crm artical
TRANSCRIPT
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PARTICIPATION OF EMPLOYEES IN CUSTOMER
RELATIONSHIP MARKETING:
A CASE OF INDIAN BANKING SECTOR
Gagan Deep Sharma Mandeep Mahendru Nidhi Khanna
ABSTRACT
The way in which companies interact with their customers has changed dramatically over
the past few years. Customers loyalty towards company is no longer guaranteed in this
competitive environment. As a result, companies have found that they need to understand
their customers better, and to quickly respond to their wants and needs and that also
within shrinking time frame. They want to be proactive in their approach, where the
problem starts; while the companies actually loose the customers through their sensitive
approach. Today, there are many ways a customer can interact with a bank including via
salesperson, web site, catalog, e-mail, trade show exhibit or advertisement. With today's
technology, it's possible for each of these contact points to be driven from the same base
of information about the customer. But the problem lies in the coordination of these
technologies where sales force doesn't know about customers' interactions with the
banks web site, call center doesn't know the customer was visited by a salesperson last
week or the bank sends e-mail without consideration of recent catalog purchases.
Consequently, the customer thinks that the banks activities are not coordinated. The
requirement today is of integrated customer information architecture to support all these
applications and thereby preventing coordination problems. The objective of this paper is
to discuss about the need for integrated customer information architecture by segmenting
and analyzing what the banks have and then serving the customer with right approach.
But this is one of the challenging tasks. The challenge is to extract the necessary
customer transaction data from these discrete applications and incorporate that data in our
CRM-ready data warehouse. It is then that we have "closed the loop" and can truly attain
one-to-one marketing relationships with our customers.
Keywords: Competitive environment, customer loyalty, information architecture
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I. INTRODUCTION:
Within turbulent, highly competitive marketplace, banks are finding it increasinglyimportant to respond both quickly and effectively to changing patterns of customer
demand. Who are banks customers and what are their needs and aspirations? If banks
dont know the profitability by customer, how can banks be sure that they are servingtheir best customers and applying their value to all business decision? If banks had themeans to do both, profits would soar. Not only would banks become more efficient, the
shareholders would see an investment in their only real source of revenue, the customer,and the meaningful profits that result. With so few new revenue opportunities, do banks
need more branches? Or instead should banks consider a customer relationship
management program that uncovers and maintains shareholder value. Banks need toknow and understand those customers who contribute the most to their bottom line.
Banks in todays global marketplace are faced with increased competition and shirkingprofit margins. The challenge is sustaining and creating profits in the face of heavier
competition and product homogenization. The opportunities are in managing customer
relationships, controlling costs and applying customer profitability to the entire business.This paper begins to define, CRM and e-CRM; then identify the drivers for Banks toadapt e-CRM strategy; followed by studying the impact of CRM practices on banks
dealings and discussion of Employees perception regarding implementation& effect of
CRM in banks; finally, the researcher suggest a framework for the better CRM Practicesin banks.
Definition of CRM (Customer Relationship Management)
First of all, it must be understood that at its core, CRM is more than just a set oftechnologies: it is a process. Simply stated, CRM comprises the acquisition and
deployment of knowledge about customers to enable a company to sell more of theirproduct and service more efficiently (Flanagan and Sadie, 1998).
Providing customers with a good experience however and whenever they choose to
contact you is a key part of managing relationships with them. Ovum defines customer
relationship management (or CRM) as:
A management approach that enables organizations to identify, attract and increase
retention of profitable customers, by managing relationships with them. (Bradshaw,
2000).
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Figure 1: Key Elements of CRM Architecture (Source: META Group)
Business DriversWhy CRM
There are three primary reasons why CRM has taken hold as rapidly as it has:
1. Competition is fierce;
2. The economics of customer retention are unequivocal;
3. Technology allows banks to do this more effectively and profitably today.
Positive aspects of CRM in Banking Sector
IMPROVING CUSTOMER SATISFACTION: Customers are also looking beyond a
banks products to see whether the operation as a whole addresses their needs. Theyare willing to abandon established allegiances if their needs are not being met or if theservices they require are available elsewhere at a lower cost. In addition to juggling a
broader range of business lines, financial institutions must manage a longer
customer-relationship life cycle. They must turn every customer transaction into ahighly personalized, meaningful interaction and then forge these interactions into a
firm relationship that prompts the customer to make additional purchases. This meanscontinually reinforcing the value of their operations to both their customers and their
business partners. Through targeted marketing, financial institutions can increase
brand value and recognition. Today, banks must leverage the power of their brandwhile increasing its value in the face of new competition from traditional andnontraditional players. With proper branding a bank can enjoy:
Increased market share as the positive value associated with the productsand services and attracts more customers.
