Critically Optimising a Relationship Marketing Programme: The Case of a Commercial Bank

The increased extent of marketing in the banking industry calls for the need to judge the appropriateness of marketing programmes more critically. However, optimising such programmes in terms of the mix of marketing activities... [ view full abstract ]

The increased extent of marketing in the banking industry calls for the need to judge the appropriateness of marketing programmes more critically. However, optimising such programmes in terms of the mix of marketing activities represents a daunting task. An analysis of research revealed models developed largely focus on the optimisation task, but fail to present an holistic view. While adopting a systematic approach, this paper develops a model for judging the appropriateness of the relationship marketing programme from the optimisation standpoint. As such, relationship marketing programme optimisation is treated as a complex problem consisting of three partial problems: forming an optimal relationship marketing programme, measuring return on relationship marketing activities and calculating costs of relationship marketing activities. The methods applied: integer programming, multiple regression analysis, factor analysis, and heuristic algorithms. The R package was used for analysis. The model was tested by experimental modelling using large-scale data on 40,000 SMEs provided by a bank. The results showed a dramatic increase in efficiency when optimising marketing decisions by applying the model. This paper is among the first to present such an holistic approach and to offer an original framework. This will benefit researchers and practitioners seeking solutions to this challenge.