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The increased profitability of customer accounts. .
The improvement of the brand image of Friendly Bank.
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4. A new strategy for Friendly Bank.
4.1 Relationship marketing for Friendly Bank.
Friendly Bank has to use an effective relationship marketing policy (Paynes 1994), identifying, anticipating and satisfying consumers' requirements better that its competitors. Friendly Bank suffers from a customer retention problem. Marketing research shows that it costs five times more to attract a new customer than to retain an old one. In order to improve the profitability of retaining customers, Friendly Bank needs to improve its relationship marketing. This can be done by building closer links with customers and by establishing enhanced benefits of loyalty for the customer. Therefore this would move the customer up the relationship-marketing ladder (Paynes 1994). .
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4.1.1 Building closer links with Friendly Bank customers.
With regards to the unprofitable accounts of customers, Friendly Bank needs to expand its product portfolio. Friendly Bank needs to create financial benefits for the customer and introduce rewards to customers who decide to adopt new types of bank accounts. This would give a financial reason for the customer to enter into a long-term relationship and to remain loyal to Friendly Bank. .
By offering a broader product portfolio, Friendly Bank can create structural ties with its customers, which will then make it difficult and costly to defect to another bank (Storbacda, Stanandvik and Gionnoos 1999).
Friendly Bank can establish this strategy by placing emphasis on building a long-term relationship with the customer. For example by offering more specific services such as financial reviews to every customer who stays with the bank longer than six months, or giving pensions advice. For relationship marketing to work, Friendly Bank have to offer their customers mutual benefits, thus Friendly Bank would give customers reasons for banking with their organisation.
