Jagannath University

Assignment on

“The Effect of CRM on Customer satisfaction in service sector of Bangladesh”

Submitted To:
Mahjabeen Ahmed

Assistant Professor

Department of Marketing

Faculty of Business Studies

Jagannath University, Dhaka.

Submitted by:
Marketing Masterminds

10th Batch

Department of Marketing

Faculty of Business Studies

Jagannath University, Dhaka.

Date of Submission: 28th April, 2021

 Jagannath University
Department of Marketing
Course Name: Customer Relationship Management

Course Code: MKT-5202

Group Name: Marketing Masterminds

Group Members List

Sl. No ID Name Marks

01 B-150204032 Safayet Siddique
02 B-150204061 Robiul Hossain
03 B-150204065 Mehedi Hassan
04 B-150204066 Mohaiminul Islam
05 B-150204071 Nusrat Sultana
06 B-150204077 Lutfun Nahar
07 B-150204084 Md. Nizam Uddin Shamci
08 B-150204102 Nazmun Nahar
09 B-150204105 Md. Shahriare Hossain Anik
 Introduction

Customer Relationship Management

(CRM) is broadly recognized and widely implemented strategy for managing and nurturing a
company’s interactions with customer’s clients and sales prospects. It involves using technology
to organize automate and synchronize business process – Principally sales activities, but also
Those for marketing, Customer Services & technological support. When an implementation is
effective, people, processes and technology work in synergy to increase profitability, and reduce
operational costs.

Service Sector
For the last 30 years there has been a substantial shift. The primary and secondary sector to the
tertiary sector in industrialized countries. The tertiary sector is now the largest sector of the
economy. The service sector consists of the soft parts of the economy. Where people offer their
knowledge and time to improve productivity, performance, potentials the basic characteristic of
this sector is the production of services instead of end products.

CRM in Service Sector

The service sector is receiving much deserved attention resulting from its inevitable role in a
Bangladesh’s economic development. Where it is mainly focusing of developing an inbound
relationship with the customer. Which helps in terms of retaining the customer? Because service
is an “intangible good” include attention, advice, experience, discussion. The scope of CRM in
service sector is vast where it includes Gov’t, health care /hospitality education, banking,
insurance, financial, legal, consulting, news media, hospitality(restaurants, hotels), tourism, retail
sales etc.,

Customer focus and relationship management have become fundamental marketing and business
philosophies for many companies seeking competitive advantage. Establishing, maintaining and
enhancing customer relationships have always been an important aspect of business. Although
CRM is considered to be a business philosophy closely related to relationship marketing, it is the
linkage with technology that is particularly of great interest. Marketing academics have begun to
explore and understand the linkage between CRM technology, relationship marketing and business
relationships as providing opportunities for sustainable competitive advantage. Due to rapid
development of the Internet, e-commerce and self-service customer support, there are increased
expectations from customers for improved, personalized service and immediacy. Marketing
practitioners are now using technology to their advantage and working closely to deliver value to
the organization and to the customer. This has prompted marketing practitioners to use technology
to capture and use customer information in order to better meet customer demands. Customer
relationships are considered superior to transactional exchange in their ability to create sustainable
competitive advantage and superior business performance. The service sector is receiving much
deserved attention resulting from its inevitable role in a country’s economic de-elopement. Despite
all the efforts gaps such as the relationship between technological advances and service
development are yet to be revealed from the perspective of new applications that organizations
want to develop and implement.

Customer Relationship Management entails all aspects of interaction a company has with its
customer, whether it is sales or service related; it starts with the foundation of relationship
marketing. CRM is a systematic approach towards using information and ongoing dialogue to built
long lasting mutually beneficial customer relationship. From the above all available data it is clear
that how CRM is placing a vital role in service sector. So, it makes more strengthen this sector.

