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How do Banks Motivate their Customers?

By Chantal

There are a number of factors that have been analyzed and seen to affect bank selection by a consumer. The information gathered by the studies to determine consumer behavior are essential for the different banks to develop marketing strategies which will permit them get new customers on one hand and keep those already using the bank. Today, there are so many financial institutes that render basically similar financial services which means a financial institute has to identify or bring out the little points that will make the consumer chose their financial institute.

From the studies carried a series of repeated factors were observed which serve as motivation factors towards consumers and here are some of them;

-           the location of the bank from the consumer, this is with respect to the distance of the bank from the consumers home or his business place;

-          the quality of the services offered by the bank in terms of being fast in attending to the consumer problems and executing operations;

-          the environment where the bank is located should be save and responsible,

-          the employee behavior towards consumers,

-          the loan rate and payment plan,

-          the point of view of friends and relatives;

-          confidentiality of the bank,

-          the reputation of the bank,

-          how long has the bank kept a good financial system,

-          the availability ATM services at many locations, operating 24 hours a day and 7 days a week.

The factors listed above satisfy the criteria of so many people in search of a bank. In the banking sector the attributes that seek to motivate the consumer have been grouped into different categories and will include the services that the bank offers to attract customers and the facilities the bank has in order to keep an efficient staff to continuously provide efficient services.

The two-factor theory

This theory is also known as the Herzberg’s theory and the dual-factor theory. This theory state’s that the satisfaction obtained in a work space depends on certain factors, and in the same like another set of factors will cause the job dissatisfaction. This theory of categorizing the services offered by an institute based on a set of factors around the work space was introduced by a psychologist Frederick Herzberg. The connection of the attitudes of a consumer and its link to the mental health of the industry was made known by Abraham Maslow in his theory of motivation. On the other hand the Herzberg theory addresses issues like satisfaction of the workers, referring to the needs of the worker at his job side if they are of lower-order (like the minimum salary received by the workers and the conditions of work at their job side). In the Herzberg theory it is seen that the efficiency of a worker comes when he feels that his mind is pleased, and this will keep him psychologically upright to operate well. The gratifying needs here include the acknowledgement of the worker’s achievements, giving him more responsibility, the need for promotion as it keeps in his mind that he is advancing. This makes him more efficient in servicing customers.

The purposes raised by the Herzberg theory are parallel to that of the Maslow’s theory whose main aim discusses on the need of hierarchy. There is a new scope added by the Herzberg theory on this as it identifies a set of factors or a set of job characteristics that leads to the satisfaction of the worker at his job side and another set of job incentives that will make the conditions at work dissatisfactory to the worker. This Herzberg theory is known as the two-factor model of motivation.

Impact of the Herzberg theory in the financial institute

The satisfaction of the working conditions of the worker plays on his psychology and hence affects the way in which he will attain to customers. In the financial institutes the worker is the person directly in contact with the customer and his behavior towards the customer like quality of the services rendered can serve as a motivational factor for the customer to remain in this bank. Using the Herzberg theory approach by the management of the financial institute, they can increase the satisfaction of the job in their financial institute by modifying factors that play on the nature of the work itself like giving to the workers a plan of work that if they follow they will grow in their status in the bank, giving them positions of responsibility, and the opportunity for them to have their personal realization. On the other hand dissatisfaction can be reduced by the management; like supervising the quality of job done and creating friendly working conditions.

Motivation techniques

Many financial institutes when they have achieved great status and reputation in the operations they do, there is the possibility of failure and loss of customers. In the process of maintaining the success status, the bank uses motivation techniques to keep the workers efficient and to draw towards them more customers and keep the existing customers. Motivation techniques use the study of human needs so that the bank will work on these needs to come out with solutions that are long lasting. This will permit the bank to keep the successful image through its services. According to Rigors and Myers (1973), there is inner motivation that comes when the bank makes meaningful profits and the manager uses some of this money to develop the areas of difficulty affecting customers. With the advancement of this theory, Rigors and Myer gave a number of pronouncements which are important for the bank to use to reinforce or they seek to stimulate the motivate consumers. These points include;

-          the uniqueness of wach motivation strategy adopted.

-          Making sure that the motivation technique used goes to satisfy the totality of the customers and not only a part of them.

-          Recognize that innovative ideas come from inside any individual.

-          It is possible to predict and determine every behavior but it is not possible to motivate every behavior.

