Table Of Contents:

Chapter 1 : Introduction to Study : CRM

Chapter 2 : Customer Relationship Management In Banks

Chapter 3 : CRM in ICICI Banks

Chapter 4 : Working of CRM

Chapter 5 : Challenges For CRM Implementation

Chapter 6 : Summary & Conclusion

Chapter 1 : Introduction to Study : CRM

Customer relationship management (CRM) is a business strategy that aims to

understand, anticipate and manage the needs of an organization’s and potential

customers. It is a journey of strategic, process, organization and technical change

whereby a company seeks to better manage its own enterprise around customer

behaviors. It entails acquiring and deploying knowledge about one’s customers and

using this information across the various touch points to balance revenue profits with

maximum customer satisfaction.

CRM is a management approach that seeks to create, develop and enhance

relationships with carefully targeted customers to maximize customer value, corporate

profitability and in turn, shareholder value. Customers are getting actively involved,

either directly or indirectly with production processes. It won’t be long before they

become valuable CRM stakeholders. CRM is a comprehensive approach which

provides seamless integration of every area of business that touches the customer –

namely marketing; sales, customer service and field support-through the integration of

people, process and technology, taking advantage of the revolutionary impact of the

Internet more effectively. An enhanced relationship with one’s customers can

ultimately lead to greater customer loyalty and retention and, also, profitability. In

addition, the repaid growth of the internet and its associated technologies has greatly

increased the opportunities for marketing and has transformed the way relationship

between companies and their customers are managed.

Chapter 2 : Customer Relationship Management In

Banks

Introduction & Evolution of CRM

Relationship management is a process of building long term mutually beneficial relationship

with the customers. The Financial Institutions in the developed countries are using this

marketing tool very effectively by taking full advantage of Information and Communication

Technologies.

The Indian Banking Industry which was operating in a Bureaucratic style prior to 1991 had

to undergo large scale transformation with the opening up of the economy. The Sector has

been facing unprecedented challenges with the wave of liberalization, privatization and

globalization of Indian Economy. Banks in India are under intense pressure in today‟s

volatile market place. Steep competition, globalization, growing customer demand and

exposure to higher credit risks are forcing the banks to find new ways of improving

profitability. On the other hand, cost-cutting measures have forced banks to manage

operations with few Customer Relationship Managers and Product Specialists. Industry

consolidation also poses fresh challenges to this sector. Even today, most of the banks in

India rely on the legacy of Customer Information System. In such a scenario, it is difficult to

have a complete customer view across divisions. They face unprecedented challenges to

sustain their growth path for survival. The challenges include customer retention, reducing

transaction costs, risk management and Regulation Compliance.

This result was huge proliferation in customer‟s choice. The strategic tool that was chosen

for aiding this process was Information technology and most of the banks went through
adoption of various stages and forms of IT over the years and the process is
still continuing. The rapid growth of Information Technology and its potential to

servethe customer in a new way awakened the marketers and enabled them to

transform these challenges into opportunities. Under these circumstances,

customer satisfaction became an important aspect of business. The search for new

strategies began to meet not only the high expectations of customers but the need

to retain them. The competitive world witnessed many banks participating in the

race to optimize their profits. It increased the pressure to perform leading to

adoption of advanced technology and better skilled work force.

Therefore, business model changed from bank-centric approach to customer-

centric approach. The customer became not only the essential but the most

important part of the business. The Service Sector has emerged as a key sector in

Indian Economy. The contribution from this sector to our GDP is approximately

56.5 % as per the current year’s Budget Report (2012-13). Including construction,

the contribution increases to 64.8 %. The continuous growth of GDP at 8% and

above has become possible due to the good performance of this sector. In the

post-reforms era, there has been a sea change in the financial sector. In such a

scenario, the services have grown rapidly and the customer has been more often a

purchaser of services than a product.

The Financial Services is the backbone of service sector. This is important not

only for the banking sector but of the Indian Economy as a whole. This is so
because banking is catalyst and life of modern trade and commerce. It is an

integral part of all the businesses and social activities. The rapid transformation of

services in the banking systems has led to evolution of a highly competitive and

complex market where there is a continuous Refinement of services. Hence,

the increased role of banking in India’s Economic development on one hand and

the changes in the business climate on the other has put increased pressure on

them. These changes are compelling the banks to reorganize themselves in order

to cope with the present conditions.

Now, the Financial Institutions are trying to provide all the services at the

customer’s doorstep. The customer has become the focal point either to develop or

maintain stability in business. Every engagement with the customer is an

opportunity to either develop or destroy a customer’s faith in the Bank. The

expectations of the customers have also increased many folds. Intense competition

among the banks has redefined the concept of the entire banking system. The

banks are looking for new ways not only to attract but also to retain customers and

gain competitive advantage over their competitors. The banks like other business

organizations are deploying innovative sales techniques and advanced marketing

tools to gain supremacy.