Evolution of CRM

Relationship Marketing is a significant marketing strategy in developing countries. CRM stands

for customer relationship management. It is a comprehensive approach to establishing, sustaining,
and It has been one of the most commonly recommended strategies for reducing market share and
slow growth in a variety of sectors, including the banking and financial sector in particular. CRM
is a straightforward theory that puts the customer at the center of business processes, operations,
and cultures in order to increase customer loyalty and income. CRM is defined as "the creation,
growth, maintenance, and optimization of long-term, mutually beneficial relationships between
customers and organizations" in one of the encompassing meanings. It is a holistic strategy for
establishing, sustaining, and enhancing customer relationships.
The principle of customer relationship management (CRM) is critical in the service industry. Mr.
Peter Drucker, the Management Guru, described the essence of the business as "the object of the
business is to attract and maintain a good customer." Any service sectors best brand ambassador
is good customer service. The entire business process is made up of efforts to discover, develop,
arouse, and meet the needs of customers. Modern business has noticed this and is working hard to
become more "customer-centric" around the world.

As a result, CRM is a continuous process rather than a one-time event. It is a method of doing
business that encompasses all facets of modern business. It is a comprehensive approach to
communicating with customers that utilizes sophisticated information technology.

CRM is the IT face of a business process that seeks to build long-term, mutually beneficial
relationships with consumers in order to increase customer satisfaction, value, and profitability. It
is intended to benefit the two stakeholders—businesses and their customers—on an equal footing.
It necessitates gathering relevant information about prospective and current customers' purchasing
patterns, shopping habits, and use habits. It reflects the new company strategy of focusing on the
consumer.

CRM is a platform that can help you achieve a number of marketing goals, such as:

 To identify and represent customers on a one-on-one basis. It enables one-on-one

marketing. in contrast to mainstream marketing
 It aids in the development of long-term customer relationships.

CRM Technology Enables

In the service sector of Bangladesh, CRM technology use and implementation benefits in an
emerging market. As with many other modern business concepts, CRM has its origins in the
developed, Western world. However, owing to the marketing efforts of CRM technology vendors,
organizations in developing parts of the world are increasingly becoming aware of and adopting,
CRM principles and technologies to manage relationships with their customers. The other impacts
of CRM in the service sector are-

 Information about the customer to be stored in databases.

  Businesses to analyze that data, pull out customer preferences, and make clear their
behavior.
 Easy access to that data across departments that may be widely geographically dispersed.
 Easy access for customers in terms of online transactions.
 Speedy personalized communications that enable the customer to feel valued and special.

The Components for Successful CRM in the Service Sector

There are many different components of Customer Relationship Management that are essential to
run an organization towards success in the service sector of Bangladesh. Every component is
unique in itself and plays a major undeniable role in the process. Some mandatory components of
CRM are essential for the service sector. These components are-

 CUSTOMER KNOWLEDGE
 CUSTOMER ORIENTATION
 TECHNOLOGY CAPABILITY
 CUSTOMER SATISFACTION

Customer Knowledge: CRM collects data from the service sector related to customers, grasps
features of them, and applies it in specific marketing activities. Customer knowledge management
efforts are incorporated by customers as it impersonates a prominent function in the favorable
outcome of CRM. For the functioning of an efficacious CRM system, it is crucial for a firm to
simultaneously upgrade itself with customer knowledge as it corresponds to the field of CRM.
Customer knowledge is the knowledge about potential customers, customer segments, and
individual customers. Knowledge about customers has an explicit nature and includes looking into
customer’s backgrounds, transaction histories, customer motivations and wants, etc. which help
firms better understand customer’s needs. Consequently, CRM and customer knowledge
management initiatives are directed towards the delivery of continuous improvement towards
customers, which in return creates loyal customers in the service sector.

Customer Orientation: Numerous researchers have studied customer orientation and established
its influence on CRM outcomes in the service sector. For the sustenance of relationships with
customers, organizations must embrace a customer-centric culture and constantly deliver value to
customers. In the service sector, Successful implementation of CRM projects requires firms to be
customer-oriented. Customer orientation within a CRM system enables the system to support the
firm's marketing campaign efficiency, satisfies customer needs, and guides the organization’s
attitude toward the implementation of CRM activities. Customer orientation is a culture-based
concept and it reflects the values, behavioral norms, the shared mental modes that enable a firm to
put customers’ interest first. Customer orientation is a set of beliefs that put the customer's interest
first, while not excluding those of all other stakeholders; to develop a long-term profitable
enterprise.

