Acquiring and retaining customers in UK banks: an exploratory study

Abstract

This paper explores how traditional banks1 in the UK are managing customer acquisition (CA) at the same time as the retention of profitable customers. In spite of the interest of UK banks in retention, new customers often receive more favourable prices and conditions than existing customers, suggesting that acquisition may dominate. To explore the balance between acquisition and retention and to discover marketing activities that might support both, semi-structured interviews were conducted with a small sample of senior bank staff in the UK. Analysis of the interviews, using computer-aided software indicated that banks are indeed trying to manage acquisition with retention but encountering a range of difficulties as they revisit long-held strategies. The study also suggests seven activities that might contribute to a better balancing of CA with retention. By seeking expert management opinion through a qualitatively based study, this research proposes a preliminary framework of marketing activities that support both acquisition and retention.