CUSTOMER INTIMACY

Customer Intimacy

Customer Intimacy

Introduction

The relationship between banks and small and medium-sized enterprises (SMEs) has long been a source of interest and concern in both academia and practice because SMEs are recognized as being increasingly important to the growth of the economy. In addition, the large majority of SMEs are predominantly dependent on bank financing. During the past few decades, the banking industry has undeniably experienced intense competition throughout the world. Customers, in particular corporate customers, who have been traditionally reluctant to switch banks, are in today's turbulent market more demanding and more willing to switch banks if they are offered better services elsewhere. From this turbulence, strategic questions have emerged regarding how banks should differentiate themselves from their competitors.

Because products are easily copied in the financial industry, and the processes involved are virtually identical, relationship-marketing (RM) strategies have been suggested as important strategic tools for banks to better position themselves in their market and to secure continued banking relationships. In particular, cultivating close personal relationships has been claimed to be important in helping banks develop favorable images in the eyes of their SME customers. Most customers evaluate the whole relationship, rather than separate product offerings. Therefore, the customers' image of a firm greatly depends on how the firm has managed its relationships (Moormann, 2007, 112-24). Indeed, in a service industry such as corporate banking, the management of corporate image (CI) has been suggested to be an important strategic issue for most banks.

Research has conceptualized CI mainly on a company or product level, regarding it as a management issue built through coordinated marketing campaigns and corporate advertising. In this study, CI is conceptualized on a relational level - that is, as customers' overall perceptions of an organization's ability to manage its customer relationships (Riding, 2009, 241-8). Hence, the present study stresses the relationship between CI and RM. The present study contributes to the existing body of knowledge by proposing that image in a banking context is highly dependent on relationship management. Indeed, in an increasingly competitive financial sector, banks must be fully aware of the image that they are presenting to customers through their interactions.

Discussion

Relationship Marketing and Corporate Image

The RM paradigm relies on a philosophy advocating long-lasting relationships with customers and continual satisfaction, which involves a degree of emotional commitment, intimacy, collaboration, and interdependence, defines RM as a process that moves from identifying potential customers to establishing, maintaining, and enhancing the relationship that has been created (Vanhoof, 2009, 27-37). Similarly, who has explored the state of RM in services marketing, considered RM as a strategy used to attract, maintain, and enhance customer relationships. Consequently, relationship management is a fundamental aspect of the RM approach, emphasizing the importance of being customer centered.

The theory of RM conceptualizes marketing as an exchange relationship marked by interactions between a firm and its customers. In interactions with customers, employees are constantly transmitting an image of the firm. Hence, how customers are treated when they interact with bankers influences to a high degree their perceptions about the organization ...