Customer Management essay
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Banking industry is one of the most important service industries in the world. The industry involves many companies that provide banking services to people in the world. One of the greatest banking companies is Barclays. Barclays conducts its operations across Africa, North America, South America and Asia and it has about 50 million customers. Some of the banking services offered by Barclays include corporate and business banking, investment banking, wealth management, personal and premier banking and international payments (BARCLAYS). This essay discusses the various aspects of Barclay's customer management.
For any company to survive in the highly competitive banking services industry, the nurturing and maintenance of the customers is the only growth approach and it is achievable through the prediction and understanding the customers, behaviors, needs and decisions that are significant to the company's success. Barclays Company remains to maintain its strong customer base and management. This is being facilitated by various factors such as the intensive use of new innovations and technology, its flexibility in offering services, high degree of creativity, effective communications across the employees and customers and the establishment of contextual and core balances. The company is capable of adjusting itself in order to adapt to the varying times that a good foundation for the company to be admired by the customers (Leslie, H. and Ackrill, M. 2001).
Due to new competitors in the market and high demands for more convenient channels from its customers, Barclays bank turned to the use of the customer relationship management (CRM) which has helped the company to maintain close relationships with its customers who are in need of the financial and banking services that are offered by the bank. Also, this CRM assists the bank in the optimization of the marketing expenditures, execution of strategies, creation of effective dialogue with the customers and creation of customer relevance. All this aspects ultimately benefits the well being and health of the Barclays Company. The company has well planned strategies which focus on the customers and facilitates customer retention, sales growth and customer satisfaction. For instance, the company's salespeople are always encouraged to direct their focus and maintain close relationships with the company's key customers. These relationships are important and beneficial to the company as they result from more contacts with the company's customers to be in line with their varying requirements (Swift, R. 2001).
In efforts to foster development, the company has increased the data depth within the Barclays information warehouse. This is an improvement from the traditional method of keeping the company's customer information which was based on the individual account snapshots. The bank is in a position to easily determine the customers' behaviors over a period of time because the data warehouse contains detailed customer information which makes the bank to make reasonable interest rate charges on the basis of the company's risks assessment. The data warehouse has also enabled the company's marketing group to discover the trends in the historical information which enables them to develop customers' needs predictive models to proactively develop the company services. In addition, the company has a good understanding of activities, failures, weaknesses, marketing strategies and successes of their competitors in the banking industry (Swift, R. 2001).
Strengths of Barclays bank
The bank started long time ago and it enjoys the strong market penetration as it was able to open its branches in many nations in the world. The widespread of the bank's presence enables it to enjoy the associated economies of scale and also spread the associated risks. Barclays was the first bank to issue credit cards to its customers in the United Kingdom and it is reinforced by the various sponsorship deals such as the famous English premier league which has historically and continuously promoted the Barclay brand. Finally, the Barclays bank has used successive fraud combat methods using the security and fraud software. On the other hand, there are bank has some weaknesses in its operations. For instance, it has a very small presence in the Asian markets and it has limited plans to expand in Asia. The bank's services to some individuals especially the ones that are associated with the activities of ZANU PF have generated some controversial issues about the ethics of the bank (REMORPH, 2006).
Overall strategy of the company
To facilitate international competition, Barclays has strived to offer the customer services at a very high excellence level. This has assisted in the worldwide promotion of the company as an ideal business that can be relied upon by the customers. In order to achieve this, the Barclays bank has identified their target groups of customers and their respective needs and it has developed the services that are of high value to these customer groups. The bank has been updated along with the varying information technology requirements through a massive investment into the new technology levels that facilitates the provision of high quality services to the customers. For instance, the technological advancement has enabled the company to reduce fraud risks, effectively perform the routine tasks and it allows the banks managers to have up to date information hence giving them an opportunity to make better decisions and identify the customers and groups that are of high value to the company/bank. Finally, the advancement in technology led to the elimination of weaknesses in the practices of the company and minimizing the failures that negatively affects the customers thus reducing the excess unnecessary operation costs (Growth Strategies of Barclays Bank).
The market competition has made Barclays company to direct its focus on the identification of the best benchmarking practices. This strategy has enabled the company to understand its position in the market in relation to best practices and identify how to improve the management of customers and overall performance improvements. For example, the bank announced the launch of aggregate float adjusted index in the United States of America which was a benchmark of the dollar investment grade bond market that excluded the agencies and treasuries that were in the accounts of the Federal Reserve. This benchmark offered the investors the market value weighted index which was a complementary option to the American aggregate index (BARCLAY CAPITAL, 2009).
Porter Five Forces - Analysis of Barclays
The porter's five forces tool assists in the understanding of where the Barclay's business power lies and it enhances the understanding of the bank's competitive position. The forces that determine the Barclays situations include supplier power, threat of substitutes, barriers to entry, buyer power and rivalry (Scribd).
i. Entry barriers
In other countries such as India, the governments and central banks controls and regulates the interests on various banking services thus barring the entry of foreign banks into these countries' markets. For instance, the Barclays brand name is not widely recognized as many customers in these countries are forced to invest in government sectors hence the Barclays bank fails to tap the customers in these countries (Scribd).
The rivalry among the competitors is one of the major challenges that face the Barclays bank. However, the bank has good strategies for accessing many customers in rural areas especially in Africa. For instance, it has a stake in ABSA (absa promotes online banking) which assists them enhance the visibility of their brand, access and provide services to many rural customers (Scribd).
iii. New entry threat
Barclays faces a stiff competition from other financial companies and microfinance institutions which offers cheap services to customers. These institutions have a better access to many customers as they work at ground level. Since Barclays is a non listed company, the customers have enormous bargaining power in the market hence attracts many customers. The bank offers quality services to its customers such as free credit cards and e-banking (Scribd).
The bank's strengths include services diversification, several income sources, more distribution channels and good brand strategies such as the football leagues. The improvement of the operations in America and Europe and accessing new Asian market are some of the banks opportunities while the threats include exposure to financial market risks, differences in government policies in different countries and competition from other companies. Finally, the major weakness of the bank is the integration of its operation in the whole world (Scribd).
Barclays Company has a brand name that gives it a good intellectual property and enables it to have a good reputation towards its customers in the market. The brand name has also made the bank to retain its strong competitive advantage which has enhanced trust in the company's customers. Currently, the company's brand name and intellectual property is in the forefront in the internet which makes it possible for the customers to take the advantage of this situation. The electronic business enables Barclays to protect its securities online (Bainess, P., Egan, J. and Jefkins, F. 2004)
Barclays' relationship marketing
Relationship marketing in Barclays Company has created a strong relationship with the customers. The company has developed long term relationships with its customers since it is comparatively cheap to sale the services to the existing customer than to new customers. The Barclays' relationship marketing has made the customers to receive more from the company as compared to other competitors and it has made the customers to remain royal to the company. Also, it has made the company's customers to have a sense of well being as they have relationships that are long term (Szmigin, I. 2003).
The achievement in technology such as the effective use of customer relationship management and electronic business has promoted the Barclays Company marketing practices and perceptions. The Barclays' marketing services are of great emphasis on the customers. The quality and quantity of the Barclays company services have increased and thus the modern customer management has become the most favorable practice.