Banking · Retail Banking Principles
When a bank successfully implements a 'Total Relationship Value' (TRV) approach for its retail customers, what is the primary impact on customer retention and per-customer profitability?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Customer retention remains unchanged, while profitability increases solely through reduced branch staff costs.
- 2Both customer retention and profitability decrease because of high discounts on products.
- 3Customer retention increases as switching costs rise, and per-customer profitability increases due to diversified income streams.✓
- 4Customer retention decreases due to product overload, but profitability increases due to high processing fees.
Correct answer
Customer retention increases as switching costs rise, and per-customer profitability increases due to diversified income streams.
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