A STUDY ON CURSTOMER RELATIONSHIP MANAGEMENT

Abstract: CRM is short for customer relationship management. The ideas behind customer relationship management are by no means new.
Today it’s widely acknowledged that how you understand and treat your customers, goes a long way to determining your future success and
profitability, and companies are making bigger and bigger investments to do just that. The concepts of customer relationship management
have been in the air ever since people started exchanging things, but CRM as a term came into existence in the mid-1990s. Companies are
already pouring billions of dollars into CRM solutions—software and services designed to help businesses more effectively, manage
customer relationships through any direct or indirect channel a customer might use. That's why, the market for CRM technology is
exploding. Obviously the most common question asked here is “What is CRM?” Probably because if you ask three managers, you’ll get five
different answers. In brief, CRM is the total process of: • getting customers, • keeping customers • maximizing customer profitability,
behavior and satisfaction.
Key words: CRM,

INTRODUCTION

'Recession' and 'Economic downturn' has been the talk everywhere; companies have wakened up for a
more reforming strategy to beat the heat of the crash. Across the globe, the economic slump has traumatized
many companies to the core, even the traditional and established companies. The market is becoming robust
with the economic conditions making their way up the ladder.

Traditional practices of marketing are shifting from 'product-centric marketing' to 'customer-centric

marketing'. They have recognized that customers are the core of a business and that a company’s success
depends on effectively managing relationships with them. With the changing social trends, such as the increase
in ready to cook foods to automatic washing machines, marketing methods have changed. In addition to this,
the lesser government controls have brought many foreign companies as well as competition in the market. In
this light, CUSTOMER RELATIONSHIP MANAGEMENT is ringing its bell in every organisation.

The main aim of CRM initiatives is to retain the right customers and a key determinant of customer
retention is customer satisfaction. The objective is to ensure that customers are satisfied to ensure their
continued patronage. Customer Relationship Management (CRM) is not new to the world of business. It is a
managerial philosophy that enables a firm to become thoroughly familiar with its customers. This concept is
currently gaining widespread popularity in many industries. Firms that embrace CRM strive to provide
consistent and personal customer service over time and across multiple touch points. Insurance Industry is one
such Industry which involves many touch points, such as agents, call centers, representatives etc

Review of Literature on CRM: Customer Relationship Management (CRM) has become one of the most
dynamic technology topics of the millennium. According to Chen and Popovich (2003), CRM is not a concept
that is really new but rather due to current development and advances in information and enterprise software
technology, it has assumed practical importance.The root of CRM is relationship marketing, which has the
objective of improving the long-term profitability of customers by moving away from product-centric
marketing.
Bose (2002) noted that CRM was invented because the customers differ in their preferences and purchasing
habits . If all customers were alike, there will be little need for CRM. As a result, understanding customer
drivers and customer profitability, firms can better tailor their offerings to maximize the overall value of their
customer portfolio (Chen and Popovich) . The attention CRM is currently receiving across businesses is due to
the fact that the marketing environment of today is highly saturated and more competitive (Chou et al, 2002) .
According to Greenberg (2004), CRM generally is an enterprise-focused endeavor encompassing all
departments in a business . He further explains that, in addition to customer service, CRM would also include,
manufacturing, product testing, assembling as well as purchasing, and billing, and human resource, marketing,
sales and engineering.

Chen and Popovich (2003) argued that CRM is a complicated application which mines customer data, which has
been retrieved from all the touch points of the customer, which then creates and enable the organization to have
complete view of the customers. The result is that firms are able to uncover and determine the right type of
customers and predicting trend of their future purchases. CRM is also defined as an all embracing approach that
seamlessly integrates sales, customer service, marketing, field support and other functions that touch customers
(Chou et al, 2002) . They further stated that CRM is a notion regarding how an organization can keep their most
profitable customers and at the same time reduce cost, increase in values of interaction which then leads to high
profits.

The modern customer relationship management concept was shaped and influenced by the theories of total
quality management (Gummesson) and by new technological paradigms (Zineldin, 2000). There is however, a
perceived lack of clarity in the definition of customer relationship management, although all accepted
definitions are sharing approximately the same basic concepts: customer relationships, customer management,
marketing strategy, customer retention, personalization (Zineldin 2000).

