Keeping customers is good business
A NELSON Mandela Metropolitan University professor’s inaugural lecture has illustrated the importance of retaining clientele instead of recruiting them, by adopting a fresh approach to the research used by financial service providers (FSPs).
Speaking at the NMMU North Campus Conference Centre on Tuesday evening, in front of a room full of her colleagues and Bay business role players, Professor Chantal Rootman began her lecture “Research in financial services: professing a way forward” by saying she had been looking forward to this moment for 14 years.
She wasted no time explaining the importance of FSPs to the nation’s gross domestic product growth and how they should protect their most valuable asset – their clientele – through relationship marketing (RM).
An FSP is any person or organisation furnishing advice or rendering any intermediary service that relates to selling, administration or servicing of a financial product.
Financial services are economic services relating to money management – FSPs include banks, financial advisers, insurance companies and accounting firms.
“Research evaluation for FSPs has shifted from service quality to customer satisfaction, customer retention and loyalty. “Now we are in an era of relationship marketing. “[This] relies on customer satisfaction and loyalty as being key to FSP success,” she said.
Relationship marketing is a facet of customer relationship management that focuses on customer loyalty and long-term customer engagement rather than shorter-term goals.
“RM research only started in 2004 and there are only about eight RM experts in the country, but it is one of the fastest-growing business models in the world. Its focus is that it costs more to recruit a client than to retain one.
“According to studies, bad service from FSP employees is the most important reason to switch to another FSP. Clients really want good attitudes and knowledgeability from FSPs, and are not too concerned about fees,” she said.
Rootman said her research on the topic had started 14 years ago as a result of ordinary people asking the same questions.