Technology Capability: Customers can be consolidated, and their needs can be fulfilled with the
aid of CRM technologies in the service sector. Incorporating CRM technology enhances customer
loyalty, more profitable customer relationship, and higher customer retention. CRM applications
analyze data on customer patterns, customer behavior, develop predictive models, support
customer relationships, respond with timely and effective customized communications, and deliver
service value to individual customers. Technological tools have improved interactivity between
the customer and firm, and without technology, the entire customer’s data gathered by the firm
would be redundant. Technology in the case of banking comprises, for instance, automatic teller
machines, the internet, and mobile banking. Traditionally, CRM technology has facilitated the
collection, integration, and analysis of customer data and subsequent communication with
customers.

Customer Satisfaction: Customer satisfaction is a deeply held commitment to re-buy a preferred

product or service again. Customer satisfaction is a customer’s continued patronage of a particular
service. Customers are the key to success for many service organizations as retaining a customer
is 10 times less costly than acquiring a new customer. Customer satisfaction has become the most
important aspect of organizations because getting a new customer costs much higher than retaining
an existing customer. So organizations should focus more on customer satisfaction to be profitable.
Intense competition in the service sector is pushing the service organization to focus more on
customers, apply relationship marketing and perceive customer satisfaction as one of the most
important tasks.
 Importance of CRM in Service Sector

Importance of CRM in service sectors are described below:

 Delivering superior customer value has become a matter of ongoing concern in building
and sustaining competitive advantage by driving CRM performance (Wang et al., 2004;
Farokhian, 2010). CRM facilitates developing relationships with differentiated customers
via interdependent collaboration with those of highest value to the company (Lowe, 2008;
Sadeghi and Farokhian, 2010). As many researchers suggested, if companies want to
improve the performance of their CRM they must regulate their activities based on best
value creation thought (Ahmad and Hashim, 2010).

 Moreover, CRM can improve customer data and develop customer-centric (Berger and
Bechwati, 2000; Kim et al., 2003; Mithas et al., 2005; Seeman and O’Hara, 2006). From
the customer behavior perspective, CRM performance can increase customer loyalty,
retention and satisfaction (Kim et al., 2003; Fitzgibbon and White, 2005; Lari, 2008; and
Irfan et al., 2009).

 In line with the above argument CRM enables business to measure the behavior of
customers after they contact with the organization, such as decreasing of customer
complaint, repurchasing (Yoo and Park, 2007), and increases the volume of purchases
(Colleen and Yeol, 2007; Mashinchi and Selamat, 2008). CRM projects are located in the
commercial sector of information technology projects (Haghighat, 2008; Fasanghari et al.,
2008).

 Also scholars argue that, the success of any organization primarily depends on how
effectively the organizations manage relationships with the customers that lead to lifetime
customers (Jagdish et al., 2008). Customer relationship plays a major role in the
competence development of business. Managers have found that the enhancement of
existing customer relations cause the benefit of profitable and sustainable revenue growth
(Lin et al., 2006).
  Massey et al. (2001) argued that acquiring new customers can cost five times more than it
costs to retain current customers. Furthermore, repeat customers can generate more than
twice as much gross income as new customers (Winer, 2001; Fasanghari and Habibipour
Roudsari, 2008). The key to build lasting customer relationships is to create superior value
and satisfaction (Zangoueinezhad et al., 2009; Quee Ling et al., 2010).

 CRM involves building and maintaining profitable customer relationships by dealing with
all aspects of acquiring, keeping and growing customers (Kotler and Armstrong, 2010).
The overall purpose of CRM is to improve marketing productivity and to enhance mutual
value forthe parties involved in the relationship.