However, while academics debate the subtitles of various definitions, the practitioners have developed a wealth
of applicative papers analyzing the concrete challenges and opportunities of implementing the systems
(Bacuvier et al. 2001). CRM in some firms is considered as a technology solution, considering of individual
databases and sales force automation tools and sales and marketing functions so as to improve targeting effort.
Peppers and Rogers (1999) argued that other organizations view CRM as a tool, which has been particularly
designed for one-to-one customer communications, which is the function of sales, call centres or the marketing
departments. Accordingly Frow and Payne (2004) added that CRM stresses two-way communication from the
customer to the supplier to build the customer over time. The two-way communication has been enhanced
greatly by advances in technology particularly the Internet.

In term of information technology (IT), CRM means an enterprise –wide integration of technologies working
together such as data warehouse, web site, and intranet/extranet, phone support system, accounting, sales,
marketing and production.

Kotler (2000) assured that CRM uses IT to gather data, which can then be used to develop information acquired
to create a more personal interaction with the customer. In the long-term, it produces a method of continuous
analysis and reinforcement in order to enhance customer’s lifetime value with firms. Goldenberg (2000)
believes that CRM is not merely technology applications for marketing, sales and services but rather when it is
successfully implemented ; it enables firms to have crossfunctional , customer-driven , technology-integrated
business process management strategy that maximses relationships.

Chin et al (2003) stated that that due to many technological solutions available for CRM automation, it is often
misconstrued as a piece of technology. But they maintained that in recent times many companies have realized
the strategic importance of CRM, and as a result, it is becoming a business value-effort rather than technology-
centric effort. Using information technology as an enabler, CRM strategy leverages key functional areas to
maximize profitability of customer interactions (Chen and Popovich, 2003). It has been recognized that
technological advancements and innovations , keen competitive marketing environment , coupled with the
internet are main drivers of present and future customer profitability which makes it possible to appropriately
and proportionately allocate firm’s resources to all functional areas that affect customer relationship ( Chou et al
, 2003).

For customers, CRM offers customization, simplicity and convenience for completing transactions irrespective
of the kind of channel of interaction used (Gulati and Garino, 2000). Many businesses today realize the
importance of CRM and its potential to help them achieve and sustain a competitive edge (Peppard, 2000).

This view was further boosted by Bose (2002) that as a result of changing nature of the global environment and
competition, firms cannot compete favorably with minor advantages and tricks that can easily be copied by
competing firms .The implementation of CRM is an enabled opportunity to rise above minor advantages with
real focus on developing actual relationships with customers. Firms those are most successful at delivering what
customers want are the more likely to be leaders of the future. Benefits of CRM According to Chen and
Popovich (2003), CRM applications have the ability to deliver repositories of customer data at a much smaller
cost than old network technologies. Throughout an organization, CRM systems can accumulate, store, maintain,
and distribute customer knowledge. Peppard (2000) noted that effective management of information has a very
important role to play in CRM because it can be used to for product tailoring, service innovation; consolidate
views of customers, and for calculating customer lifetime value. CRM systems assists companies evaluate
customer loyalty and profitability based on repeat purchases, the amount spent, and longevity.

Bull (2003) added CRM makes it practicable for companies to find unprofitable customers that other companies
have abandoned. This position is supported by Galbreth and Rogers (1999) that CRM helps a business
organization to fully understand which customers are worthwhile to acquire , which to keep, which have
untapped potential, which are strategic, which are important , profitable and which should be abandoned.
Greenberg emphasized that CRM can increase the true economic worth of business by improving the total
lifetime value of the customer , adding that successful CRM strategies encourage customers to buy more
products, stay loyal for longer periods and communicate effectively with a company. CRM can also ensure
customer satisfaction through allocation, scheduling and dispatching the right people, with the right parts, at the
right time (Chou et al., 2002).

NEED OF STUDY
CRM allows a company to know who its customer is and what his/her specific requirements are and to be more
precise, CRM solutions collect information about customers and evaluate that information to profit of the
organization.
Keeping in mind the pace at which technology is changing today, any company which is a step ahead of others
because of some web product or service will not be able to hold on to that advantage for long. The key to
stability in today's dynamic marketplace is forging long-term relationships with the customers.
Providing employees with the information and processes necessary to know their customers, understand and
identify customer needs and effectively build relationships between the company, its customer base, and
distribution partners.
To maintain good relationship with the customers.
The change from the profit orientation of a business to customer centric unit has lead to the surge of CRM
inculcation in the modern business scenario.

SCOPE OF THE STUDY

CRM, or customer relationship management, is concerned with the development and maintenance of mutually
beneficial relationships with strategically significant partners. Its focus is the creation of long-term value, and
not just short-term profits, for the company and all it works with. The scope of CRM can thus be defined
according to its constituencies, how long-term value can be created for and with them and the benefits of doing
so.

