Obstacles to upgrading customer value‐in‐use in retail banking
Abstract
Purpose
Improving capability to generate value for customers is seen as a way to create a new competitive edge, but developing the related organisational capabilities involves facing several obstacles that stem from the producer‐orientation of the retail‐banking business. This paper aims to focus on defining and describing those obstacles.
Design/methodology/approach
An in‐depth, qualitative single case study of a European retail bank was conducted.
Findings
A retail bank can find it challenging, first, to understand the deepest meaning and character of customer value and, second, to harness the organisational attributes to deliver that value. The main barriers lie in the strong producer‐oriented way of doing business, a lack of employee commitment, a strong product and sales orientation, a restrictive network, difficulties in seeing the profitability aspect of a new mindset, lack of conceptualisation and proper segmentation, and finally, silo‐style bank organisations.
Research limitations/implications
The research is focused on the retail‐banking industry, while the findings are transferable to other retail finance businesses.
Practical implications
Enhancing value creation may provide a competitive edge, but developing that edge means facing several obstacles, which may jeopardise the calculated positive return on investment. For management, understanding the value of the banking service in the customer's own context is critical.
Originality/value
Developing customer experience and value‐in‐use has been suggested as a good starting point for customer orientation. However, research on its implications for organisations and potential obstacles to implementation remains scarce. This paper offers a detailed view on the organisational development necessary to generate value‐in‐use in a retail‐banking context.
Keywords
Citation
Lähteenmäki, I. and Nätti, S. (2013), "Obstacles to upgrading customer value‐in‐use in retail banking", International Journal of Bank Marketing, Vol. 31 No. 5, pp. 334-347. https://doi.org/10.1108/IJBM-11-2012-0109
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited