Question 1: What is Jyske Bank’s new positioning or competitive differentiation strategy?
Ans:
The Jyske Group is Danish bank that is owned and operated as a business. The company attaches great importance to treating their three groups of stakeholders- shareholders, customers and employees – with equal respect. If the balance shifts in favor of one or two of the groups, this will be to the long-term detriment of all groups (Zeithmal, Bitner and Gremler 1996).
The bank’s core values are its fundamental cornerstone. In the eyes of both clients and employees, the following traits are what make Jyske bank unique:
• Common sense
• Open and honest
• Different and unpretentious
• Genuine interest and equal respect
• Efficient and persevering
These same core values led Jyske management to re-evaluate how the bank did business with its customers. The managers knew that if they were to stay true to these values that they would have to change their conservative position of the past and become a service driven and customer innovative bank within the competitive banking sector. The bank managed to achieve its new customer orientated position based on three fundamental areas:
Positioning
In a highly competitive banking sector, managers looked to the bank’s core values and differences to establish its competitive position. The bank with the help of a consultant conducted market research into their primary target market. The research findings showed the target market consisting mainly of Dutch families (60% retail) and small Danish businesses (40% commercial), were favorable towards the idea of bank that had a persona and believed in what it stood for (Zeithmal, Bitner and Gremler 1996). Additional research was also conducted in more difficult areas concerning the banks 4P’s- Product, Place, Price and Promotion from a customer orientated standpoint. In contrast, soft factors such as customer relationships with the bank, served as the bank’s main point of competitive differentiation.
In addition, Jyske bank concentrated on service innovation and developing tools to support solution based service delivery. For example: IT systems helped employees take customers through processes to determine needs and find solutions.
To avoid higher costs of maintaining certain customers, Jyske bank utilized demographic segmentation to it benefit. They also charged a higher premium and targeted only customers less likely to be a credit risk.
Finally, the bank decided to embrace its own ‘Jyske’ persona and personality as part of its new competitive positioning even though they knew what price that came along with being purely Jyske.
Question 2: What changes did the bank make to get its new position? What effect did these changes have?
Ans:
For getting the new position, the Jyske Bank changed its both tangible aspects and intangible aspects, which lead a positive change in the mind of customers.
Tangible Aspects
Although the bank’s core products remained similar to other Danish banks, they way they delivered the service changed. This required significant changes to both tangible and intangible aspects of the bank.
The bank began offering a more personalized service to its customers by assigning each customer a branch employee. Overtime, managers saw that this created problems due to nature of the branch employee job to serve many customers and therefore could not dedicate individual attention to one employee. The solution was more efficient customer orientated account teams, where each customer was dealt with by a small team of branch bankers on an individual one to one basis.
In terms of branch design, the bank spend 750 million to physically re-design its branches, so it looked more like a advertising agency or a small hotel and changed the way customers interacted with bankers (Zeithmal, Bitner and Gremler 1996).
The smaller details is what differentiated Jyske bank the most. For example, hiring a professional photographer to take photos of bankers business cards and then editing the photos slightly with a yellow tint, to give a more family feel gave the notion that bankers were part of the community just like a customer and not someone in authority wearing a uniform.
Intangible Differences
Delivering on the bank’s new competitive positioning also required changes to the intangible aspects which are not visible to customer.
Before any branch was redesigned, all staff took part in special training sessions such as teambuilding and customer service sessions, drawing on best customer practices from the retail sector.
Jyske management strongly believed that value is created through decisions and encouraged empowerment of not only employees but also of the whole branch, with the managers to set the example through their leadership and management style.
Additionally, with documentation, training and legal documents all centralized at the bank’s headquarters it allowed human resources to be more active in dealing with human issues and even enabled them to outsource their
problem solving skills as HR professionals in the field (at a regional level) for a fee. This service was at the cost of the bank branch if they needed it, but was not compulsory.
Question3: Analyze Jyske bank’s success using the service quality gaps model found in Chapter 2. What are Jyske Bank’s strategies for closing the 5 gaps in the model?
Ans:
Customer gap:
← Pro-active approach to anticipate customer expectations and satisfy them accordingly
← Effective design strongly reinforced by standards
← Motivated employees, backed by strong HR policies delivering
← Exceeding customer expectations
Knowledge gap:
← Market research to find out about Jyske Bank’s core target markets
← Shift from traditional product focussed selling to a customer-solution approach, due to customer expectation of relationships
← Core values: common sense, openness and honesty, being different and unpretentious, genuine interest and equal respect for people; and efficiency and perseverance.
← Account teams for service recovery
← Improving upward communication by reducing gap between contact person
and top management, thus improving customer experience
The Service Design and Standards gap:
← Tools to support solution-based service delivery
← Focus on customers less likely to pose credit risk
← Assigning each customer to an account team
← Architectural and design changes in branches – changing the way customers interact with bankers
← Streamlined approval process in line with customer expectations
The Service Performance gap:
• Effective HR policies
• Training related to Jyske values
• Selection for skills as well as service mindedness and organizational culture fit
• Monetary incentives like stocks, annual raises
• Employee empowerment throughout bank
• Customers with full knowledge about roles and responsibilities thanks to contact point
• Competitive positioning –shift from hard to soft factor
The Communication gap:
← Open and honest communication among core values of Jyske Bank, as well as genuine interest and respect for people
← Effective customer expectation management through all levels of management
← No overpromising in advertising or personal selling
← Efficient horizontal communication through empowerment of employees
← Communication reinforced Jyske values and differences
← Communication via strategic meeting to diversify shareholders and increase their number
← Communication to motivate employees to work harder
Question 4: In your Opinion Can Jyske Bank sustain its growth and success? Would you invest in jyske bank?
