Marketing
is the activity of finding out what the customer wants to buy or
consume and is a support function for sales. The aim of marketing is to
know and understand the customer so well that the product or service
fits the customer’s needs. Thus, Interest Free Banking is a new business
initiative that accepts deposits and offer financing on the basis of Shariah modes.
Lawful, Asset-backed, deliverable, transparent, good faith
Reputational risk if misrepresented as a Shariah compliant product
Price
Prices must be fair & cannot be unfair
Self-operating price mechanism
Shariah does not allow prices to be fixed
Prices are based up on supply and demand
Prohibition of false prices, artificially increasing prices,
Promotion
All false assertions, unfounded accusation, false testimony is prohibited
Reputational risk in false promotion
Prohibition of misleading advertising and/or misleading sales tactics
No sexual appeal, use of women as objects, pseudo (artificial) research, etc.
Place
Branch location must be permissible
Branches must be in legitimate areas : don’t position a branch next to a liquor store
People
Free & independent judgment emphasized,
Pressure is prohibited – coercion or force
Trustworthiness and attitude, a reflection of core principles of Islam
Customer Relationship Consultant (CRC) or Marketing Officers are the face of Islamic bank ethics
Competence:- possess the required skill and knowledge
Courtesy:- friendly, respectful and considerate
Credibility:- the employee must exhibit trustworthy
Reliability:- perform consistently & accurately
Responsiveness:- the employee must respond quickly to customers’ requests and problems
Communication:- the employee shall make an effort to understand the customer and communicate clearly.
Consequences of Interest Free Ethical Sales Behavior
The responsible interest free banking officers shall play a greater attention in customer satisfaction,
Customer satisfaction and rendering repeated support may be determined by the quality of the personal meet,
Customer satisfaction leads to customer loyalty,
Customer loyalty allows banks to focus on marketing,
Spend more time in building the customer base rather than just pleasing the existing ones.
Customer Trust in the Interest Free/Islamic Bank
Relates to belief on the part of the customer that obligations will be fulfilled,
Customer trust in the Marketing Officers can be earned by honest actions.
Customer loyalty
Significantly cheaper to retain customers than find a new one,
Long-term relationships with customers can only be established by trust,
The greater the ethical behavior as perceived by the customer, the greater the customer loyalty.
Unethical sales behavior
Lying or exaggerating about the benefits of a product or service, (monthly Mudaraba profit rate is highly exaggerated)
Lying about the competition,
Giving answers when the answer is not known,
Releasing information about the customers’ that is deemed private,
Disclosing any customer information without legitimate cause,
Using incorrect terminology in a sale
Loans, interest rate, lending, etc.
Better trained employee exhibit these characteristics.
Such as
- Value-maximization is through justice, equity, fairness, honesty, etc,
- Actions both positive or negative are in the context of its effects on the community as a whole,
- Brotherhood and Equality is expected from all employees, your smile to a 10 million depositor and 10,000 must be one and the same,
- However, the bank can segment the customer based upon their profile and usefulness.
Islamic Marketing Product
Lawful, Asset-backed, deliverable, transparent, good faith
Reputational risk if misrepresented as a Shariah compliant product
Price
Prices must be fair & cannot be unfair
Self-operating price mechanism
Shariah does not allow prices to be fixed
Prices are based up on supply and demand
Prohibition of false prices, artificially increasing prices,
Promotion
All false assertions, unfounded accusation, false testimony is prohibited
Reputational risk in false promotion
Prohibition of misleading advertising and/or misleading sales tactics
No sexual appeal, use of women as objects, pseudo (artificial) research, etc.
Place
Branch location must be permissible
Branches must be in legitimate areas : don’t position a branch next to a liquor store
People
Free & independent judgment emphasized,
Pressure is prohibited – coercion or force
Trustworthiness and attitude, a reflection of core principles of Islam
Customer Relationship Consultant (CRC) or Marketing Officers are the face of Islamic bank ethics
Competence:- possess the required skill and knowledge
Courtesy:- friendly, respectful and considerate
Credibility:- the employee must exhibit trustworthy
Reliability:- perform consistently & accurately
Responsiveness:- the employee must respond quickly to customers’ requests and problems
Communication:- the employee shall make an effort to understand the customer and communicate clearly.
Consequences of Interest Free Ethical Sales Behavior
The responsible interest free banking officers shall play a greater attention in customer satisfaction,
Customer satisfaction and rendering repeated support may be determined by the quality of the personal meet,
Customer satisfaction leads to customer loyalty,
Customer loyalty allows banks to focus on marketing,
Spend more time in building the customer base rather than just pleasing the existing ones.
Customer Trust in the Interest Free/Islamic Bank
Relates to belief on the part of the customer that obligations will be fulfilled,
Customer trust in the Marketing Officers can be earned by honest actions.
Customer loyalty
Significantly cheaper to retain customers than find a new one,
Long-term relationships with customers can only be established by trust,
The greater the ethical behavior as perceived by the customer, the greater the customer loyalty.
Unethical sales behavior
Lying or exaggerating about the benefits of a product or service, (monthly Mudaraba profit rate is highly exaggerated)
Lying about the competition,
Giving answers when the answer is not known,
Releasing information about the customers’ that is deemed private,
Disclosing any customer information without legitimate cause,
Using incorrect terminology in a sale
Loans, interest rate, lending, etc.
Better trained employee exhibit these characteristics.
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