Kate Stewart

Customer defection: a study of the student market in Ireland

Relationship marketing stresses that relationships, and not just transactions, should be the focus of marketing strategy. Part of the rationale for this lies in retention economics which are thought to be particularly powerful. Recent literature suggests that reduction of the defection rate can increase profits far more than growth in market share, better margins and other factors usually associated with competitive advantage. This paper reports the findings of a detailed analysis into the defection rate of university student accounts from financial service organizations throughout Ireland. University students’ accounts are a particularly illustrative case study since, a priori, their lifetime value, in terms of future revenue streams, have the potential of being greater than that of many other customer types. This paper then discusses defection issues and then presents evidence from the survey. Finally, the policy and strategic implications are examined.

An exploration of customer exit in retail banking

States that if the marketing community is to adopt the prescriptions of the relationship marketing school of thought, more knowledge and understanding of relationships is required. The base of knowledge is growing and there is now greater appreciation of the processes germane to healthy relationships, such as trust, satisfaction and commitment. Much less attention has been paid to the negative aspects such as relationship breakdown and ending. This paper addresses the neglected area of the ending of customer‐bank relationships or customer exit. Interviews were conducted with bank customers who had recently used the exit option. Content analysis of the customers’ stories was used to generate a model of the customer exit process. As reported here, the research took the perspective of the customer. This shows that customers end bank relationships after an involving process of problem(s), effort, emotion and evaluation. A discussion of the findings concludes that banks need to develop relationship management systems and skills.

A Delphi study of the drivers and inhibitors of Internet banking

Although Internet banking is a growing phenomenon, the underlying factors driving and inhibiting its diffusion are not well understood. This paper presents empirical research that investigated the factors driving and inhibiting Internet banking. The main component of the research was a Delphi study of expert opinion. This paper gives a brief overview of the academic literature on the diffusion of innovation and Internet banking. The conduct and findings of the Delphi study are then reported. The paper concludes that Internet banking will become an extremely important distribution channel in the future, with the drivers overcoming the inhibitors in influencing the rate. Further to this, the paper indicates that the existing diffusion of innovation literature identifies some of the factors instrumental in the diffusion of Internet banking. However, this study identifies additional issues.

A Delphi study of Internet banking

Deregulation has brought down the boundaries of the banking industry, allowing new entrants and enabling a greater degree of competition. Into this scenario arrived the Internet – another radical technological innovation with the potential to change the structure and nature of banking. Many banks have adopted the Internet as a delivery channel (indeed, some banks have set up as Internet‐only delivery). This paper reports a Delphi study of the Internet momentum in banking. Informed by diffusion of innovation theory, the study sought to discern the key issues and to explore the future of Internet banking. The results show that Internet banking is a very important issue in retail banking. However, the Internet will contribute as part of a multi‐channel (bricks and clicks) strategy, rather than as a stand‐alone (clicks only) strategy. The developing functionality of Internet banking may enable some banks to achieve competitive advantage through delivering higher perceived customer value.

The Diffusion of Online Banking

The financial services environment has been subject to changes on many fronts. Technological change and the advent of the Internet are among the most dramatic and challenging areas of change for the sector. This paper looks at retail banking and its adoption of online banking, in particular the factors driving and inhibiting adoption by banks. An international Delphi study confirms the high level of importance of the Internet for retail banking. By 2011, it is expected that bank adoption of the Internet will be near universal. The key factors that are driving banks to adopt online banking are the adoption by other banks, competitive forces, consumer demand and the availability of technology. Working against adoption are banks’ perceptions that the Internet does not offer enhanced ability to deal with customers as well as bank resistance to change, their existing legacy systems and the resources required to adopt.

The challenge of relationships in services ‐ a New Zealand study

This paper is concerned with the challenge posed by the management of customer relationships in services. The focus is on banks, although similar service businesses (with long‐term customers) may be expected to encounter like challenges. The relationship approach for businesses is discussed and is judged to be quite fundamental with wide‐ranging implications. The paper considers the appropriateness of the relationship approach for retail banking given the prerequisite conditions suggested by the literature. The personal banker strategy is considered as a means to implementing the relationship approach in retail banking. Empirical findings from a study examining the role of personal bankers in New Zealand are presented. It is concluded that a relationship strategy can be a double‐edged sword: implemented well it can have the desired effects; implemented badly it can have a negative impact that will leave the organization with more problems than if they had done nothing at all.

Allied Irish Banks

Publisher Summary This chapter discusses a case study on Allied Irish Banks. Allied Irish Banks, as its name suggests, was formed when three of Irelands established banks merged in 1966. Britain was a natural choice for the banks international expansion in the early 1970s because of its proximity and the size of the market. Different approaches were taken in the business, personal, and corporate markets. A proliferation of subsidiaries developed through the years with specialist products geared to specialist financial markets. Some of the subsidiaries making up the Allied Irish Banks Group included Allied Combined Trust Ltd and Allied Irish Leasing Ltd. The bank also had developed a presence in capital markets, offering customers services in treasury, international banking, and investment banking.

Marketing Financial Services: Preliminary Findings from Northern Ireland.

This paper looks at the banks in Northern Ireland and the implications for their marketing of personal financial services, given a rapidly changing environment. This change is occuring on many fronts, those examined are competition, regulation, society and technology. Cowell’s four-level analytical framework for the definition of service products is heavily utilised. Qualitative findings are summarised in a systemic representation. The author states that a. it is unclear whether current marketing strategies will provide the means to achieve competitive advantage; and, b. Northern Irish banks have been slow to adopt the marketing orientation.