Customer Relationship Management

CRM represents the move in recent years away from streamlining processes in order to cut
costs towards the new strategy of knowing your customers intimately. This Briefing will help
you reconcile the technological with the humanistic approach.

Why CRM matters

In August 2000, the tyre industry experienced mass anxiety when Firestone was forced to
recall many of its tyres due to a number of fatalities. This triggered countless customer
enquiries and, as a result, the Firestone website crashed, staying down for the next twelve
hours. Michelin were also inundated with queries but, thanks to a newly installed CRM
model, this did not pose a problem. They were able to successfully answer all questions as
well as gather valuable data in order to facilitate future CRM strategies.

Driving forces behind the CRM initiative

Michelin's success story is just one example of the importance attached to CRM. It highlights
the move in recent years away from streamlining processes in order to cut costs towards the
new strategy of knowing your customers intimately. The three major driving forces behind
this initiative are:

 New software technology - collating and utilizing customer data is becoming

increasingly easier.
 The Internet - not only is there greater competition on the web, the potential for
accessing customer information is enormous.
 The changing customer - consumers today are more confident, sophisticated and,
with more choice than ever, more demanding.

In a complete turnaround from a few years ago it is now the customer, not the company, who
dictates what appears in the market.

"As customers change, learn, and evolve in response to the pressures they face, businesses
that serve them must change with them or lose out." - Robert E. Wayland & Paul M. Cole

Virtually every organization today recognizes that CRM must play a part in their corporate
strategy. Furthermore, it can no longer be seen as an independent entity, set aside from
everything else. Paul Cole, national director of the CRM practice at Ernst & Young LLP in
Boston, reiterates this view. He believes that "we've been thinking too statically and looking
on the customer relationship as a fixed asset rather than a continuous stream of interactions
that can build or destroy that asset. It's the relationship and not the customer with an account
number that drives your growth."

And of course, there is a huge difference between having a CRM policy and actually
practising good CRM. Essentially it comes down to one question; are you really listening to
your clients?

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This Briefing will help you to recognize the needs of the emerging new consumer of the
twenty-first century and reconcile new technologies with a humanistic approach to
CRM.

1. Customer relationship management: the case of a European bank

Here you will learn how to convert the principle of customer relationship management
(CRM) into practical guidelines for best practice in the implementation of a CRM
programme in the real world.

2. Building brand webs: Customer relationship management through the Tesco

Clubcard loyalty scheme
This article undertakes a case study-based analysis of the Tesco Clubcard loyalty
scheme that seeks to re-conceptualise the role of loyalty schemes by focusing on the
role of loyalty schemes in branding and brand webs.

3. Quality and customer relationship management (CRM) as competitive strategy

in the Swedish banking industry
The purpose of the study is to theoretically and empirically develop a better
understanding of quality and customer relationship management (CRM) impact on
banking competitiveness.

4. E-relationship marketing: changes in traditional marketing as an outcome of

electronic customer relationship management
Marketing concepts and definitions have remained relatively unchanged until
recently. Electronic customer relationship management (eCRM) has forced marketing
managers to reevaluate how, when and to what extent they interact with their
customers.

5. An integrated framework for customer value and customer-relationship-

management performance: a customer-based perspective from China
In the modern customer-centred era, customer value is a strategic weapon in attracting
and retaining customers. Delivering superior customer value has become a matter of
ongoing concern in building and sustaining competitive advantage by driving
customer-relationship-management (CRM) performance.

6. A critical incident approach to the examination of customer relationship

management in a retail chain: an exploratory study
This exploratory study investigates the nature of customer evaluations of their service
encounters in a retail chain departmental store setting in Victoria, Australia. The focus
of the study is to understand how a customer perceives positive and negative
encounters with regard to shopping at the retail chain.

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Importance of CRM

Customer relationship management is a broad approach for creating, maintaining and

expanding customer relationships. CRM is the business strategy that aims to understand,
anticipate, manage and personalize the needs of an organization’s current and potential
customers. At the heart of a perfect strategy is the creation of mutual value for all parties
involved in the business process. It is about creating a sustainable competitive advantage by
being the best at understanding, communicating, and delivering and developing existing
customer relationships in addition to creating and keeping new customers. So the concept of
product life cycle is giving way to the concept of customer life cycle focusing on the
development of products and services that anticipate the future need of the existing customers
and creating additional services that extend existing customer relationships beyond
transactions.

Present and Future of CRM in banking

Bank merely an organization it accepts deposits and lends money to the needy persons, but
banking is the process associated with the activities of banks. It includes issuance of cheque
and cards, monthly statements, timely announcement of new services, helping the customers
to avail online and mobile banking etc. Huge growth of customer relationship management is
predicted in the banking sector over the next few years. Banks are aiming to increase
customer profitability with any customer retention. This paper deals with the role of CRM in
banking sector and the need for it is to increase customer value by using some analytical
methods in CRM applications. It is a sound business strategy to identify the bank’s most
profitable customers and prospects, and devotes time and attention to expanding account
relationships with those customers through individualized marketing, pricing, discretionary
decision making.