 Improving marketing productivity and creating mutual values can be achieved by

increasing marketing efficiencies and/or enhancing marketing effectiveness (Sheth and
Parvatiyar, 1995a; Sheth and Sisodia, 1995). They can also enhance marketing
effectiveness by carefully selecting customers for their various programs, by
individualizing and personalizing their market offerings to anticipate and serve the
emerging needs of individual customers, by building customer loyalty and commitment;
by partnering to enter new markets and develop new products, and by redefining the
competitive playing field for their company (Sheth and Parvatiyar, 1995).

 Furthermore CRM serve specific role in service sector. In this end, CRM consists of a
historical view and analysis of all the acquired or to be acquired customers. This helps in
reduced searching and correlating customers and to foresee customer needs effectively and
increase business in banking industry. CRM contains each and every bit of details of a
customer, hence it is very easy for company to track a customer accordingly and can be
used to determine which customer can be profitable and which not.
Implementation of CRM strategy in Service sector of Bangladesh
The success of any strategy is determined by the success with which it is implemented. This is also
true in the case of CRM strategies. Implementing CRM requires that the organization and the
associated business processes be in place in order to facilitate its success (Brunjes & Roderick,
2002).

The role of customer service in CRM strategy

In order to implement a CRM strategy, a key dimension is the question of customer service and
the way in which it is perceived by the recipient of the service. Customer service can be defined
as a task, other than pro-active selling, that involves interactions with the customers in person, by
telecommunication, or by mail. It is designed, performed and communicated with two goals in
mind: operational efficiency and customer satisfaction (Lovelock, 1991). The quality of customer
service is determined and evaluated by the customer, and this affects the desirability of a
relationship with the organization. Customer service creates the moments of truth with the
customer, and these service encounters need to be managed by the organization (Payne,
Christopher, Clark & Peck, 2001). Service encounters and CRM are thus associated.

The steps in the implementation of CRM strategy

In the countries like Bangladesh especially in service industry, successful implementation requires
specific actions on the part of the organization. The implementation of a CRM strategy as proposed
by Peppers, Rogers & Dorf (1999) comprises four steps, namely the identification of customers,
the differentiation of service, interaction with customers and the differentiation among customers.

Step 1: The identification of customers

The identification of customers enables the organizations to select those customers that they regard
as being strategically significant and who they believe can contribute to the success of the
organization. These customers have unique needs and due to their value to the organization, will
have products developed to meet these needs. It must be possible to identify these customers and
so obtain as much detail as possible. This involves collecting as much data as possible in order to
obtain as clear a picture as possible of the customer and their profile. Having this information
enables the organization to determine those customers that have been with the organization for a
long period and those that have recently started using the products and services of the organization.
Step 2: The differentiation of service

The differentiation of service implies that different customers receive a different level of service
and a different product from the organization, depending on the value to the organization and their
specific needs. This requires the organization to identify the top (or most significant) customers
and adapt service accordingly. Identification of these top customers takes place using sales figures
or by calculating the CLV associated with each customer. As the organization is aware of the value
of their customers, service levels can be adjusted accordingly.

Step 3: Interaction with customers

This step refers to the importance of interacting with the customer in relationship building efforts
through a variety of communication tools and technologies. This is necessary as the relationship
can only develop and be sustained if there is communication with the customers regarding their
needs, perceptions and desires. This involves developing methods of communication proactively
with customers regarding the organization’s products and attempting to initiate dialogue with
customers. Use can be made of technology, but this is not essential (Brunjes & Roderick, 2002).
The customers with whom communication takes place are not necessarily all the customers, but
only those that the organization regards as being strategically significant. This interaction with the
organization increases the expectations of the customers regarding the service received as well as
the quality of the relationship.