It is many times more expensive to win new customers than to keep existing ones. That is why customer
relationship management (CRM) geared strategically to a company’s objectives offers crucial competitive
advantages.

OBJECTIVES OF THE STUDY

The objectives of the study are:
1. Customer knowledge:
• Appropriate customer information collection .
• Analyzing customer data.
• Acquiring new customers .
2. Customer interaction:
• Responding appropriately to customer request .
• Business process integration.
• Channels management improvement .
3. Customer Value:
• Improving customer retention .
• Increasing profits .
• Customer service and support improvement .
4. Customer satisfaction.
• Improving service quality .
• Establishing relationships with customers .

REASEARCH METHODOLOGY
The present study is a survey-cum-analytical and based on observation of experiment one. To elicit the
primary data for the proposed study, a well-designed and structured questionnaire is used for executive and non
executive respondents. The question covering the aspect of customer relationship management from the
perspective of customer satisfaction, customer loyalty, customer relationship with the organisation and customer
feedback are incorporated in the questionnaire, personal interviews are taken with the respondents to strengthen
the information, with regard to the secondary data; books, articles, survey reports, news letters, ICICI personal
manual, journals of ICICI, internet information on the topic from both within and outside the sample
organisation are used extensively other than company reports and document.

Research design : Descriptive in nature.

Research instrument : A well structured questionnaire.
Population : All employees of ICICI.
Sample size : 50

SOURCE OF INFORMATION
Source of data is both primary and secondary data were gathered and utilized for the study of
performance of customer relationship management. To elicit the primary data for the proposed study a well
designed questionnaire is used for independence. The statements cover the aspects of customer relationship
management and associated issues. Personal interviews are taken with the respondents to strengthen the
information.

DATA COLLECTION TOOLS:

To obtain the data for the purpose of present study the following tools are used;
a) Examination of secondary data.
b) Questionnaire and interviews.

DATA ANALYSIS:
The customer relationship management data are analyzed using basic parametric techniques such as
percentages and averages etc., where ever they are required.

LIMITATIONS OF THE STUDY

In a project like this, one cannot claim 100% that the information or data collected is accurate.
However every possible effort has made to make it genuine and authentic. It is possible that some errors might
have kept in while collecting data or in the report due to the following reasons.

Lack of experience on a part of the researcher.

Errors in tabulation and analysis of the data may weaken the exactitude.
Sample size may not be enough.
The answers given by the respondents may be biased or not true.
Time is constant is very much required for the banks.
 1. Which bank you are using?

S NO PRODUCT RESPONDENTS %

1 ICICI 60 60

2 HDFC 20 20

3 ING 15 15

4 CITI BANK 5 5

CHART

Interpretation:

From above it can be stated that the general satisfaction level of for ICICI in twin cities of Hyderabad and
Secunderabad is 60%.
2. SOURCES OF AWARENESS:

S .NO ADVERTISEMENT RESPONDENTS %

1 T.V 35 35
2
NEWSPAPERS 25 25
3
FRIENDS 12 12
4
DEALERS 28 28

Interpretation:

Out of the responses obtained from 100 customers 28% said that they became aware of the Friends. And
through the friends 35% of the customers are aware from the T.V. And another 25% are aware of by the NEWS
PAPERS. And only 12% are aware by the DEALERS.
3. LEVEL OF SATISFACTION:

The customer was enquired about the level of satisfaction with regard to the ICICI.
S NO SATISFACTION RESPONDENTS %

1 EXCELLENT 30 65
2 GOOD 10 20
3 AVERAGE 50 10
4 POOR 10 5

Interpretation:
Out of the responses obtained from 100 customers 65% said that they are EXCELLENT satisfied and 20% were
GOOD and 10% were AVERAGE and 5% were vehicle is poor. This data is obtained by most of members were
satisfied by ICICI services.

4. What are the voluble attributes you normally look while purchasing an account?

S NO ATTRIBUTES RESPONDENTS

1 SERVICES 50 50

2 PRICE 10 10

3 SAFETY 30 30

4 OTHERS 10 10
Interpretation:
From the above it can be stated that general normally any one while purchasing a four wheeler most of the
members are seeing 50% of members are seeing SERVICES and 30% of members are seeing SAFETY And
10% of members are seeing PRICE and 10% of members are others.

5. SUGGESTING TO FRIENDS:

The following table is regarding the customer likeliness in suggesting this bank to other friends. This is an
indicator of customer satisfaction also.
Let’s see the responses.

