Banks as a business entity are resonating well with the people as customers. After decades in existence, banks are still concentrating on their product as a core business portraying their company main profit. With stiff competition in a market which offers basically almost a generic product, banking landscape industries are definitely changing. From a push marketing oriented strategy, the bank has now shifted toward a pull concept strategy by providing a good service and attempt to build a stronger bond with the customers.
We call this a Relationship Marketing Oriented (RMO) strategy. The significance is that a bank may gain a competitive advantage among the rest of the players towards their brand name. Specialisation or focusing toward some segments of customers enable them to receive strong trust and mutual understanding between both parties. By maintaining the relationship, the particular transaction could last longer and beneficial in maintaining the bank’s permanent business. The RMO approach emphasizes on the bonding with the customer which could result in the effectiveness of the business.
RMO has a strong affiliation in building brand equity for the bank. The loyalty can be generated towards both tangible and intangible product offered by the bank. It is important to develop the growth between the customer and the bank in order to strengthen the bonding from time to time.
To have a brand equity as sustainable competitive advantages, four behavioural components of relationship marketing are put forth:
Trust. Long- term relationship fundamental is another word for trust. By well-handling customers’ privacy and trustworthy policies and practices, banks may win customers’ decision and be able to determine their level of loyalty to the banks.
Communication. In strengthening the brand equity, accurate and up-to-date communication is important; which are supposed not to be neglected at all time. Advertising does play a vital role too in creating customers’ favourable perception, attitudes and behaviour towards bank brands. Entertaining customers’ questions related to payment matters effectively may contribute to the dissemination of positive word-of-mouth and enhancing brand equity of the bank.
Shared Values. Carrying out marketing research constantly by holding meetings with prominent customers helps to identify customers’ view, opinions, belief and values and makes a favourable impression in customers’ mind towards the services provided, whilst complementing to developing important and appropriate goals and policies to acquire more consistent business.
Empathy. Customers want to be heard and to be understood. The greater a bank understands its customers’ feeling and views, the stronger the brand equity the bank will generate. Front desk staffs should be well trained in understanding customers’ needs and expectations. It is essential that top management needs to also visit branches randomly to monitor the practices being implemented there.
The aforementioned components convey that the Relationship Marketing Orientation and brand equity really matters for banks to escape the tendency of customers switching side and head to their rivals.
Lt. Colonel (PA) Professor Ts. Dr. Hjh. Norazah Mohd Suki is a Professor at OYAGSB and a recipient of Malaysia’s Research Star Award 2018. While Mohd Mukhlis Mohd Jamaludin and Nur Rafizah Ibrahim are the MBA Scholars at OYAGSB.