Relationship Marketing in the Financial Industry
Relationship Marketing
Assignment 1
December 2011
Compare and contrast the ways in which two FINANCIAL organisations (banks or building societies) manage their relationships marketing strategy with different group of stakeholders.
Introduction
Stakeholder’s satisfaction is the key to any financial organisation success. To satisfy their stakeholders banks will need to know their needs, wants and requirements, both short term and long term, this can be done through thorough market research or by building relationships with their stakeholders, and this is known as relationship marketing.
“Marketing is no longer just about developing, selling and delivering your products it is increasingly more concerned with the development and maintenance of mutually satisfying long term relationships (Buttle, F.1996, P.1)”
Relationship Marketing is seen to increase stakeholder loyalty to the organisation and in return benefits both the organisation and the stakeholders involved. Heskett’s et al service profit chain (see appendix 1) shows how an organisation benefits when both internal and external stakeholders are satisfied, the trail flows from employee satisfaction to employee productivity to customer satisfaction and therefore loyalty, and the end result being increased profit for the organisation. Employee satisfaction is vital in the banking industry as most of the work involves direct contact between employees and customers.
Stakeholders
Prior to any efforts made to build up relationships with stakeholders it is important to know who the key stakeholders are and how they influence the organisation, see below for Mendelow’s Matrix which is used to map stakeholders and their power to affect the organisation (Johnson & Scholes, 8th Edition)
Analysis of Stakeholders within the banking industry:-
High Power + High Interest = Customers, current & prospective
Low Power + High Interest = Government, Society
High Power + Low Interest = Employees, shareholders
Low Power + Low Effort = Suppliers
Financial Organisations
With only five major banks taking up the majority of the market share the focus on relationship marketing is ever more prevalent. According