During interactions with their clients, Citigroup normally asks clients through email whether they would like to participate in a survey. If the client accepts to take part, they ask them what services they prefer within the Company and what services they would like to see improved. A survey is also done on prices of services on offer and suggestions noted. The bank is then able to determine what consumer preferences are and therefore acts accordingly. Clients were content with the level of service provision compared to other banks. This meant that the Company now solidified the relationship between consumers and the bank.
Such a strategy put Citigroup ahead of the competition because it had already determined exactly what consumers are looking for through relationship marketing. Other banks that may not have a very stable relationship with their clients do not have the ability to determine specific details that consumers require in their services. Such banks are subject to the theory of economics called ‘ the leaking bucket’ . Here such banks spend most of their time and efforts in the acquisition of new clients and very little in the retention of existing ones.
Consequently, newer clients only purchase items/ services once and never come back. This means that the firm may get increased profits as it gets new clients, on the other hand, it keeps losing profits from the departure of old clients. In the end, minimal profits are made. This sort of behaviour is synonymous to a leaking bucket that never actually holds much content. Citigroup did not ignore their old clients and this was the reason why they have been identified as one of the most profitable financial institutions in the world.
Citigroup has been able to benefit from relationship marketing because of the following reasons. It has had to invest less in conducting the business. This is because very little amounts of money are required to convince a long term buyer to purchase a certain product. On the other hand, getting a consumer to change their minds about conducting business with another bank and choosing Citigroup can prove to be very costly because the Company has to be very convincing.
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