S NO SUGGEST FRIENDS RESPONDENTS %

1 YES 90 90

2 NO 10 10
Interpretation:

A look at the chart shows that 90% of the members are suggesting and 10% of the members are not
suggesting.
6) BANK EXECUTIVE PERFORMENS:

The following table shows “bank executive” role in explaining the features of the cat to customer. This helps to
know how effective he is in his job let’s seeing the response.

S NO EXPLANATION IN NUMBERS %

1 EXCELLENT 70 70

2 VERY GOOD 25 25

3 POOR 5 5

Interpretation:

Out of 100 respondents 60 % of them felt the explanation to be “EXCELLENT”. And 35% of them “VERY
GOOD” and rest of 5% felt to be “POOR”. According to them sales executives does knotty explain all feature
POOR this kind of responses need to be considered with serious ness.
7) RESPONSE TERMS:

One of the major factors, which has great role in “CRM”, is the response terms with regard to customer query
or grievance.

RESPONSE TERMS IN NUMBERS

70
TIMELY/PROMPTLY

SAFELY 25

INCONDITION 5

80
70
60
TIMELY/PROMPTLY
50
40 SAFELY

30
INCONDITION
20
10
0
IN NUMBERS

Interpretation:

From the above chart we conclude that most of the customer that is 70% of found the delivery process is to be
“TIMELY” and 25% of delivery process to be “SAFELY” and 5% of delivery process to “INCONDITION”.

8) What is your opinion about bank?

S NO OPINION RESPONDENTS %

1 EXCELLENT 50 50

2 GOOD 30 30

3 AVERAGE 15 15

4 POOR 5 5
Interpretation:
Out of the 100 respondents 50% of them told “EXCELLENT” and 30% of them told “GOOD” and 15% of them
told “AVERAGE” and 5% of them told “POOR”.

9) AMBIENCE OF BANK:

The other factor, which has much influence on the customer, is the “AMBIENCE” of the show room. This will
help to know how the customer perceives this particular show room in comparison with the other showroom.

S.NO SCALE RATING RESPONDENTS %

1 BANK AMBIENCE 55 55

2 DISTANCE 25 25

3 APPEAL 10 10

4 OTHERS 10 10

TOTAL 100 100

Interpretation:
From the above graph we can conclude that out of 100 customers interviewed 40% were telling that the
ambience of showroom is “PLEASANT’ and 38% was telling as “EXCELLENT” and 22% says “APPEAL” is
very good.
FINDINGS
They still undertake most of the government borrowing programmes, thereby generating significant fee based
income;
The market discipline imposed by the listing of most public sector banks has also probably contributed to this
improved performance; and
The reform measures have changed their business strategies particularly greater diversification of non-fund
based business and emergence of treasury and foreign exchange business.
Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile banking, debit
cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the
mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of
successful VRS schemes. Also, following India's commitment to the WTo agreement in respect of the services
sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a
year with effect from 1998-99 as against the earlier stipulation of 8 branches.
SUGGESTIONS

Bank shall plug the gap between the demand and capture new customer base in the area.
Since the credit cards are in the vogue these days in the AP region and the consumers here are very excited
about them; as they are newly exposed to it; bank shall focus its efforts to market its credit cards as bank offers
world class services which is HDFC bank's unique selling point on which the bank can really cash on.
The bank can start providing service like Mobile banking, Net banking and Bills payment, as the study suggests
that there is awareness about the service in the consumers. This will give bank an advantage of becoming a
market leader in the region.
The demand for loans offered by the banks exists in the market although the numbers showing their using it are
very low. Bank can go ahead and can cash on it by going to the consumers and informing them that HDFC Bank
also do offer these services better than its competitors.
CONCLUSIONS
There is a need of constant innovation in retail banking. In bracing for tomorrow, a paradigm shift in
bank financing through innovative products and mechanisms involving constant up gradation and revalidation of
banks internal systems and processes is called for. Banks now need to use retail as a growth trigger. This require
product development and differentiation, innovation and business process reengineering, micro-planning,
marketing, prudent pricing, customization, technological up gradation, home / electronic / mobile banking, cost
reduction and cross selling. While retail banking offers phenomenal opportunities for growth, the challenges are
equally daunting. How far the retail banking is able to lead growth of the banking industry in future would
depend upon the capacity building of the banks to meet the challenges and make use of opportunities profitably.
However, the kind of the technology used and the efficiency of operations would provide the much-needed
competitive edge for success in retail banking business. Furthermore, in all these customers interest is of
paramount importance. The banking sector in India is demonstrating this and I do hope they would continue to
chart in this traded path.