Banco De Santiago – Strategic Marketing Implementation
Banco Santiago
Strategic Marketing Implementation
Introduction
In the late 1990s, main Chilean banks were facing strong competition and fast duplication of new products and services. The most competitive area was personal banking. Faced with these challenges, Banco Santiago needed to change its strategic focus from products to customers. Central to a new philosophy was the improvement of account retention strategies and a renewed emphasis on attracting customers from other banks.
In 1997, Banco Santiago commissioned an international consulting firm to develop an in-depth marketing study of over ten thousand clients and nonclients of private and commercial banks in Chile.
The objective was to learn about customers needs, financial habits, product purchase behavior, services required, channel preferences, and the most valued bank characteristics.
The new value-based segmentation was launched in the second half of 2000. An integral element of the new posture was the multibank concept by which the bank reconfigured its operations and services around key market segments.
By the second half of 2000, the implementation of the multibank strategy was almost complete.
While the implementation timetable was very much on track, some difficult problems started to surface.
The satisfaction and commitment of account executives was deficient, clients were threatening to close their accounts, and the market share goals were suffering.
Banco Santiagos History
Founded in early 1977, Banco de Santiago was created to offer services in areas related to trade development. Efficiency and volume were at the base of its price differentiation strategy.
Its growth can be viewed in two phases. In the first phase, from the opening until June 1978, the bank grew very rapidly, mainly due to its lower fees and specialization in large-scale transactions. During this period, the bank successfully established its presence in the market and achieved its initial goal of obtaining a significant market share.
The second phase began, ahead of the original provisions, in July 1978. In this phase, the bank sought to maintain constant growth. It started to consolidate its success by diversifying its portfolio, balancing its loan portfolio, and focusing on client services. This phase was marked by a consistent effort to offer the highest level of services in the Chilean bank industry, and by maintaining their leadership position.
On one hand, the Bank focused its efforts in the small- and medium-sized businesses where trust in the quality of the services was more important than price On the other hand, it also focused in the financing of