USING CUSTOMER RELATIONSHIP MANAGEMENT AS A STRATEGIC TOOL
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USING CUSTOMER RELATIONSHIP MANAGEMENT AS A STRATEGIC TOOL
1Introduction
Currently, businesses face tremendous competition, and financial institutions are no exception. Competition is so fierce that some businesses are finding it increasingly difficult to distinguish their market offerings from those of their competitors, resulting in market duplication and losing their competitive advantage.
Some firms are increasingly using customer relationship management (CRM) to gain a competitive advantage. Instead of focusing on market products, they prioritise client satisfaction and building long-term connections.
According to Kotler et al. (2009, 661), a satisfied customer will not only return to use the services, but will also serve as a moving advertisement. Companies that focus on customer relationship management profit from this in two ways.
However, as information technology advances, customers have access to a wealth of knowledge, making them more demanding of market goods. Customers now have a wealth of information and knowledge about different market offerings from competitors, making it tough to manage them.
According to Phelps (2009, 5), each consumer is unique, hence there must be a specific technique to deal with them in order to maximise earnings. Customers in the early phases of a relationship are typically costly and expensive for businesses; when long-term relationships are developed, they become more profitable for businesses. (Phelps, 2009, 26).
This study focuses on how the case company, National Investment Bank, obtains new customers and develops long-term customer connections. To remain competitive among Ghanaian financial institutions, the organization’s internal customer acquisition strategy is analysed to determine the services clients require and anticipate from the bank.
As previously said, competition forces all organisations and institutions to manage their customers in a relationship-based manner, and customer relationship management has become an issue in financial institutions.
Retail and corporate private investment banks, personal and group pensions, mutual funds, investment funds, life insurance and general insurance, credit card issuers, stock exchanges, brokers and agents, and specialist lending and leasing companies, among others, are examples of financial institutions that create and deliver services. (Cheverton et al., 2004, 4).
Financial services touch almost everyone’s life, and the services they provide include current accounts, savings accounts, house loans, personal loans, general insurance, stocks and shares, credit and debit card availability, mutual funds, life insurance, pensions, and many more. Cheverton et al. (2004), 6.
Financial institutions are distinguished by the services they provide, such as banking and insurance. However, due to the amalgamation of most insurance companies and banks, single corporations now provide both services.
This has introduced a new method called “bancaassurance.” According to Cheverton et al. (2004, 8), these mergers have increased the number of companies that offer financial services. This has left management with the responsibility of maintaining long-term connections with clients and making them lucrative in the future.
Traditionally, financial institutions have been viewed as product-focused businesses. Instead than being customer-centric, they focus on products and a function-centered strategy.
However, in today’s world, most businesses are adopting a customer-centric approach in order to increase returns on investment and obtain more profitable customers by developing relationships with them. This thesis will look at how these financial institutions use a customer-centric approach and preserve long-term connections with their consumers.
Ghana, the case company’s native nation, had only three banks at the time of independence in 1957, each responsible for commercial banking, agricultural development banking, and development banking.
The trend has altered; according to the Bank of Ghana, the country now has 30 banks, 135 rural banks, and 48 non-bank financial entities. (Bank of Ghana, 2011).
1.2 Research Objectives
This research aims to demonstrate the current state of customer relationship management in the case company and explain customer expectations of its relationship managers.
It also covers seeing how the case company NIB maintains long-term connections with their business-to-business customers. Again, it aims to reveal what services clients demand that are not already offered in order to position the bank to compete with other market heavyweights.
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