Abstract
The mature, yet sound banking industry in South Africa is being disrupted by the information age, demanding and informed millennials, sluggish economic growth and new entrants rivalling traditional norms. To attract and retain bank clients, value proposition as a strategic tool can be applied to meet customer’s changing banking demands but also to meet the bank’s strategy for higher and sustainable profits. Value proposition provides a platform where customers’ needs can be addressed through a holistic relationship with their bank and ideally banks are able to establish an all-inclusive view of the customer. The study reveals that the bank under study is employing value proposition as a high-level strategy, and not only as a marketing strategy to optimize profits and advance customer relations. However, the realistic conditions and challenges that the bank faces in the implementation of value proposition strategy are not as simplistic as its strategy, and this research depicts such findings. Therefore, instead of applying a marketing lens to value proposition, this study presents a unique demonstration of value proposition as a business strategy. Using an interpretivist approach, qualitative research was employed to interview fifteen relationship managers in one mature South African bank. Key findings revealed that the bank was considered reactive and banking customers were price-sensitive. While the bank is attempting to embrace technological change, service levels are declining. Findings were grouped into four themes and it was uncovered that the bank’s attempts at value proposition, are still bank centric, and not customer centric. Recommendations are based on strategic literature and findings so as to meet the identified challenges. Recommendations are to enhance the bank’s information systems and relook current value proposition strategies to improve the bank’s position in the market. This research contributes theoretically by adding to the body of knowledge on value proposition as a strategic business tool. The practical contribution is that relationship managers as implementers of strategy become aware of the critical role they play in understanding the perceptions of value proposition from the customer’s points of view.