National University Students’ Skill Development Programme

BANKING & FINANCE

MODULE 1 – CUSTOMER RELATIONSHIP MANAGEMENT

MODULE 1 CUSTOMER RELATIONSHIP MANAGEMENT
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 MODULE OBJECTIVE

 At the end of this module, students will be able to:

• Define Customer Relationship Management

• Explain the importance of Customer Relationship Management
• Explain how CRM can be organized in banks
• Explain the marketing the operational aspects

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CHAPTER 1: INTRODUCTION TO CRM

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DISCUSSION

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 CUSTOMER SATISFACTION

Source:https://image.slidesharecdn.com

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ACTIVITY

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ENVIRONMENTAL ASPECTS FACILITATING RELATIONSHIP MARKETING

CRM as a concept aims to help the organizations in creating

a loyal set of customers based on life time value.

CRM considers value of a customer based on potential value

of customer

CRM concept is being applied on them to attract, retain and

terminate the relationship with them.

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ENVIRONMENTAL ASPECTS FACILITATING RELATIONSHIP MARKETING

Factors Description

Technological Increased penetration of Internet and other

technologies has increased the interaction level of
customers and organizations.

Social The shift from traditional institutions and way of

life and increased value of materialism.

Economic Economic benefits relationship marketing for

organizations as well as customers.

Political Regulations and policies facilitating the increased

collaboration within and between organizations as
well as customers.

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 CUSTOMER RELATIONSHIP MANAGEMENT

A strategic
orientation that
focuses on
Improving the
CRM is a keeping
relationship with
philosophy of relationships
the current
doing business with current
customers
customers rather
than on acquiring
new customers

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 BENEFITS OF CRM

Reduce acquisition costs and increase profitability has been

accepted by organizations.

Helps in identifying customers who are not only giving any profit
at present but also is not likely to give any profit in future.

Customers Relationship Management has become a centre of

attention for business organizations.

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 DIFFERENCE IN FOCUS BETWEEN TRANSACTIONAL AND RELATIONSHIP
MARKETING

Transactional marketing Relationship marketing

Volume Profit

Product Consumer

Short term orientation Long term orientation

Low to moderate level of customer contact High level of customer contact

Low switching cost High switching cost

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 CRM INITIATIVES

• CRM initiatives can be directed to help the organizations in one of the following four ways-

Helps in attracting
Acquisition: new customers

Helps in retaining
existing customers
by maintain and
Retention: developing better
relationship with
them

Churn is about
attrition of customers
and CRM helps in
Churn: managing the rate of
customers leaving the
organization
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PHASES IN RELATIONSHIP

Initiation Phase

Maintenance Phase

Termination Phase

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HOW CUSTOMER RELATIONSHIP EVOLVES

Customers as strangers

Customers as acquaintances

Customers as friends

Customers as partners

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PRIMARY GOAL OF RELATIONSHIP MARKETING

ACQUIRING

SATISFYING

RETAINININ
G

ENHANCING

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ICICI CRM Components

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 CUSTOMER SATISFACTION

Customer satisfaction is the degree to which a product or

a service meets the customer’s expectations.

Customer satisfaction is a perceived value and is often

measured through surveys.

While customer satisfaction is important in building

customer relationship and loyalty, it need not always
result in repurchase by the customer.

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CUSTOMER LOYALTY

An attitudinal and
behavioural tendency to
favour one brand over all
others

Customer loyalty encourages

consumers to shop more
consistently, spend a greater
share of wallet

Helping attract consumers to

familiar brands in the face of
a competitive environment

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CASE STUDY

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CHAPTER 2: STRATEGY AND ORGANISATION OF CRM
 
DISCUSSION

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 CASE STUDY

• Divide the class in groups of 4.

• Allocate 1 local Bank to each group. It would be beneficial if someone in the group banks with the bank
branch.
• Ask them to present on the changes they have seen in their bank in terms of service, automation and other
factors that impact service (ex: time taken to make a DD, to open an FD, Token system for queue, etc.)

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 Role Play

• Let one person be the Bank employee and one be a customer.

