Banking analyst: Banks often offer various services to new customers

Question

Banking analyst: Banks often offer various services to new customers at no charge. But this is not an ideal business practice, since regular, long-term customers, who make up the bulk of the business for most banks, are excluded from these special offers.

Which one of the following, if true, most strengthens the banking analyst’s argument?

(A) Most banks have similar charges for most services and pay similar interest rates on deposits.

(B) Banks do best when offering special privileges only to their most loyal customers.

(C) Offering services at no charge to all of its current customers would be prohibitively expensive for a bank.

(D) Once they have chosen a bank, people tend to remain loyal to that bank.

(E) Some banks that offer services at no charge to new customers are very successful.

Bunuel · Accepted Answer

EXPLANATION FROM Fox LSAT

The banking analyst says that banks often offer certain services to new customers at no charge. This is true. The banking analyst also says that regular, long-term customers are excluded from these special offers. Again true. Therefore, concludes the analyst, giving free **** to new customers is not an ideal business practice.

The question asks us to strengthen this argument. To do so, I’m going to try to weaken it first. The problem with the logic, I think, is that just because Bank of America screws its long-term customers like me, I’m probably too lazy to switch banks. Yes, I am offended by all of Bank of America’s stupid offers to new customers, and tired of their consistently poor treatment of existing customers, and hate the fact that they are the “Official Bank” of both the Boston Red Sox and their arch rival, the New York Yankees (or at least they used to be, circa 2004). But I also don’t want to go through the hassle of switching all my online bill payments and everything. So in the end, I’ll probably just remain an unhappy Bank of America customer for life.

To strengthen the analyst’s argument, we should be looking for the  opposite  of everything I just said. “Long-term customers will leave for other banks if they are given poorer treatment than new customers” would be a great answer.

A) This answer could hardly be worse. It’s simply not related in any way to the practice of giving new customers special treatment. How could this possibly strengthen the argument?

B) Ahh. I like this one. This one specifically addresses the practice of playing favorites, and says if you’re going to play favorites, you better play favorites only with your most loyal customers (i.e., not your brand-new ones). This is a strong candidate.

C) Well, no **** that would be prohibitively expensive! Who said everybody should be given stuff for free? The analyst certainly didn’t. The analyst said new customers shouldn’t be given special treatment, not that everybody should be given free stuff. This one is simply irrelevant.

D) This would weaken the argument, not strengthen it.

E) This would weaken the argument, not strengthen it.

Our answer is B, because it’s the only one that strengthened the argument.

asishron29181 · Answer

Conclusion : But this is not an ideal business practice, since regular, long-term customers, who make up the bulk of the business for most banks, are excluded from these special offers.

We need to strengthen the conclusion here.

(A) Most banks have similar charges for most services and pay similar interest rates on deposits. - Doesn't help us. Incorrect.

(B) Banks do best when offering special privileges only to their most loyal customers . - Correct. This provides evidence on the performance of banks which offer special privileges to their loyal customers.

(C) Offering services at no charge to all of its current customers would be prohibitively expensive for a bank. - Irrelevant.

(D) Once they have chosen a bank, people tend to remain loyal to that bank. - Again irrelevant.

(E) Some banks that offer services at no charge to new customers are very successful. - Incorrect. 'Some' could be 1 r 2 banks or more. Doesn't help us in any sense.

IMO B

unraveled · Answer

Banking analyst: Banks often offer various services to new customers at no charge. But this is not an ideal business practice,  since regular, long-term customers, who make up the bulk of the business for most banks, are excluded from these special offers.

Which one of the following, if true, most strengthens the banking analyst’s argument?

How can the highlighted text be a positive for banks' business? How that exclusion helps in banks' business?

(A)  Most banks have  similar charges for most services and pay similar interest rates on deposits. - WRONG. Irrelevant. Loses focus.

(B) Banks do best when offering special privileges  only to their most loyal customers . - CORRECT. Even if long-term customers are not given free services, banks offer best services to them, eventually keeping up the business.

(C) Offering services at no charge to  all of its current customers  would be prohibitively expensive for a bank. - WRONG. True in reality but banks already are not offering free services to all the customers.

(D) Once they have chosen a bank, people tend to remain  loyal to that bank.  - WRONG. Loyality is not discussed. It is not the core of the argument.

(E)  Some banks  that offer services at no charge to new customers are very successful. - WRONG. Too open to leave big room for any argument to be proposed.

Answer B.

PyjamaScientist · Answer

The conclusion is that offering free services to new customers is not an ideal business practice.  Why not?

Because the majority of a bank's customers--the regular long-term ones--are excluded from such offers.

What's the gap? 
Well - can we say the practice is not ideal just because those folks are excluded? Maybe they don't care or notice? And maybe that's what's needed to attract new business. It seems like the premise is hinting at some sort of reaction by those folks, but we don't hear about it. So, maybe it's still an ideal practice.

(B)   addresses that gap by pointing out that the real ideal practice is something else (offering perks to the most loyal customers).

(A) is out of scope - we're not comparing banks.

(C) is tempting, but it just helps explain why the practice being evaluated is more affordable than others. Even if we know (C) were true, it might be true that not offering any free services is the most ideal practice. Note that (C) doesn't really weaken the argument though it seems to: just because offering free services to everyone is too expensive doesn't mean that offering them to just new customers is the ideal practice.

(D) is oddly tempting. It tells us that folks tend to stick with their bank. Perhaps it's tempting because it seems like that mean that the old-timers don't care if the newbies get freebies - but if anything, that would weaken the argument! In the end, we don't care about how those folks behave - we want to know if the business practice is ideal or not.

(E) is also tempting - but if anything, it weakens. We want to hear that the practice is NOT ideal, not that it works sometimes. Also, "some" is pretty vague - is that two banks? And, are those banks offering those free service only to new customers?

sivatx2 · Answer

To strengthen the argument of the Banking analyst, we need to find a reason why various services offered to new customers is not all that great when compared to the benefits long-term customers would enjoy, as it won't be fair to the long-term customers.

(A) Most banks have similar charges for most services and pay similar interest rates on deposits. 
 Comparison of services & interest rates of various banks is irrelevant to the argument. Eliminate

(B) Banks do best when offering special privileges only to their most loyal customers. 
 This as per our analysis seems a strengthener. Keep

(C) Offering services at no charge to all of its current customers would be prohibitively expensive for a bank. 
 This may or may not be true. Also the scope is the 'regular/long term customers'. eliminate

(D) Once they have chosen a bank, people tend to remain loyal to that bank. 
 This may or may not be true and does not strengthen the argument. Remaining loyal to a bank is not the argument, it is about whether the practice is fair to the long-term customers. Eliminate

(E) Some banks that offer services at no charge to new customers are very successful. 
 "Some banks" success is irrelevant to the argument. It is about whether the practice is fair or not. Eliminate

So B is the best answer choice.

VerbalBot · Answer

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Banking analyst: Banks often offer various services to new customers

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