Financial Planning For the Future » customer http://www.5guineas.com Financial Perspective Tue, 10 Aug 2010 00:18:33 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 Adjusting Value Propositions in Times of Crisis – Lessons For Banks http://www.5guineas.com/4/adjusting-value-propositions-in-times-of-crisis-lessons-for-banks http://www.5guineas.com/4/adjusting-value-propositions-in-times-of-crisis-lessons-for-banks#comments Mon, 24 Aug 2009 18:14:37 +0000 Admin http://www.5guineas.com/?p=4 When we talk about deriving customer value, it is imperative to consider two things: customer segmentation and development of value propositions. Value propositions signify what an organization or a customer values the most. This must be done by taking into account features which can reduce cost, hold on to valuable customers, draw new business and further profitability. The present recession has forced the banks to make adjustments in the levels of service and reduce costs by trimming down the lines of credit to keep the risk factor at bay. However, such an attitude can spell disaster for the banks in terms of goodwill. It will stir feelings that the banks are only partners to success and buckle down when the going gets tough.

Since development of value propositions plays a significant part in determining the profits, banks and other financial institutions should make an attempt to find out where the value lies. This will make the delivery mechanism more innovative and will provide the necessary returns to the otherwise unhappy shareholders. But, how about seeing “value” from the customer’s perspective? Sometimes, some customers may be over serviced and some under serviced due to a lack of understanding of value. It is important to understand customer behavior and how technology will affect the customer’s thinking to make good value propositions.

After designing value propositions suitable to both the customer and the financial institutions, it is time to implement them. The value propositions should be integrated into the institution’s configuration, orientation, information and operations. However, the number of value propositions will depend on the capacity of the bank. Therefore, it is wise to take into consideration a large segment of customers and deliver on them. This will lead to satisfied customers who will feel that the bank is truly concerned about them and cares for their well being. This will surely come to the rescue in times of crisis.

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