In banking sector, relationship management could be defined as having and acting upon
deeper knowledge about the customer, ensure that the customer such as how to fund the
customer, get to know the customer, keep in tough with the customer, ensure that the
customer gets what he wishes from service provider and understand when they are not
satisfied and might leave the service provider and act accordingly.

CRM in banking industry entirely different from other sectors, because banking industry
purely related to financial services, which needs to create the trust among the people.
Establishing customer care support during on and off official hours, making timely
information about interest payments, maturity of time deposit, issuing credit and debit

cum ATM card, creating awareness regarding online and e-banking, adopting mobile request
etc are required to keep regular relationship with customers.

The present day CRM includes developing customer base. The bank has to pay adequate
attention to increase customer base by all means, it is possible if the performance is at
satisfactory level, the existing clients can recommend others to have banking connection with
the bank he is operating.  Hence asking reference from the existing customers can develop
their client base. If the base increased, the profitability is also increase. Hence the bank has to
implement lot of innovative CRM to capture and retain the customers.

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There is a shift from bank centric activities to customer centric activities are opted. The
private sector banks in India deployed much innovative strategies to attract new customers
and to retain existing customers. CRM in banking sector is still in evolutionary stage, it is the
time for taking ideas from customers to enrich its service. The use of CRM in banking has
gained importance with the aggressive strategies for customer acquisition and retention being
employed by the bank in today’s competitive milieu. This has resulted in the adoption of
various CRM initiatives by these banks.

Steps to follow

The following steps minimize the work regarding adoption of CRM strategy. These are:

 Identification of proper CRM initiatives

 Implementing adequate technologies in order to assist CRM initiative
 Setting standards (targets) for each initiative and each person involved in that circle
 Evaluating actual performance with the standard or benchmark
 Taking corrective actions to improve deviations, if any

Importance of CRM in the Banking Industry

Customer relationship management, or CRM, is very important to the banking industry. Banks
and other financial services companies invest billions of dollars annually on operating CRM
programs.

Customer Satisfaction

1. Delivering a better total customer experience has been a primary goal of CRM
programs. In banking, this caused bankers to add ATM machines and Internet banking.
The result was improved customer retention and loyalty. These results prompted more
banks to explore the benefits of a CRM program.

Bundling

2. Bundling of services has become common in financial services. Banks not only want
to retain customers but try to leverage relationships through bundling of services. CRM
solutions help banks maintain individual views of customer accounts in order to offer the
best customer value, to offer upgrades and additional financial products, and to analyze
customer data for relationship-building and marketing.

Customer Benefits

3. For many customers, a strong banking relationship is as vital as any other business
relationship they maintain. This gives CRM-driven banks an advantage in that customers
want the benefits of a solid relationship. Common benefits for customers of banks using
CRM include wider access with branch locations, Internet and ATMs; access to service
and support; discount credit rates and enhanced savings; and other customization
opportunities.

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Objective
My objective of study are :

 The idea of CRM is that it helps businesses use technology and human resources gain
insight into the behaviour of customers and the value of those customers.

 CRM to be truly effective, an organization must first decide what kind of customer
information it is looking for and it must decide what it intends to do with
that information.

 To increase the market share or sales volume of the product.

 To study how consumer’s relationship affect the sale of the product.

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Need for CRM in the banking industry
A Relationship-based Marketing approach has the following benefits: -

 Over time, retail bank customers tend to increase their holding of the other products
from across the range of financial products / services available.
 Long-term customers are more likely to become a referral source.
 The longer a relationship continues, the better a bank can understand the customer.
 Customers in long-term relationships are more comfortable with the service, the
organization, methods and procedures.

Private banking and CRM

 Private Banks have traditionally viewed themselves as exceedingly 'Customer Centric'
 They believe in the concept of “The wealthier the customers, the more demanding
they are”.
 The first step towards successfully winning, of private banking is to understand what
customers wants and needs are.
Their prime focus is to create differentiated customer experience.

Effectiveness of CRM
As the financial market system is questioned and people are seeking for alternative way
of doing business CRM might be effective in the following way:

 Communicating with your customers

 Checking unusual movements on your account
 Providing tremendous opportunities to your clients
 Managing customer's questions flow
 Secure the banks business models

Customer experience
To be a credible player in the market, a private bank must be able to deliver this customer
experience.

These are widely categorized in three sections they are

• The Basic Customer Experience

• The Segment-Specific Experience
• The Organization-Specific Experience

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How to Implement CRM in Banks
Implementing a customer relationship management (CRM) system at a bank takes careful
planning. Banks need to involve key employees in the vendor decision so that they choose a
system which will give them the most for their investment. Ease of use and ability to view
information quickly are equally important to employees and managers. As
Destinationcrm.com points out, CRMs helps firms manage customer relationships better, and
customer relationships are vital to any company's success.

