
providers rather than buying from their main bank automatically for credit
cards, personal loans and mortgages?
- Table 6: For the following three product categories, could you give us
your estimate of what percentage of customers you think shop around
different providers rather than buying from their main bank automatically?
- Table 7: For the following retail banking products, which features of
the product offering do you think are the most important for customers
when selecting which provider to go with?
- Table 8: In your opinion, how successful are the following techniques
in maintaining loyalty?
- Table 9: UK: Which features of a current account do you think are the
most important for customers when selecting which provider to go with?
- Table 10: Hungary: which features of a credit card do you think are
the most important for customers when selecting which provider to go with?
- Table 11: Ireland: which features of a credit card do you think are
the most important for customers when selecting which provider to go with?
- List of Figures
- Figure 1: The great majority of European banks are finding that
customers are shopping around more than they used to, 2006
- Figure 2: Increased consumer awareness in particular has led to
customers shopping around more than they used to, 2006
- Figure 3: Unlike the rest of Europe, banks in the Nordics are seeing
customers shop around more because of the growth in online banking as well
as an increase in consumer awareness, 2006
- Figure 4: In Spain, Greece and Italy, an increase in competition
between players has also been particularly crucial to customers shopping
around more, 2006
- Figure 5: More competition leads to consumers shopping around more,
2006
- Figure 6: Customers in the Nordics and the UK tend to shop around most
for credit cards, personal loans and mortgages, 2006
- Figure 7: Customers shop around most for mortgages and personal loans,
rather than credit cards, 2006
- Figure 8: Value for money is most important when choosing a mortgage,
personal loan, credit card or current account, 2006
- Figure 9: Across Europe, customer service initiatives are the only
technique which has been significantly more successful than others in
maintaining loyalty, 2006
- Figure 10: On its website, Banco Popular tends not to highlight a
product' s price, but rather its characteristics, December 2006
- Figure 11: Garanti Bank' s Flexi card allows customers to choose their
own interest rate and bonus scheme, December 2006
- Figure 12: AIB' s rate for those customers it wants to retain is
competitive, November 2006
- Figure 13: AIB' s acquisition and retention strategy ties in well
considering that Irish customers choose their credit card mostly by value
for money, the convenience of a single provider and customer service, 2006
- Figure 14: According to Moneyfacts, Alliance & Leicester offers
the highest interest rate on current account positive balances, December
2006
- Figure 15: UK customers choose their current account mostly on the
basis of price, 2006
- Figure 16: An existing relationship or a personal recommendation is
most important to Hungarian customers when choosing a credit card, 2006
- Figure 17: Datamonitor' s core consulting capabilities
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