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Non-financial drivers of customer profitability in personal retail banking


The first of its kind in the public domain in New Zealand, this study presents an empirical analysis, for one bank, of non-financial factors that help generate profitable customers. Just over 1,100 personal retail customers of a New Zealand regional bank were surveyed and these customers' contribution to the bank's revenue and costs for three months were calculated using activity-based accounting procedures. For that period, one third of the bank's customers were unprofitable, one third hovered around breakeven and one third contributed 98 per cent of customer profit. In general, the greater the share of a customer's banking business, the more profitable that customer is to the bank. The overriding theme is that customers are assets and can be managed accordingly. The distribution of customer contribution is discussed along with its implications for the study bank and retail bank marketing in general.

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Correspondence to Ron Garland.

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Garland, R. Non-financial drivers of customer profitability in personal retail banking. J Target Meas Anal Mark 10, 233–248 (2002).

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