Page 32 - Banking Finance JANUARY 2017

ARTICLE

from other competitive firms.(Michael D. Johnson & Fred
Selnes 2004). The loyalty is low here.

The primary relationship marketing goal is to satisfy the
customers' needs & wants. Most banks & insurance com-
panies in India treat their customers merely as Acquaintan-
ces. They do not understand the importance of building
relationship. They also tend to forget that satisfaction in
today's context is a passé. All competitive firms in the mar-
ket are capable of satisfying needs & wants of their custom-
ers. If a firm wants to survive & sustain itself in the market,
it needs to do things differently.

It needs to forge relationships. It needs to look at a customer of competitive advantage in this phase is higher than the
as a friend. When as a firm, you look at your customer as acquaintance stage. But due to its stated 'differentiation
your friend; you take your relationship to a different level. positioning' -it is difficult to sustain the competitive advan-
You try to measure the customer expectations in the chang- tage.
ing scenario. You also try to understand the various factors
that fire the customer expectations. You try to create The concept of differentiation is as ephemeral in nature as
favourable customer experiences that shape the customer the concept of customer delight and both are highly dy-
expectation (PwC's Health Research Institute). namic in nature and keep changing very fast. It becomes
difficult for a firm to keep differentiating its offerings vis-a-
The product offering at the friend phase changes. As you vis the competitors by tweaking in the changes to a mean-
better understand the customer expectation, you come out ingful differentiated positioning.
with differentiated product that directly addresses the
customer's requirement. You start providing satisfaction but The time horizon of relationship is generally medium. 'Trust'
you also try to win the trust of your customer. A customer the differentiated positioning that a firm takes to convert
becomes a friend when a trust has developed between the acquaintances into friends takes a longer period to develop.
buyer and the seller. The customer will continue buying as This bond of trust is very difficult for competitors to imitate.
long as she trusts the offerings and relationship of the firm
it is dealing with. However this time horizon can get extended if the firm
keeps evolving with the needs and requirements of its
As stated earlier, mere satisfaction doesn't work. In order customers and continue to differentiate its offerings as a
to make a customer a friend- a firm needs to deliver its firm. As a firm, you look for retaining the customer. Finally,
service interwoven with satisfaction & trust. The focus of all good companies today are looking for making their cus-
selling also changes. As the firm is armed with specific knowl- tomers as partners. Partnership is the culmination of cus-
edge of customer needs and wants, it tries to present its tomer relationship.
offering in a manner that better serves the above stated
needs of the customers. The acquisition as also the conver- As a firm, you come out with customized product offerings
sion costs at the Friendship level is not as low as it was at suited to the specific requirement of your valued custom-
the Acquaintance level. ers. Most banks in India today are not only selling banking
products but have also started selling various other finan-
The costs get increased as 'the differentiation positioning' cial products including insurance and mutual funds to bet-
in the overall offering starts costing the firm dearly. The firm ter serve the whole horizon of financial needs of their cus-
has to create different kind of distribution channels in order tomers -thus becoming partners at every level in the finan-
to retain friends. The chances of maintaining sustainability cial journey of their customers.

32 | 2017 | JANUARY | BANKING FINANCE

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