Step 4: Customization of products, services and communication

Customization is carried out by the organization in order to ensure that customer needs are met. It
requires that the organization adapts its product, service or communication in such as way have
something unique for each customer. Communication can be customized to address the specific
needs and profile the customer, and organization also makes use of personalization as part of this
process. Products can be customized as to the specific desires that the customer has of the
organization. In the case of the financial services, it refers to the product package that is offered to
the customer. The purpose of customization is to increase customer satisfaction, and the loyalty
that is exhibited by customers.
 Benefits of CRM:

Benefits of CRM can be categorized into three groups namely: Benefits for customers, benefits for
employees and benefits for organization.

1. Benefits for Customers:

 From governmental service sector people can get benefit like citizen engagement,
dashboard facilities, announcement alert etc.
 From healthcare side, they improve patient satisfaction and customer can get health status
and many more synchronizes care facilities.
 From hospitality industry customer can get information through mobile CRM app for hotel,
offer reminder email service and many more.
 In educational prospective students get quicker information by through social media
advertisement, educational consultancy farm. Student also get information about faculty &
staff management program, student recruitment and marketing program.
 From banking sector, customer can get up-to-date customer information, Banks can offer
more personalized services. Customers feel empowered if they have greater access to
products and services. For example, 24 Hours banking.
 From tourism sector customer can track tourism inquiry, reduce gap between expected &
adequate service, reduction in cognitive dissonance.

2. Benefits for Employees:

 Improve customer segmentation & centralized information quickly.
 Employees are empowered with the information to deliver high quality service and meet
customer expectations.
 Employees have more time to serve customers.
 Employees have higher satisfaction ratings.
 Achieving target sell in quick manner.
 Management communication with prospective lead.
 Streamline internal communication.
 3. Benefits for Organization:
 Managers are empowered with information that can help them manage customer
relationships and make better decisions.
 Optimum use of resources.
 Customer satisfaction and increased loyalty.
 Improved customer acquisition and cross-selling.
 It helps in capitalizing on short windows of opportunities in the market.
 Better customer service & increase sell.
 Improve customer retention with higher productivity and efficiency.

Challenges that faces Service industry in implementing CRM practices:

The following are said to be challenges faced by many of the banks whilst implementing CRM.
They are classified into the following main categories namely; getting management sponsorship;
quality of customer data; alignment of people and processes; lack of skilled people; determining
the right time for customer needs; using customer data more intelligently; incorporating customer
data and customer preferences to the customer data base; using right technologies; and real time
data across all customer channels.

Scholars have identified the barriers to Customer Relationship Management which are categorized
with regards to their effect on CRM strategy in a particular organization as follows:

 Lack of skills: The first barrier is a lack of knowledge about CRM mechanics. Personnel
in modern companies are not trained in corporate communication management, which
involves the creation of human relationships. The art and craft of public relations are not
taught formally or informally to staff who handle different facets of Customer Relationship
Management, including the use of information and communication technologies, putting
CRM gains at risk.
 Insufficient investment: The second obstacle to CRM in a company is insufficient
investment. Obtaining adequate funding for CRM requirements is a critical issue for
organizations, particularly because many projects have grown significantly in cost and, in
some cases, scope. Some organizations had resolved the funding issue by implementing
what was known as a "fast wins" strategy.
 Poor data quality and quantity: The third obstacle to best CRM is poor data quality and
quantity. Organizations at various stages of CRM growth face different challenges in terms
of data quality and quantity. Besides, failure to comprehend business benefit; low initial
understanding of the benefits of a marketing database among senior management is an
obstacle for companies that are less advanced in CRM implementation. This issue usually
resolves itself when the data warehouse goes live and starts delivering results.
 Functional Boundaries: In the early stages of a CRM project, managers at the functional
or business unit level can be hesitant or unable to cooperate. It can take a significant amount
of organizational effort to make functional and business unit managers aware of the
benefits of increased company-wide operations and cross-functional collaboration.
 Lack of Leadership and Top Management Involvement; Experience also shows that
top management is the least active in CRM operations, which are typically handled by
administrators, supervisors, and employees of the organizations involved. Their job is to
ensure that a high-level executive, preferably at the Board level, serves as a supporter and
advocate for the company's CRM activities, and that the Board and senior management
understand and share the value of transforming the company's relationships with customers
through CRM.

