Friday 16 June 2006
New findings to be presented at University of Queensland Business School next week show that losing customers to a competitor might not be all bad.
According to New Zealand researchers Ron Garland, Gavin Lees, and Malcolm Wright, some people who switch banks aren't necessarily lost customers in the longer term.
Garland said the new findings show that some bank switching behavior is due to reasons outside the bank's control.
He said, "When customers move some or all of their banking business to a competitor, their reasons usually fall into one of three broad categories."
"It could be because they can get a better offer elsewhere, because their expectations haven't been met (service failure for example), or because of what are called stochastic reasons, that is, things that are beyond the bank's control."
"Our research in the New Zealand banking sector shows that stochastic reasons account for a considerable amount of switching.
"More importantly, we found that when customers move for stochastic reasons, the previous brand remains in the customer's consideration set with the same purchase probabilities for a brand of its size."
"While the previous main brand may be gone, it is certainly not forgotten!"
Garland said the study had important implications for bank marketers in both their recovery marketing campaigns and the need to implement programs to retain recent acquisitions.
The findings will be presented in detail at the upcoming Frontiers in Service conference to be hosted by University of Queensland Business School from 29 June to 2 July 2006. The conference is open to both practitioners and academics and features the world's leading experts on services and services marketing.
Media enquiries:
Cathy Stacey
Marketing Development Manager
Phone (07) 3365 6179
Mobile 0434 074 372
Fiona Sutton
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Email media@business.uq.edu.au