• Give them a situation of enquiry / service/ complaint. The employee then serves the customer with a
view to build a relationship, rather than completing the transaction
 

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STRATEGY AND ORGANISATION OF CRM -MEANING

CRM is not a once-for-all

affair but a continuous
process.

It is the way of carrying out

business covering all the
aspects of the modern
business.

A comprehensive approach
for creating, maintaining and
expanding relationship with
the customers.

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 ACTIVITY

• Ask the class what competitive advantage the company gets from developing customer relationships.
Discuss in detail. 

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 CASE STUDY

• Case Study: Give the class 15 minutes to read the case study. Discuss how CRM is enabling
businesses to be competitive.
 

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IMPORTANCE OF CRM IN BANKING

WELL-
COMPETITIO
INFORMED
N
CUSTOMERS

DECLINE IN
LOWER PROFIT
BRAND
MARGINS
LOYALTY

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 CRM In Banks

SOURCE:https://image.slidesharecdn.com

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FACTORS THAT IMPACT CUSTOMER RELATIONSHIPS

CORE BANKING
SERVICE

CONCEPT OF
INCREASE IN
RELATIONSHIP
NUMBER OF
CUSTOMER Factors MANAGERS AND
CUSTOMER
TOUCH-POINTS
GRIEVANCE

MOST IMPORTANT
DIMENSIONS--TRUST,
COMMITMENT,
SATISFACTION AND
COMMUNICATION

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 BUILDING BLOCKS FOR CRM SUCCESS

CUSTOMER
KNOWLEDGE

INDIVIDUAL
RELATIONSHIP
VALUE
STRATEGY
PROPOSITION

INDIVIDUAL
VALUE COMMUNICATION
PROPOSITION

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BUILDING BLOCKS OF CRM

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 CONCEPTUALIZING CRM IMPLEMENTATION

BUILD TOOLS
RELATIONS FOR
HIPS WITH TARGETIN
THE G THE
TARGETED CUSTOME
CUSTOMERS RS

COMPILE A METRICS FOR

DATABASE MEASURING
OF PRIVACY
ISSUES THE SUCCESS
CUSTOMER OF THE CRM
ACTIVITY PROGRAM

ANALYSES,
DECISIONS
ANALYSES ABOUT
OF THE WHICH
DATABASE CUSTOMERS
TO TARGET

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 CROSS-FUNCTIONAL APPROACH
 

STRATEGY DEVELOPMENT

VALUE CREATION PROCESS

MULTICHANNEL INTEGRATION PROCESS

PERFORMANCE ASSESSMENT PROCESS

INFORMATION MANAGEMENT PROCESS

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ACTIVITY

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CASE STUDY

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CHAPTER 3: CRM MARKETING AND OPERATIONAL ASPECTS

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DISCUSSION

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ACTIVITY

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 CRM MARKETING

• A relationship oriented organization must consider how to market its products and services.

• Specifically they must consider and plan which customers, how to communicate, which
products to sell, how to sell and how to retain them and get them to be advocates of the firm.

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 CUSTOMER KNOWLEDGE

With the help of CRM,business can provide better customer service

Help sales staff close deals faster

Simplify marketing and sales processes, discover new customers

For example, many financial institutions keep track of

customers' life stages in order to market appropriate banking
products.

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 STEPS IN CUSTOMER KNOWLEDGE

Identification of the customer or prospect: Basic information as

name, address, city, phone number etc.

Segment: To which segment he/she belongs is important so as to

communicate with appropriate products

Communication channel preferences

Communication history to avoid repetition.

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 SEGMENTATION

Customer segmentation is the practice of dividing a

customer base into groups of individuals .

Similar in specific ways relevant to marketing.

Helps companies determine which segments are the

most and least profitable so that they can adjust their
marketing budgets accordingly.

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 BASIS OF PROFITABILITY

• On the basis of profitability, customers can be segmented according to the Customer Pyramid-

PLATI
NUM
GOLD

IRON

LEAD

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CUSTOMER PYRAMID

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 B2B RELATIONSHIP MARKETING

The Business-to-Business Relationship Performance scale is presented as a high

order concept.

