Wednesday, December 4, 2019
Great Dakota Bank Online Banking
Question: Discuss about the Great Dakota Bank for Online Banking. Answer: Introduction: From the case of Great Dakota, three main factors determine the customers' lifetime value namely; a) The customers' acquisition cost, b) The revenue generated from the customers per annum, and c) the length of the customers' relationship with the bank. During the six-month marketing period, the bank added 70,500 (11750*6) customers while the existing customer who migrated from offline to online services were 12,000 (4000*0.5*6) (Frei Moon, 2006). Lastly, the new customers who signed for the online services were 11,985. The costs associated with the marketing campaign were as follows: a) advertising campaign at $2,000,000; b) Free online services at $ 4,077; c) the price of cash sweepstakes $ 200,000; and d) the cost of accrued fees awarded to customer would be $50,000 (assuming that an average of $25 is awarded to each customer). Therefore, the total cost of acquiring each customer was $27.32 (Frei Moon, 2006). Although the online service is a good initiative, the customers lack awareness and are skeptical about its usefulness. This is evident because 60% of the bank's offline customers have concerns about the service. Lastly, it was difficult to gain customer loyalty (Frei Moon, 2006). The bank should continue with the current marketing campaign. However, the following adjustments should be made: One, reduce the fee to increase the online customer base. Two, allow one-time gift for the first-time transaction conducted online to attract more customers (Gianiodis, 2014). Three, make its website more user-friendly, more secure and more reliable to increase its effectiveness. And, four make the bill payment services free this would act as a key feature of its online banking services (Gianiodis, 2014). References Frei, F. X., Moon, Y. (2006). Great Dakota Bank: Online Banking. Dakota: Havard Business School. Gianiodis, P. T. (2014). Open Service Innovation in the Global Banking Industry: Inside-Out Versus Outside-In Strategies. Academic Management Perspect.