Summary Bankers are increasingly making use of database marketing to retain their customers and expand sales. By helping customers to build equity in remaining with the bank, customers are less likely to drift away. The customer can be encouraged to plug the holes by pointing out that increased use of bank services can increase his equity without cost to him. One continuing goal of database marketing is to get customers to think about the value of the product and the service, and to forget about the price. Database marketing helps wonderfully in this objective, particularly in a banking situation in which service can be meaningful, and price competition is always a threat.
Word of mouth works well in financial services.
If customers have an incentive to refer their friends and relatives, they will do so, as MCI has proved to the world. The cost of such a system is really quite modest, in relation to the possible increased profits. First, and foremost, is conducting a close calculation of the possible benefits to the customer. Customers are ultimately interested in making a personal profit from their patronage with any institution. What they consider a profit is what the bank will have to discover.