Q3: Banking analyst: Banks often offer various

LR Question 3 Explanation

QUESTION TEXT: Banking analyst: Banks often offer various services to new customers …

QUESTION TYPE: Strengthen

CONCLUSION: It’s not ideal for banks to offer free services to only new customers.

REASONING: These promotions exclude regular, long-term customers, even though those customers make up the bulk of a bank’s business.

ANALYSIS: The argument develops like this:

The analyst assumes that treating loyal customers worse than new customers is bad for business. But why?

Maybe loyal customers don’t care. Maybe they’ll never leave anyway. If you’ve ever switched banks, you know it’s a hassle!

If that’s true, then there’s nothing wrong with using promos only to attract new customers.

So a good strengthening answer will show that it’s very important for the business to keep loyal customers happy.

___________

So banks are fairly similar. That doesn’t tell us whether offering promos only to new customers is a good or bad business strategy.
CORRECT. If banks perform best by rewarding their loyal customers, then offering special benefits only to new customers is indeed poor business practice. Notice how closely this lines up with the analyst’s concern.
If anything, this weakens the argument. It gives a practical reason why banks can’t extend these promotions to existing customers, so their current practice seems more reasonable.
This weakens the argument. If customers rarely switch banks anyway, then excluding them from promotions isn’t much of a business problem. Banks can safely focus on attracting new customers.
Just because some successful banks use this strategy doesn’t show the strategy is ideal. Their success could be due to many other factors. And if their success is due to this strategy, then the argument is pretty bad and definitely not strengthened.