Consumer relationship management: Case study Bankinter Remco Wezepoel 14/10/2013 Which channel (8700, alliances, e-collaborators) performs better for the bank, and why? And what acquision strategy would you recommend to Bankinter? What actions should be taken by Ana Peralta? In order to choose the best consumer acquisition strategy for Bankinter it is necessary to look at the profitability of the customers. It is nice to have a lot of customers, but this does not really make sense when these customers ensure your company with losses.
It is important to look at the profitability f customers in the long-term. Based on exhibit 11 in the article, it is possible to calculate the average consumer equity. As you can see in appendix 1, the total profit for new internet customers after four years for the e-collaborators channel is 377. 194 and -5. 336. 149 for the 8700 channel. In my opinion it is not really useful to calculate this number for the alliances channel, since the article mentions that these alliances were terminated because of high acquisition costs as a result of promotion and advertising fees.
With the numbers of customers (exhibit 7) it is possible to calculate he average customer equity per customer per channel. For the 8700 channel this average equity is (-5. 336. 149/39. 643) -135 dollar per customer. For the e-collaborators channel this equity per customer would be (377. 194/2. 996) 125,90 dollar. Based on these numbers, it is clear that the e-collaborators channel performs way better for the bank and thus I would recommend the e-collaborators strategy to Bankinter. Actions which should be taken by Ana Peralta are focusing on making more customers “formalized customers”.
In exhibit 10 in the article it can be seen that only 4% of the clients in the e-collaboration channel are registered. When Bankinter should emphasize more on the online registration, it is possible to obtain more detailed information about the customers. This information can be used to send them tailored personalized advertisement messages, which can generate more sales and so more profit (Aldridge, Forcht and Pierson, 1997). Another action which should be taken (but this will be really hard) is to improve the online service, in order to create more consumer loyalty.
Finally, Ana Peralta can extend the online service for usinesses, since Bankinter was especially focused on individual customers. An example of this extension can be to make deals with businesses about insurances for their employees. According to exhibit 3b in the article, insurance sales are pretty profitable, so this might be a really good choice! How do you evaluate the acquisition strategy of Bankinter? Bankinter is an innovative, multichannel, low-cost provider of financial services. To attract new customers at low costs, internet was used.
Bankinters’ stated strategy was to be the ‘most effective urban middle-sized bank leader in corporate services and in pper income level consumer banking (Asis Martinez-Jerez and Narayanan, 2007). I ne strategy usea to acqulre new Internet customers was tnrougn product ana channel-orientated marketing. The internet branch of the bank contains different channels with different characteristrics per channel which will be mentioned here: Alliances channel: This channel is about partneting portals which are dominant and highly trafficked, which means that these portals are visited regularly.
Negative points about this channel were the following: The Banks’ look had to be adapted, so the brand was hidden There were very high osts because of space on servers High annual fees had to be payed in order to be cobranded A pay had to be payed per acquired customer through the partner’s portal, which resulted in high acquisition costs E-collaborator channel: This channel was the result of a shifet approach after the alliances and means that banners of the Bankinter bank were placed on websites which linked users directly to Bankinter website.
Positive points about this channel were: The bank did not have to pay an up-front fee to the portal. Transactions were done from the Bankinter site, so t was hard for competitors to get expertise in their online system. More insight in customer behavior, so ability to analyze the customers properly. In my opinion, the strategy of the company is smart and adopting to current developments. With the growth of the internet it was a must (and a missed chance if there was not) to focus on this medium. Bankinter did that with the alliances.
While the alliances resulted in more new customers, the price was quite high, the brand was too much hidden and the competitors copied the banks’ strategy. So Bankinter started with the e- collaborations. These high-traffic-websites approach collaborations generated even more customers (exhibit 1 in the article). These customers were attracted by providing them with incentives. This e-collaborations approach resulted in lowered customer acquisition costs and made it possible to set up a proper consumer relationship management system, which provided the company with insight in the behavior of the customers.
According to the case, the changes which the bank has made generated new customers with a higher customer equity. However, the overall strategy is a little unclear to me. Besides that, nothing is said about the performances of the competitors at the same moment in time. Were they also gaining in their customers? Or did they lose customers? And if so, was this because of the changes which Bankinter made or did they went to a whole other bank? Maybe it would be lucrative for the bank to follow a certain model in order to acquire new internet customers.
An example could be the ACTMAN model (Blattberg, Getz and Thomas, 2001). This model starts with targeting . Like the article mentions, the bank attracted new customers via high traffic websites. This is a pretty random type of targeting, hich cannot be optimal, so here is some room for improvement. The second step in the model would be ‘awareness generation and product positioning. Awareness about Bankinter is created, but the product positioning could be optimized in my opinion.
Following a clear model like this one could be a good strategy for the company In order to acqulre more customers wnlcn are proTltaDle on tne long term. So, it is my opinion that the strategy of Bankinter is pretty strong. Increases in clients are visible with the changes they have made, but I have to mention that I do not really see a clear line in their strategy. For now the bank should ask himself: Where do we go from here?. This because nowadays there is more and more competition among customer acquisition (Reinartz, Thomas and Kumar, 2005).
The internet is a medium through which small players can offer resistance against big companies. It is the challenge for the big companies to distinguish themselves through for example special offers, customer relationships or excellent service, in order to attract the most profitable customers and to become/maintain the biggest player on the market. Literature Aldridge, A. , Forcht, K. , Pierson, J. 1997, Get linked or get lost: marketing strategy for the Internet, Internet Research, Vol. (3), pp. 161 – 169 Asis Martinez-Jerez, F. , Narayanan, V. G. , 2007, Internet customer acquisition strategy at Bankinter Blattberg, R. C. , Getz, G. , Thomas, J. S. , 2001, Customer Equity. Building and Managing Relationships as Valuable Assets, Harvard Business School Press, Chapter 3, Managing Customer Acquision Reinartz, W. , Thomas, S. J, Kumar, V. , 2005, Balancing Acquisition and Retention Resources to Maximize Customer Profitability, Journal of Marketing, Vol. 69 (1), pp. 63-79 Appendix 1