Instructions
1. Gain employees' opinions. Ask bankers which data is important to them when
tracking customers and prospects. Most bank CRM systems include contact
information, account information and potential sale amounts. They also include an
estimate of how likely it is that the banker will convert a prospect into a new
customer. When employees provide input into the new system decision, they will be
more willing to use the CRM when it is rolled out.

2. Research vendors. Visit the American Marketing Association (AMA) website's

marketing resource directory, which is linked in References. This page lists CRM
system vendors. Ask similar sized banks for vendor recommendations. Find out if the
vendor provided appropriate CRM features for the bank's specific needs. Ask if the
company delivered the system on time and if the firm provided sufficient support and
training to employees after the sale. Create a spreadsheet comparing vendor features
and pricing.

3. Narrow your choices to three or four vendors. Meet with department managers that
will use the CRM system. Review the vendor choices and make a vendor decision as a
group. Arrange training by combining vendor resources and internal training
resources. Allow ample time for employees to learn the CRM .

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 DATA ANALYS

Table No. 1 Showing the awareness about the Banking industry towards
the customer:

Yes No
75 25

Showing the awareness about the banking industry

towards customer
Yes No
25%

75%

Inference:

The above chart shows most of the people in Bhubaneswar respondents (75%) awareness
about the banking industry towards customer.

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Table No. 2 Satisfaction level of customer:

Average 45
Good 20
Very good 30
Excellent 05

Satisfaction level of customer

Excellent
5%
very good
30% Average
45%

Good
20%

Inference:

The above chart shows that (45%) are average, (30%) are very good, (20%) are good with
service provided by the banking industry.

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Table No. 3 Whether various survises offer given by bank helps to motivate
the customer:

Yes No
70 30

Various services offer given by bank help to motivate the

customer
Yes No
30%

70%

Inference:

The above chart shows 70% employees and thinking promotion policy acts as a motivating
factor for them, where 30% employees do not think so.

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Table No. 4 Employees need training to survive customer in better way.

Yes No
80 20

Table 4
Yes No
20%

80%

Inference:

The above chart shows that (80%) employees need training for provided better service to
customer and (20%) think they don’t need any kind of training.

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Table No. 5 Satisfaction level of first time account holders:

Rank Response
1 0
2 3
3 2
4 15
5 38
6 10
7 5
8 27
9 0
10 0

Satisfaction level of first time account holders

Rank Response
38

27

15
10 9 10
7 8
5 6 5
4
1 2 3 3 2

1 2 3 4 5 6 7 8 9 10

Inference:

The above chart shows (38%) respondents agree that 5 out of 10 satisfaction level of first
time account holders, and another 27% respondents 8 out of 10satisfaction level, and (15%)
respondents 4 out of 10, and (10%) respondents 6 out of 10 satifiction level of first time
account holders..

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Table No. 6 Which banking industry provided Better services:

Govt. bank Private bank

22 78

Table No. 6

22%

Govt. bank
Private bank

78%

Inference:

The above chart shows according ( 78%) respondents sais that Private bank is a better than
govt. bank and acccording to (22%) denied to this statement.

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 Findings

 The above chart shows most of the people in Bhubaneswar respondents (75%)
awareness about the banking industry towards customer.

 The above chart shows that (45%) are average, (30%) are very good, (20%) are good
with service provided by the banking industry

 The above chart shows 70% employees and thinking promotion policy acts as a
motivating factor for them, where 30% employees do not think so.

 The above chart shows that (80%) employees need training for provided better service
to customer and (20%) think they don’t need any kind of training.

 The above chart shows (38%) respondents agree that 5 out of 10 satisfaction level of
first time account holders, and another 27% respondents 8 out of 10satisfaction level,
and (15%) respondents 4 out of 10, and (10%) respondents 6 out of 10 satifiction level
of first time account holders..

 The above chart shows according ( 78%) respondents sais that Private bank is a better
than govt. bank and acccording to (22%) denied to this statement.

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 Conclusion

Customer Relationship Management is concerned with attracting, maintaining and enhancing

customer relationship in multi service organizations. CRM goes beyond the transactional
exchange and enables the marketer to estimate the customer’s sentiments and buying
intentions so that the customer can be provided with products and services before the starts
demanding. Customers are the backbone of any kind of business activities, maintaining
relationship with them yield better result.

CRM technology vendors have oversold the banking and financial industries with
solutions. Unfortunately, these industries have quickly learned that effective CRM requires
more than just a software application; it requires a business strategy. That business strategy
should

 focus on customer equity assets

 enable organizational structures to support a customer-centered business model (as
well as a product- centered or function-centered model)
 provide a mechanism to develop data that supports the customer-centered model
 Incorporate a technology infrastructure that optimizes customer relationships.

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 Bibliography

Books

1. Marketing Management Kotler Philip

2. Marketing Research Fr. N.Casimir Raj

Magazines

1. CRM in bank

Websites

1. www.google.com

2. www.wikipedia.com

3 .www.scribe.com

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