How interactive marketing is changing in financial services

Abstract

Purpose This paper aims to explore the impact of the internet and related information and communications technology developments on how financial services (FS) are distributed and how customers are managed, in particular, not only how companies can differentiate between “good” and “bad” customers and manage them appropriately but also how customers can be “bad” and escape the consequences. It also explores how changes in information asymmetry between suppliers and customers affects who gains or loses from the relationship between them. Design/methodology/approach The data for the article are from the authors’ consulting and conference chairing experience. The article is in the form of a reflection on this, rather than a hypothesis-based research article. Findings One of its findings is that those responsible for controlling damage done to companies by fraudulent or negative value customers (typically those managing underwriting or risk) and those responsible for recruiting, retaining and developing customers (typically marketing, sales and customer service) do not work closely enough together, and this can lead to not only damage to shareholder value but also damage to the customer experience. Research limitations/implications The paper identifies the need for more research covering the processes, data, analysis, systems and strategies required to manage both good and bad customers and the practical problems of implementation. Practical implications The main practical implication is that in designing products and the customer service experience, FS marketers need to take into account much more systematically the “dark side” of customer activity. Originality/value This paper is one of the first to explore its issues in detail.