ABSTRACT
Until comparatively recently there had been a presumption that marketing was principally concerned with the processes surrounding the creation of customers for a commercial organisation. Thus, decisions concerning the use of the marketing mix were largely geared to this end. In part this perhaps explains why marketing and sales are often viewed as being one and the same thing. It is undoubtedly true that customer acquisition has historically been the dominant purpose of marketing in the fi eld of fi nancial services. However, from the late nineteen eighties onwards marketing skills and resources have been used increasingly in the context of the existing customer base – that is to say, organisations have increasingly focused attention on marketing their services to their existing customers – encouraging them to either purchase more of the same product or to purchase different products from the organisation’s product range. This process is described in a number of different ways. Some will simply use the generic term ‘relationship marketing’; others will refer to customer retention or customer base marketing. Increasingly, the term CRM – customer relationship marketing (or management as some prefer to call it) is used to describe this form of marketing. Whatever term is used, the important thing to remember is that we are dealing with that branch of marketing which concerns the contribution of marketing inputs once the customer acquisition phase has ended. During the course of the third and fi nal part of this book we will focus upon marketing as it concerns the retention, management and development of existing customers. Thus, this
At the end of this chapter you should be able to:
• understand the importance of relationship marketing and customer retention in fi nancial services;
• understand the interactions between customer acquisition, customer retention and marketing activities;
• understand the nature and signifi cance of the concept of customer lifetime value;
• be aware of contextual infl uences on the management of customer relationships; • appreciate how digital marketing is impacting on customer relationship mar-
keting strategies.
