Customer Acquisition and CustomerRetention in the Financial Services Industry

In a world of enormous technological developments and increasing competition between financial servicesproviders customer acquisition and customer retention becomes more and more important. In this paper the authorsuse a micro-economic model to analyze the circumstances when and why customers change their financial servicesprovider and what parameters influence this decision. The results of this analysis are interpreted in the context ofinformation technology (IT) projects of financial services providers, explaining why IT-enabled/IT-supportedpersonalization and customer lifetime value analysis is crucial for sustaining profits in the middle and long term...