Relationship Marketing in Retail Banking: Organisational and Strategic Implications for Future

In the global financial world, strong competitive pressure has forced banks to revise their marketing strategies. Over the past fifteen years, banks have moved from managing accounts to managing customers. The relationship between banks and account holders which, in the past, was rather ‘administrative' has evolved to become a more client–supplier relationship. This on going revolution, further propelled by the Internet, gradually places the customer at the heart of the marketing problematic and gave rise to one ‘key development of modern marketing science' called relationship marketing, which consists of establishing durable relationships with customers or groups of customers selected according to their potential contribution to the success of the company. The objective is to win over these clients and create customer loyalty thanks to a win win relationship. But the adoption and the implementation of such an approach exert extraordinary pressure on the ‘traditional' model of organization and require a major, in depth transformation, unusual because of its amplitude and reach, which can be described as true organisational innovation. Indeed, the entire organization of the firm must be customer oriented. The success of relationship marketing is crucially linked to the quality of the firm's strategy rather than to the degree of financial investment at technological level. However, there exists a vacuum in the literature on the relation between relationship marketing and organisational innovation. The goals of this paper are three fold: first, it proposes a more comprehensive understanding of the organisational innovation phenomenon applied to the concept of relationship marketing; then, it observes the evolution of the adoption of relationship marketing in French retail banking in order to understand the processes which make it possible for banks to move away from transactional management to relationship management, from a product orientated marketing to a customer orientated marketing; finally, it identifies the key factors of success and the boundaries of relationship marketing implementation. In depth interviews with marketing managers in the French banking sector were conducted to test the relevance of this framework. The results are presented and a number of important implications are discussed. These findings provide a basis both for further directions in research and for managers involved in developing and implementing relationship marketing in the financial world.