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The ability to charge more for products and services because customersassociate trust, reliability, and other positive attributes with companies thathave brand-name recognition.
The ability to test and launch new products because of the positive effectof brand awareness on customer acceptance.
ENHANCING PROFITABILITY: Of course, improving customer satisfaction is notenough. To stay competitive, financial institutions must also improve profitability.
They must identify the areas of business that are most profitable and find the meansto cross-sell and up-sell those business lines more effectively.
With higher product penetration per customer, it becomes easier to draw a biggershare of the market. As more products are sold, profitability rises. As customers
develop a deeper relationship with the company, customer retention increases
further expanding market share. Frequently, however, banks lack the businessintelligence to make key decisions in sales, marketing, or service. Banks must also
overcome a range of technological hurdles, including systems for data collection that
are highly fragmented and redundant.
Operational information of an individual customer may be stored in several places by distribution channel, product, or company division and accessible only through
those paths. Data may also be decentralizeddue to changes in company structure, a
merger, or an acquisition. Besides having an incomplete picture of individualcustomers, marketing strategists and sales representatives may find it difficult to
collect all data for the household in which a customer lives. In either case, the bankfaces significant barriers for cross selling, up selling, and otherwise extending the
customer life cycle.
A well-integrated CRM solution that is truly synchronized with the Internet and
enterprise applications, external customers, business partners, and suppliers canfacilitate the compilation and analysis of data that empowers financial institutionssales force, customer support team, and supply chain partners.
OPERATIONAL EXCELLENCE: To achieve operational excellence, a bank mustintegrate its sales and service functions across multiple channels that provide
personalized portals for the banks customers and employees. From face-to-face
contact to self-service web sites, they must capitalize on every communicationopportunity. An effective CRM solution must, therefore, support all channels of
customer interaction including telephone, fax, e-mail, the online portals, wireless
devices, ATMs, and contacts with bank personnel.
It must then link these customer touch points to an operations center and connect theoperations center with the relevant internal and external business partners. With this
capability, a banks employees can be alerted to significant customer events (such as
a large deposit or a diminishing credit line) and be prompted to take the appropriateaction.
Every employee is armed with the appropriate knowledge and tools to focus on thekey business goals of their business lines and grow assets under management. The
CRM solution should also be able to track all aspects of the banks relationship with a
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customer and give the customer consistency in that relationship. Ideally, a customershould be able to initiate a transaction though one channel, such as the operations
center, and complete it through another, such as the banks Web site.
Fig: 2 POSITIVE ASPECTS OF CRM PRACTICES
BENEFITS FOR CUSTOMERS
Customers feel empowered if they have greater access to products and servicese.g., 24-hour banking.
There is a more coordinated and professional approach to customer contact.
With up-to-date customer information, businesses can prepare more personalizedservices.
Quick reaction to their problems.
BENEFITS FOR EMPLOYEES
Employees have more time to serve customers and fulfill orders.
Employees are empowered with the information to deliver high quality serviceand meet customer expectations.
Employees have higher satisfaction ratings. Managers are empowered with information that can help them manage customer
relationships and make better decisions faster.
BENEFITS FOR BANKS
There is optimum use of resources.
GOOD QUAL ITY PRODUCTS & SERVICES
IN CREASES CUSTOMER SATI SFACTI ON
IMPROVES REPUTAT ION OF BANK
ENHA NCES SALES
REDUCES COST PER UN IT
INCREASES PROFITABILITY
ENHANCES MARKET SHARE
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Providing consistent personalized experiences increases customer satisfaction andloyalty.
There is improved customer acquisition, retention, and cross-selling.
Improved company image in the minds of the customers.
CRM ChallengesThe e-business capabilities of Banking addresses the key CRM challenges that face thebanking industry today, including how to:
Identify customers that have the most assets and would be the most profitable.
Identify the most profitable products
Cross-sell and up-sell products that are most relevant to a customers life stageand financial needs.
Improve customer service while reducing service costs in basic areas, such asaccount inquiry, transfers, the trading of financial instruments, and cash
management.
Find strategies to eliminate current operational inefficiencies. Implement technology that leads to enhanced productivity of customers, partners
and employees.
