Keyword

Value Added Services, redemptions, utilisation, qualifying, customer base, South African banking industry

Abstract

Traditional banking methods evolved and included services as a method of differentiation, reducing operating costs, and providing additional benefits to the customer. Banks re-invented themselves and provide innovative solutions to remain competitive. This research explores whether using value added services contributed to changes in transactional banking behaviour and was done in one of the largest banks in South Africa over a period of four months. Two banking products in the youth customer segment were selected.  The control group received one treatment at the beginning of the four-month period, and the experimental group received a further three treatments at different times of each month. Two data sets (1) VAS usage and (2) bank transactions were analysed. The results showed that the intervention had a positive effect on transactional banking behaviour. Additional causative factors were identified that increased the usage of value-added services and increased transactional banking behaviour.


Full Text : PDF

References
  • Al-Rabayah, W., Khasawneh, R., Abu-Shamaa, R. & Alsmadi, I. (2017). Strategic uses of social media for improved customer retention, Hershey: IGI Global: Business Science Reference.
  • Bazargan, A., Zolfaghari, S. & Karray, S. (2017). Modeling reward expiry for a loyalty program in a competitive market. International Journal of Production Economics, 193: 352-364.
  • Braciníková, V. & Matušínská, K. (2016). Marketing communication of brand in the financial service brand communication. Marketing Identity, (2): 39-53.
  • Bruneau, V., Swaen, V. & Zidda, P. (2018). Are loyalty program members really engaged? Measuring customer engagement with loyalty programs. Journal of Business Research, 91: 144-158.
  • Buszko, M., Krupa, D. & Chojnacka, M. (2019). Young people and banking products and services in Poland: The results of empircal studies. Ekonomia i Prawo, 18(2): 147-164.
  • Chan, K., Tsang, L. & Chen, J. (2017). Marketing bank service to youth in China. Young Consumers, 18(3): 278-289.
  • Chaudhuri, M., Voorhees, C.M. & Beck, J.M. (2019). The effects of loyalty program introduction and design on short- and long-term sales and gross profits. Journal of the Academy of Marketing Science, 47(4): 640-658.
  • Chua, W.F. (2019). Radical developments in accounting thought? Reflections on positivism, the impact on rankings and research diversity. Behavioral Research in Accounting, 31(1): 3-20. doi: 10.2308/bria-52377.
  • De Jager, A. (2015). Why invest in the youth? Internal Bank Z report: Unpublished.
  • Dorotic, M., Verhoef, P.C., Fok, D. & Bijmolt, T.H. (2014). Reward redemption effects in a loyalty program when customers choose how much and when to redeem. International Journal of Research in Marketing, 31(4): 339-355.
  • Hefner, D., Knop, K., Schmitt, S. & Vorderer, P. (2019). Rules? Role model? Relationship? The impact of parents on their children’s roblematic mobile phone involvement. Media Psychology, 22(1): 82-108.
  • Hoffman, B. (2019). The role of advertising in shaping children’s preferences of consumption. Trakia Journal of Sciences, 17(2): 115-124.
  • Kalbach, J.S. (2016). Mapping experiences: A complete guide to creating value through journeys, blueprints and diagrams. s.l.:O'Reilly Media.
  • Kumar, S. & Suresh, G. (2017). Effetiveness of value added services in public sector banks - a factor analysis. International Journal of Research in Commerce & Management, 8(10): 19-24.
  • Kumar, V. & Reinartz, W. (2016). Creating Enduring Customer Value. Journal of Marketing, 80(6): 36-68.
  • Löbler, H. & Wloka, M. (2019). Customers' everyday understanding of 'value' from a second-or cybernetic perspective. Journal of Marketing Management, 35(11/12): 992-1014.
  • Mahalakshmi, V. & Saravanaraj, M.G. (2013). Customers’ perception about value added services rendered by banks. African Journal of Business Management, 7(29): 2845-2851.
  • Nastasoiu, A. & Vandenbosch, M. (2019). Competing with loyalty: How to design successful customer loyalty reward programs. Business Horizons, 62(2): 207-214.
  • Nevskaya, Y. & Albuquerque, P. (2019). How Should Firms Manage Excessive Product Use? A Continuous-Time Demand Model to Test Reward Schedules, Notifications, and Time Limits. Journal of Marketing Research (JMR), 56(3): 379-400.
  • Roberts-Lombard, M. & Paramasur, S.B. (2015). Consumer Behaviour. Claremont: Juta and Company.
  • Salem, M.Z., Baidoun, S. & Walsh, G. (2019). Factors affecting Palestinian customers’ use of online banking services. International Journal of Bank Marketing, 37(2): 426-451.
  • Watson, G., Beck, J., Henderson, C. & Palmatier, R. (2015). Building, measuring, and profiting from customer loyalty. Journal of the Academy of Marketing Science, 43(6): 790-825.
  • Wijland, R., Hansen, P. & Gardezi, F. (2016). Mobile nudging: Youth engagement with banking apps. Journal of Financial Services Marketing, 21(1): 51-63.
  • Yin, R.K. (2018). Case study research and applications: design and methods. 6th ed. Sage Publications, Los Angeles.
  • Zhang, A. (2017). Data analytics: Practical guide to leveraging the power of Algorithms, data science, data mining, statistics, big data, and predictive analysis to improve business, work, and life. CreateSpace Independent Publishing Platform