Eight Keys to Improving Customer Loyalty and Retention Through Direct Marketing

It is often more profitable for banks to focus direct marketing efforts on retaining existing customers and cultivating their loyalty than to attempt to attract new customers. A successful marketing programme aimed at customers has eight key components: research, segmentation, communication, consistent brand character, cross‐selling, relationship pricing, tracking and execution. In this article the author describes how these techniques work and offers examples of their successful application by financial institutions. He concludes by noting that a financial institution's existing customer base is one of its most valuable assets. Getting new customers usually involves winning them from a competitor, which requires superior salesmanship and superior products. Consequently, bank marketers are discovering that it often pays big dividends to use the above techniques to build a more profitable relationship with existing customers.