Managers operating in a B2B e-marketplace, findings reveal that greater

relationship performance results in better 1) relationship policies and practices,
2) relationship commitment, 3) trust in the relationship.

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B2B RELATIONSHIP MARKETING

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B2B RELATIONSHIP MARKETING

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 B2B MARKETING PROGRAMS

• B2B marketing programs may be categorised:

Financial Include discounts, free

Customers attracted
Relationship products, or other
by such incentives
financial benefits that
Marketing may be deal prone and
reward customer
less profitable to serve
Programs loyalty

Include meals, special

These programs are
treatment,
Social Relationship entertainment, and
believed to have a
strong impact on
Marketing personalized
relationships
information
Programs

Structural Increase Customers increase

productivity or their business with
Relationship efficiency (or both) the seller to take
Marketing for customers full advantage of
through these value-
Programs investments enhancing linkages

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 SEGMENTATION IN BANKING

Help to create more targeted product communications

and bundled services

It is easy to identify the best predictors of customer

behaviour as well as buying patterns.

Very useful in cross-selling or, up selling to customers.

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 ACTIVITY

• Role Play: Ask 2 volunteers to be a bank employee and one volunteer to be the customer. Have them
play the roles in the case study as it is.
• Discuss the case study and the questions given at the end of the case.
• Role Play: Ask 1 more person to be a volunteer and be the employee. Now the role play is about how
the sale must progress to serve the customer ideally.
• Additional role plays may be developed, for example:
• Rohit is a 33 year old married executive, with a 5 year old son. What financial products can be sold
to him?

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SEGMENTATION BASED ON LIFE-STAGES

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IMPACT OF CRM ON MARKETING

CUSTOMER CUSTOMER
COST REDUCTION
SATISFACTION ACQUISITION

REVENUE
INTERACTIVITY PERSONALIZED
ENHANCEMENT
BANKING

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IMPACT OF CRM ON THE SALES FORCE

ENCOMPASSES
COMMUNICATION WITH
CUSTOMERS

ACCELERATION OF
ORGANIZATIONAL TASKS AND
PIPELINE MANAGEMENT

HELPING SALES EXECUTIVES

EFFICIENTLY AND
EFFECTIVELY COMPLETE
TASKS

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OPERATIONAL CRM

MARKETING
AUTOMATION

SALES-FORCE
AUTOMATION

SERVICE
AUTOMATION

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 CUSTOMER RELATIONSHIP MANAGEMENT AND IT

Customer relationship management (CRM) is a

combination of organizational strategy, information
systems, and technology.

CRM can also be considered a corporate strategy because

it is a fundamental approach to doing business

Companies that adopt CRM approach are called

customer-centric, rather than product-centric

To be customer-centric, companies need to collect and

store meaningful information in a comprehensive
customer database
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 Customer Relationship Management and IT

A customer database contain the customer's history of past purchases,

demographics, activities/interests/opinions, preferred media, and
other useful information.

Organizations are now asking how they can change their business
processes to use the customer data that they have gathered.

CRM is changing into a business process instead of just a technology

process.

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 CUSTOMER LOYALTY

A loyal customer is one who:

MAKES REGULAR REPEAT PURCHASES

PURCHASES ACROSS PRODUCT LINES AND SERVICES

REFERS OTHERS

DEMONSTRATES IMMUNITY TO THE PULL OF COMPETITION

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ACTIVITY

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WHEN IS RELATIONSHIP MARKETING APPLICABLE?

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 LOYALTY PROGRAMS

A way for the retailer to encourage the continued patronage of

customers

Loyalty schemes take many forms; some of the most common

include rewards cards.

Such as CVS's Extra Care, and pay-for-membership cards for stores

including Costco.

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TYPES OF LOYALTY PROGRAM USERS

NEVER
CUSTOMERS

LIGHT
LOYALTY
USERS

HEAVY USERS

EXTREME
USERS

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 CASE STUDY

• Give the class 30 minutes to study.

• Why loyalty programs are prevalent and how they benefit both the customer and the
company?
• Discuss the questions at the end of the case.

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ACTIVITY

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RECAP AND Q&A

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