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    Botswana’s women boxing on the rise 

    Boxers Finally Receive their Prize Money from 2022 African Championships

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    Darts Expects Only P50K from BNSC for 2023/24

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    Botswana athletes to train in USA

    Debswana’s BAA Sponsorship Plays Critical Role in Developing BW Athletics – Theetso

    Debswana’s BAA Sponsorship Plays Critical Role in Developing BW Athletics – Theetso

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    Boxers yet to Receive Prizes from 2022 African Boxing Championships 

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    April will see 2nd Instalment of Summer Kids Marathon

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      Botswana’s women boxing on the rise 

      Boxers Finally Receive their Prize Money from 2022 African Championships

      Darts Expects Only P50K from BNSC for 2023/24

      Darts Expects Only P50K from BNSC for 2023/24

      Botswana athletes to train in USA

      Botswana athletes to train in USA

      Debswana’s BAA Sponsorship Plays Critical Role in Developing BW Athletics – Theetso

      Debswana’s BAA Sponsorship Plays Critical Role in Developing BW Athletics – Theetso

      Boxers yet to Receive Prizes from 2022 African Boxing Championships 

      Boxers yet to Receive Prizes from 2022 African Boxing Championships 

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      Home Columns Banking Metamorphosis

      Customer retention: a desideratum or just pure grandeur – Part 1

      Competitiveness in the banking industry has increased significantly in recent years due to a number of factors.

      Gomolemo Manake by Gomolemo Manake
      March 29, 2022
      in Banking Metamorphosis
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      Customer retention: a desideratum or just pure grandeur – Part 1
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      Pivotal to any relationship or form of partnership, the needs of all stakeholders in any business or non-business juncture from either side must be met and the objectives for coming together must be the anchor. The cornerstones of customer retention management espouse this philosophy and it moves in the exact and identical pattern. Banks or any business must continually ensure that customers are getting what attracted them to a certain brand and what they signed for. In return, a business must also derive value from customers, the distribution and usage of products and services offered to customers must generate revenue and profits.

      Unfortunately, however, in the case of commercial banks, due to a sizeable number of competing entities, customers will always have several options at their disposal to choose from and can easily switch to competitor products or substitute if they are not satisfied. In the final analysis, if a business entity is devoid of robust and thorough customer retention management initiatives at both tactical and strategic levels, customers will ultimately leave to identify with a brand that makes them   feel valued and considered an important stakeholder in that business. Customers are not just entries or numbers that quantify how big or small a business is but living and breathing souls with feelings and preferences.

      Competitiveness in the banking industry has increased significantly in recent years due to a number of factors. The other chilling dimension is the fact that products and services offered by banks can be easily copied or duplicated, and banks are also not only competing among themselves because non-traditional competitors are actively claiming a share of the cake.  The need to hold on to a client has become a factor in ensuring the survival of a business. From a cost perspective, retaining an existing bank customer costs less than acquiring a new customer. The cost of creating a new customer is estimated to be five times more than that of retaining an existing customer. The cost of losing a customer is even more devastating.

      According to Review Trackers, the average customer attrition rate among retail financial institutions per annum is estimated at 15 percent. Approximately half of the customers who churn do not make it past 90 days after opening their accounts. In the Botswana market, the average spend in acquiring a new customer is estimated at around P2300 per customer while the very same customer generates less at about P1800 per annum as total revenue.  The relationship with a newly acquired customer does not become profitable until well into the second anniversary.

      How does the lacunae get addressed then? The number always tells a story. We are not even talking with quantum yet this is a highlight to any business that there is always a need to have an effective retention strategy unless your business is a monopoly. Honeymoons always come to an end at some point.

      The critical question therefore remains, how does a business come up with an effective customer retention strategy to keep attrition in check? How does a bank make it worthwhile for customers to stay and avoid high churn rates? Is the Unique Selling Proposition (USP) the quintessential element needed to make a bank different from its competitors and convincing enough in making a customer stay? There has to be something more than that. Remember, customers want to be treated as critical stakeholders of any business. And this, from their perspective, has nothing to do with their buying behaviour and the revenue they contribute. Those aspects will concern an entity and not them.

      A report by Accenture states that generally more than 50 percent of banking customers worldwide have expressed a desire for an Omni channel banking experience where they could switch seamlessly between physical and digital channels as an important factor in choosing and staying with a bank. The products and services do matter and the ease of transacting with banks, whether for insurance, credit or just investment purposes, will always be key. However, emotional elements and psychological associations with a banking brand always come into play. How bank X makes a customer feel   is important. Furthermore, how does bank X make me feel compared to how bank Y makes me feel? These are some of the important considerations and emotions that customers go through from time to time. However, it is a chilling discovery through research and surveys on customer retention management that customers have indicated when they express their desire to leave relationship managers, bankers and even senior management. Absolutely no effort is made to  keep them and thus prompting the question, Do I really matter as a customer here?

      In Part 2  of the series, we will explore some of the initiatives that banks can explore in an effort to improve   customer retention management.


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      LinkedIn: Gomolemo Kololo Manake

      e-mail: gomolemo.manake@icloud.com

      Tags: Review Trackers

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