Type of motivation techniques

From the Herzberg theory and other existing theories on how to motivate consumers especially in the banking sector, one comes to the question of how can a bank actually do to please all its costumers? This is the question to answer because a particular approach may not satisfy all the customers so some of the motivation techniques used are

  1. 1.     Money

Money can be considered as a motivation technique towards the customers. It can be in the form of a corner benefit, in the form of a discount, a bonus given to a customer on transaction or this could be another form of gift given to the customer because he is faithful to the bank. The availability of money in a bank institute can be used as a motivation technique. The money can be used to ameliorate the infrastructure and security measures of the bank in terms of software and save keeping of funds. This guarantees the customer of the safety of the money. Money in the financial sector can be used to keep a well-trained and qualified staff so that they keep a better customer to bank relationship and therefore motivate the customers to use the financial services offered by the bank.

  1. 2.     Participation

     This motivation technique falls under the Herzberg theory and consist of making the customer aware of the products that the bank offers including promotion. Making the customer participate will be a way of motivating the customers to keep using the bank. On the side of the worker, motivation is in the dedication with which each employee has at his post. This dedication in turn attracts customers who knows the bank does it best to satisfy their financial needs. This kind of motivation technique has yielded very good results because it motivates both customers and the employees.

  1. 3.     Job enrichment

This is a motivation technique that uses an application of Hertzberg theory of satisfaction consisting of detecting the challenges faced by the workers, recognizing the various achievements of the workers and how they are responsible will serve as good motivators. Using the motivation technique of job enrichment, the employer turns to build positions in his bank in terms of how challenging the task of the position is in relation to the qualification of the employee that will fit into the position to yield high efficiency. There are a number of ways to use this motivation technique:

  1. Making it possible for customers to be part of the decision making process.
  2. Involving the staff in the growth of the bank and creating an atmosphere in which the customer and the employee can interact in order to share ideas and solve the mutual problems of concern between themselves.
  3. There is need to make the customer feel that he receives compensation and special treatment for using the services of the bank.
  4. In the same like it is important to make the customers know that the suggestions and problems they detect in the bank functioning actually helps the bank to progress.  This creates a feeling of customer’s patronage and will motivate the customer to be faithful to this bank that recognizes his value.

Staff motivation

Studies have shown that there is a link between rewards and staff motivation and the productivity of the staff that will lead to better services towards the customers to motivate them use the services of the bank. In this like there are two types of rewards in staff motivation; the intrinsic reward and the extrinsic reward. Staff motivation plays a great role in the growth of the financial institute because the less the staff is motivated the less the productivity. To meet this short coming the bank can use the two-factor theory of Hertzberg that is to create job satisfaction. Among the factors we have

Acknowledgment of the staff achievement

Staff motivation is boosted by simply acknowledging the efforts they put day by day to see the bank in good health and that the desires of the customers are met. This gives them self-esteem and this can be done by giving them little rewards like employee of the month.

Financial security

The basic drive for people to look for money is the need of financial security.  When the management ensures financial security to its workers like in the case of payment of salary during ill health, this serve as a motivational factor.

Provide the opportunity to socialize

Staff build up a team spirit when the employer create social activity among members of the staff like a soccer games. This will increase the relationship between them and help in the staff motivation.

The introduction of mobile banking

Mobile banking is one of the motivational factors that the bank uses to attract customers. The stimulating factor that leads to the creation of mobile banking was to make banking easier, enjoyable and at the same time empowering the customer.

BankMobile, The motivational factor here is that customers can carry out checking and their saving using their mobile phones. The ease with which the customer signs up for the BankMobile is another motivational factor.  This works by uploading the picture of his driver license in addition to other information that will be asked. In this service of banking, the assets of the customers are protected.

Fee free

The knowledge of the customer in a BankMobile that there is no fee to pay for most of the banking services them serves as a motivational factor for customers to use this service of the bank. In addition to that if the customer wants to redraw physical from his account he can use the free ATMs of the Bank Mobile which is surcharge.

Using mobile banking to pay bills

From our homes or anywhere the platform offered by banks can be used to pay bills like electricity and water making the users of this banking service avoid wasting time cueing up to pay bills. It is easy and secured. Thus this serves as a motivational factor.

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Herzberg theory, Herzberg theory, Motivation Technique, Motivation Technique, motivational factors, motivational factors, staff motivation, staff motivation,

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