Imminence of CRM in service sector of Bangladesh

 Customer service levels are critical in establishing and developing relationships.

 Management got to examine existing processes and methods during which service is
obtainable, and where necessary make changes which may improve the service for
patrons.
 Training with reference to customer service and improvement within the service levels
offered by staff. This is often a key area within the development of future customer
relationships.
 In any implementation, it's necessary to spot, differentiate then interact with
customers so as to supply customized service. this needs that management have the
power to spot customers who are important to the organization then be ready to make
 sure that their needs are different. This may enable them to speak more appropriately
with the customer.
 Continuous interaction with the purchasers are necessary so as continue with
relationship building activities over the future. This might require new methods and
techniques in communication like the utilization of email, SMS and other
technological communication devices.
 The service sectors should have sufficient and dedicated resources for implementation,
including for training and data input/cleaning/extraction.
 It needs good communication and selling of advantages, including at individual level
to bring people on-board early.
 It is vital to spend time planning the project at a high level in order that CRM
results an extended time to embed and to understand benefits.
 It must be driven from rock bottom but supported from the highest.
 It may be a people based process involving business process development and
alter management, not an IT system implementation.
 The service sectors need to confirm they work together instead of duplicating
unnecessary information.
 Any institution that desires to undertake a CRM project should spend time learning
from a business perspective what a CRM system can and can't do. On reflection, a
drag we experienced was that we didn’t fully understand what a CRM system would
really do (other than record everything).
 In CRM, customers are grouped consistent with different aspects consistent with the
sort of business they are doing or consistent with physical location and are allocated
to different customer managers often called as account managers. This helps in
focusing and concentrating on each and each customer separately.
 Moreover, the strongest aspect of Customer Relationship Management is that it's very
cost-effective. This suggests, all the small print in CRM is kept centralized which is
out there anytime on fingertips thus, reduces the method time and increases
productivity.
  Efficiently handling all the purchasers and providing them what they really need
through satisfaction which successively increases the prospect of getting more business
which ultimately enhances turnover and profit of a corporation.
 Lastly but not least, CRM led to customer satisfaction, and thus , satisfied customer
will always be loyal to the organization and can remain in business forever, leading
to increasing customer base and ultimately enhancing net growth of business and
increase in profit and turnover of the entity.

Conclusion

The overall Service sector of Bangladesh has recorded an outstanding growth within the past
decade with the initiation of Economic Reforms. The service sector, both Public and personal,
have transformed themselves into profit-oriented business organizations besides playing a
developmental role within the economy. In an effort to be more profitable, the service
sectors became competitive and more customer – oriented. This new orientation has
compelled them to require a more pragmatic approach for conducting the business. The CRM
is one such tool which helps in meeting the customer’s expectations consistent with their
changing needs. Private Sector are ready to implement the CRM practices more effectively in
comparison to their Public Sector counterparts. This means that strategically speaking, the
Private Sector are more innovative in understanding their customers and in building good
relations with them. One important thing in service sector – customer retention suggests
that the world (whether public or private) are equally suffering from the type of CRM
initiatives they undertake to retain the purchasers. The service sectors are now under
tremendous pressure to retain the older customers due to the competition. This is able to not
only ensure better customer relations but also loyalty among them, which is extremely critical
and important in today’s competitive world. Service sectors have started acknowledging the
importance of the purchasers in developing their business. They need recognized
that it's essential to guard and grow its customer base and ultimately its profitability. The
service sectors can do that by building a robust relationship with the purchasers. To
satisfy the customer needs and to beat the competition, they need to deliver superior quality
service. Modern customers are satisfied with the usage of this type of technology oriented services.
Ensuring customer satisfaction is the main principle of marketing. Without ensuring customer
satisfaction, no business will be successful.

The CRM approach adopted by service sectors focuses on maximizing the worth for the
customer and their organization.