SUGGESTIONS
Bank must let potential customers know that all attractions for banking exist. This is done by advertising on television and obtaining press coverage, in conjunction with direct mail, window displays, leaflet in branches and in appropriate other locations (such as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing customers in the hope that they will tell potential customers about the services provided by our bank.
Financially unsophisticated people might feel bank accounts, cheque books, credit cards, etc. are difficult to understand and to keep control thereof.
Some personal sector customers prefer not to come to branch. They increasingly want to deal with the bank in other ways, such as home banking or use of Automated Teller Machines (ATMs), which need to be at the branch or some important shopping plazas.
It is widely known that there is a substantial Black Economy in Pakistan, Where people earn income that is undisclosed to the revenues authorities. Payments for goods and services in the black economy are necessarily in cash, because transactions by cheques are more likely to be exposed to the revenue authorities. Some people will therefore avoid bank accounts to preserve secrecy of earnings.
One way to retain the personal sector customers is to offer a wide range of services such as tax advice, free life insurance equivalent to amount deposited, shares portfolio management, fund management facility, etc., complimentary to the core services. Banks must have a slightly different mix of services. Banks must have a slightly different mix of services and mean of providing these such that customers can choose the mix that suits them best.
Arguably, there has been a little encouragement from banks to persuade people to open a bank account. Opening hours are restricted, and there is a commonly held belief that banks operate for their convenience and not for the convenience of the customers.
A logic leads to promotional campaign through employers who are customers of the banks and their employees are paid in cash. Such business accounts should be encouraged to open the accounts of their employees with the banks. It might be worth offering free banking for a specific period to new accounts or simply publicizing the services available by means of posters at the employer’s premises.
It might be possible to attract another type of personal customers through business accounts, namely directors and denier employees, etc. Again an incentive package could be put together.
The banks may choose to make its existing products distinctive or to introduce new products. It is often easier to benefit from adverse changes made by other banks than to attract customers by innovations.
A short term promotional technique is to offer price incentives, for example, low interest rates on advances or limited issue high profit bearing term deposits. Longer term, a Loss Leader may be offered. For example, profit bearing current accounts are not very lucrative but any bank can not afford not to offer these. The reduced profits can be augmented by profits made on other products.
It is also possible to attract/retain personal customers by investment in new technology like ATMs and Telephone Banking facilities, which made the services quicker, easier, cheaper and more flexible.
