Financial institutions face challenges retaining customers amidst rising competition and diminished trust post-2008 financial crisis. Since acquiring new customers is 5-6 times costlier than retaining existing ones, firms must focus on improving customer loyalty. Relationship-Based Pricing (RBP) offers an innovative approach to achieve this by analyzing customer behavior and using insights to develop tailored pricing strategies. Effective RBP can enhance revenues, margins, and customer retention while allowing firms to identify and eliminate consistently unprofitable customer relationships.

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