Customer knowledge can produce very good profit and income streams in many ways: it can be categories, merchandising or even increases in the innovation success rate like online banking.
For a bank, listening to what customers and transactions are telling by hearing them and capturing their messages may eventually lead to better customer relationship management undertakings, new product and services offerings. In a profit perspective this leads to improving customer’s loyalty, economics which also equates with the bank’s profit initiatives.
In category management for example, the products and services leads to their own buying behaviors and dynamics. In a bank’s product categories for example, they know their customer preferences, price issues and spending behaviors. Thus, when we have a great knowledge of customers behaviors it will enable the bank to create a higher revenue margin index. The value is generated from the customer knowledge so the bank can create maximum income streams and products/services than solely relying on traditional bank and service charge principles.
Then after which this leads for new profitability based on this knowldge of the customers spending behaviors. This is then called “precision merchandising” as it is not a mere educated guess from some research or survey that traditional banks use for their analytical studies.
These new products and services that are then created can become commodities as the bank truly understands their customers and better economics.
Banks have technical capabilities like online banking for example in adding economic value added but not a lot of banks understand that a customer’s freedom of expression and political knowledge might translate to an extremely high success rate for new products against their competitors.
So my question lies, we might have the great financial and technical whiz in the banking industry, but how do you profit from simple product to customer knowledge in service?
