The Role of Relationship Marketing and Human Interaction in Sri Lanka’s Banking Sector
View(s):Amid the current economic crisis in Sri Lanka, discussions are ongoing regarding the models needed for recovery. This article explores the importance of adopting relationship marketing practices with a human touch in Sri Lanka’s banking sector. Spencer and Lawley (2006) argue that non-price competition, seen as a way to differentiate organizations, drives customer relationship management. Abeysekera and Jayakody (2011) highlight relationship marketing in Sri Lanka’s corporate banking sector.
Recent literature discusses the concept of dynamic capability due to changing market trends. Organizational resources are crucial for performance, and Fang and Zou (2009) identify customer relationships as key elements of marketing dynamic capabilities. Hou (2008) suggests that customer orientation is an important component of dynamic capability. A study conducted by the author on relationship marketing orientation in Licensed Commercial Banks (LCBs) in Sri Lanka involved in-depth interviews with fifty salespersons and fifty customers.. Various themes emerged, but this article focuses on the importance of relationship marketing’s human touch.
The “Human Touch” in Relationship Marketing
Some banks heavily rely on computer-automated services rather than the human element in their banking services. One entrepreneur in a handicraft business commented, “My Customer Relationship Officer (CRO) asked me to use the web to check my balances and use machines to deposit money or checks. But I do not like this. If he is my salesperson, he should help me because I do not believe in machines.” Similarly, a manager in a steel company stated, “I always like to come and talk to my CRO in person. Sometimes we need telephones, but not always when it comes to relationships.”
Clearly, customers prefer the human touch in their banking relationships. Many customers dislike depending solely on machines and prefer personal assistance even for simple tasks like balance inquiries. This preference may be due to cultural factors or a lack of IT proficiency. In Sri Lanka, personal touch and individual concern are critical in the banking industry, where banks offer standard and generic products. The real competitive advantage lies in unique and outstanding services. Literature suggests that close customer relationships in banking are rare and further weakened by increased self-service technologies (O’Loughlin et al., 2004). Therefore, it is necessary to use new technologies strategically as relationship facilitators (Sweeney and Morrison, 2004; Payne and Frow, 2005). However, the human element remains important.
Shemwell et al. (1994) argue that close personal relationships are easier among individuals than between corporate bodies and individuals. Weitz and Bradford (1999) emphasise the partnering role of sales representatives, who establish social bonds with customers. This aspect of relationship marketing warrants further research in the Sri Lankan context. Notably, customers of private banks are more inclined towards new technology compared to state bank customers, possibly due to a more visible technology-driven environment in private banks.
Customers consistently prefer contacting their CROs, considering them more important than other aspects of the bank. One customer said, “I am only concerned about my CRO in [Bank]. Whatever problem arises, I will contact him. I do not have time for advertisements or promotions, but I get all information from my CRO. I trust him and it is easy to work with him.” This sentiment is common among customers of both state and private banks, highlighting the significance of salespeople in the banking sector. Previous studies support this, showing that a firm’s marketing success largely depends on individual salespersons. Customer-oriented selling is critical for sales roles, focusing on applying the marketing concept at the exchange process level (Saxe and Weitz, 1982). Williams and Attaway (1996) emphasize that a firm’s marketing success is highly dependent on its sales representatives, who have the most immediate influence on customers. Researchers agree that customer satisfaction is vital for long-term business success, and salespersons’ customer-orientation levels are crucial for building customer relationships (Grewal and Sharma, 1991).
Conclusion
The findings clearly indicate that the human element is crucial in relationship marketing. Even though artificial intelligence and new technologies are transforming the banking and service sectors, it is crucial to also focus on the human touch component, considering the regional context and the sentiments of the people. The cultural and social nature of this argument can be studied under different themes in future research to understand the underlying realities of the phenomenon in Sri Lanka’s banking sector.
Selected References
Abeysekera, N., & Jayakody, J.A.S.K. (2009). Relationship Marketing perspective on salespersons’ Transformational Leadership Behaviour effect. Contemporary Management Review, 7(2), 143-156.
Fang, E., & Zou, S. (2009). Antecedents and consequences of marketing dynamic capabilities in international joint ventures. Journal of International Business Studies, 40(5), 742-761.
Grewal, D., & Sharma, A. (1991). The effect of sales force behaviour on customer satisfaction: An interactive framework. Journal of Personal Selling and Sales Management, 9, 13-23.
Hou, J. (2008). Toward A Research Model of Market Orientation and Dynamic Capabilities. Social Behaviour and Personality, 36(9), 1251-1268.
Saxe, R., & Weitz, B.A. (1982). The SOCO scale: a measure of the customer orientation of salespeople. Journal of Marketing Research, 19(3), 343.
Spencer-M, S., & Lawley, M. (2006). Improving customer service: Issues in customer contact management. European Journal of Marketing, 40(1/2), 218-232.
Weitz, B.A., & Bradford, K.D. (1999). Personal selling and sales management: a relationship marketing perspective. Journal of the Academy of Marketing Science, 27(2), 241-254
-Professor Nalin Abeysekera
(The writer is a Professor in Management Studies at the Open University of Sri Lanka. You can reach him on nalinabeysekera@gmail.com.)
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