In the present Indian Banking Scenario, two prominent phenomena are the focal

point to emerging practices and policies. These are „Technology‟ and „Relationship

Marketing‟. The power of technology has revolutionized banking services and

practices. „Relationship Marketing‟ is seen as the only differentiating factor given

the almost commoditization of banking services. On observation of the recent

restructuring, rebranding and reengineering efforts of many banks, we find that the

key motive towards these is to utilize customer centricity as a strategy. Further,

catalyzing the importance of Technology and Relationship marketing is the Core

Banking Solution (CBS). All the banks have overcome the teething troubles of CBS

and it has become the axis of banks‟ growth and performance. Going further, most

of the Banks have invested in technology enabled Customer Relationship Management

Software to utilize CBS generated customer information for enhancing business

opportunities, access to customers and support. Thus, CRM is a logical progression of CBS

for Indian banks. Although at a nascent stage, it is developing swiftly. Customer

Relationship Management is the integration of these two cornerstones of Indian banking

viz. technology and relationship marketing. It has a potential to bring about dynamic

changes in marketing practices of banks in near future, with the objective of business

growth through managing customers as assets, systematically collecting, analyzing and

disseminating customer information and use of this customer information for acquiring,

retaining and better servicing customers. An understanding of the current status of the

CRM initiative in majority of banks suggests that only a minuscule of the potential of CRM

has been realized. The key impediment is the lack of understanding and acceptance of

CRM as an organization wide strategy and need for reorientation of organization structure

to adopt this. The paper investigates these issues and suggests a framework for reaping

the benefits of this investment in CRM by various banks.

Evaluation of CRM
One of the important marketing tools in the developed countries is Relationship Marketing.
The CRM is a comprehensive approach for creating, maintaining and expanding relationship
with the customers. It has emerged as one of the most widely prescribed solutions for
diminishing market share and sluggish growth of many industries in general and banking
and financial sector in particular. CRM is a simple philosophy, which places the customer at
the heart of the business processes, activities and cultures for improving customer
satisfaction and maximizing profits. In one of the encompassing definitions, CRM is
described as “the establishment, development, maintenance, and optimization of long
term, mutually-valuable relationship between the customers and the organizations. It is a
comprehensive approach for creating, maintaining and expanding relationship with
customers.

The concept of CRM is very important to the business sector. The essence of the business
had been described by Mr. Peter Drucker, the Management Guru as, “the purpose of the
business is to attract and retain a good customer”. Good Customer Service is the best brand
ambassador for any bank. The entire business process consists of highly integrated efforts to
discover, create, arouse and satisfy customer’s needs. The modern business has realized it
and is making all out efforts to become
„customer-centric‟ across the globe. Hence, CRM is not a once-for-all affair but a continuous

process. It is the way of carrying out business covering all aspects of the modern business. It

is an integral approach of dealing with customers by deploying the advanced information

technology.

CRM - Conceptual framework

CRM is the strategy for building, managing and strengthening loyal and long-lasting customer

relationships. CRM is a customer centric approach based on customer insight. Its ultimate

objective is towards „Personalized‟ handling of customers as distinct entities through the

identification and understanding of their differentiated needs, preferences and behaviors’.

A few more definitions which clarify CRM concept are –
 THE BACK OFFICE (General Manager, Manager
Finance, HR)

THE FRONT OFFICE (Cashier, Clerk)

THE CUSTOMER

According to Philip Kotler, CRM is the process of carefully managing detailed information

about individual customers and all customer „touch points‟ to maximize customer loyalty.

It can also be described as a business strategy comprised of process, organizational and

technical change to better manage business around customer behaviours.

Components of CRM
It is bundle of sales, Marketing and Customer support applications. Integration of the

applications through the web makes the CRM applications really attractive. Transactions are

tracked through CRM and Data mining is used for the analysis of data.

Emergence of CRM
The primary reason for the emergence of CRM is the change in the marketing

environment. Today marketing model is changing from the product-centered approach to

customer-centered approach. Organization needs to create customized offers for

customers and ensure relationship by providing better customer service and management

of customer expectations. So, marketing should be devoted at enhancing customer

relationships. But one should take note of the increasing use of the internet which is
changing what is possible and what is expected in terms of CRM as technological advances

in global networks, convergence and improved interactivity are to explain the growth of

CRM. Now companies should go beyond CRM towards whole relationship management by

managing superior value chain delivers a high level of product quality, and service quality.

From relationship marketing to customer relationship marketing

The concept of relationship marketing was first founded by Leonard Berry in 1983. He

considered it to consist of attracting, maintaining and enhancing customer relationships

within organizations. In the years that followed, companies were engaging more and more in

a meaningful dialogue with individual customers. In doing so, new organizational forms as

well as technologies were used, eventually resulting in what we know as customer

relationship management.

The main difference between RM and CRM is that the first does not acknowledge the use of technology,

where the latter uses Information Technology (IT) in implementing RM strategies.

Chapter 3 : C R M in ICICI Banks