II. REVIEW OF LITERATURE
Banks basically sell variations of the same service, i.e. they lend money, accept deposits,and move money around. But in recent times price-led strategies are being increasingly
used to provide more customized products and higher quality service not just to retaincustomers but also to attract new ones. This study shows how banks have done just that,
through their Customer Relationship Management (CRM) initiative
Ai Mier (April, 2007) confined that most commercial banks do not consider themselvesas an agent providing service to customers where customers are clients who deserve to be
served. It starts at the counter. Many people experience an average waiting time of
more than an hour and this wait goes on whilst staff behind the counter proceed with
their work at a slow pace and laughing and joking at the same time.. The bank is dealingwith tens of thousands of customers at the counter every day; therefore the customer
relationship management foundation should start from that point. That being said, tomake the customer feel at home is a goal that is easier to talk about than actually execute.
Next, lets review the status of the customer service center in a bank. To be honest,
generally the telephone service is much better than counter service. Many commercial
banks have installed national, uniform and advanced devices. Thirdly, how should abank orientate the value-added services? This question stems from the 24-hour self-services ATM machines that we can find in every street. Most banks have set up theirown ATM networks. However, most people are concerned about whether they canwithdraw or deposit the money they earned laboriously promptly at any place or any
time. The success of CRM starts when the bank can meet the basic needs of its customers
through more conveniently located ATMs and extended counter banking hours (e.g. afterthe normal work day or on public holidays). Fourthly, the orientation of additional
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services provided by the bank. Hence, bill payments services should be a starting pointfor the bank to mine for / collect personal information, it can use this to establish a
formidable database.. In a sense, the areas a bank should pay attention to are close to any
customers heart.
Eckenrode (Sep 2005) affirmed that the capability to integrate two or more deliverychannels through shared technology has only recently been deployed in any significantway. Today, a handful of retail banks can boast of globally integrated delivery channels
that are built on standard technology principles. These channels can, for example, deliver
consistent balances regardless of the customers location because of the consistentarchitecture. IT managers within the bank, as well as business managers that rely on the
delivery channels to service their products, know deep down that integrating the channelsis the right thing to do because some benefits of channel integration are intuitive if not
scientifically provable. The example of inconsistent account balance information is onethat integrated delivery channels can solve and that most bankers agree is a source of
frustration for the customer. Quantifying the effects of fixing this problem proves to be
tricky, however.
According to Frederick Reichheld (Resources, 1999), if the average company were to
boost its rate of customer retention in life or auto insurance, for example, by just 5 per
cent, it would realize an increase in customer profitability of more than 80 per cent in thatline. This phenomenon is shifting the attention away from attracting new realized that as
important as winning new customers, is retaining profitable customers. According to oneexpert, one should insurance life not just once, but every time one feels there is a change
in his life profile.
Business Online (Jan 2002) Too often it is the customer who is left out of the customer
relations management (CRM) equation. Using financial services as an example, MichaelKelly 2002 decides that it is crucial to look at things from the customers perspective if
CRM projects are to succeed. For the year 2000, industry analysts the Gartner Groupcalculated that 45 per cent of CRM projects failed. Of the top 10 reasons, it cited limited
or no input from the customers perspective as being the fourth most seriouscontributing factor to failure. Too often boardroom members were saying, to their
detriment, we already know what the customer wants, when they patently didnt. When
devising and carrying through a CRM project, customer input is vital for success, forobvious enough reasons. So every CRM project should start with these simple questions.
What is our strategy for dealing with customers? What are we trying to understand?
What does the customer want? Customers want three things from their provider: value,
convenience and want to be recognized and valued as an individual.
According to Gartner Group, customers leave a company for a variety of reasons.
Fourteen per cent move to competitors.
Four per cent die.
68 per cent leave because of poor customer service.
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Gartner Research (2005) concluded that 90% of CRM initiatives will balance the needsof improved customer experience with improved customer organizational collaboration.
Today particularly for the industry best 3-C: Cooperation, Communication & Courtesy
has changed from customer acquisition to retention.
Gil (Dec, 2006) Customers and prospects are demanding more relevancy and
personalization with their campaigns. If they dont recognize messaging or offers that arepertinent to their job function, your marketing goes directly to their trash bin. Unless you
prove youre relevant to them, they wont care to hear your message or take action uponit.
Harward Business Review Statistics (2002) unfolds that5% increase in retention can
result in a bottom line profit increase of up to 75% depending upon the industry. The
dramatic economic power of customer retention is revealed when viewing customers interms of Life Time Value (LTV). The value of retaining customer makes perfect business
sense when one considers that a customer retained for life is more cost effective, requireless service, provides more business & contributes to new customer acquisition by
offering positive referrals. Thus, customer retention guarantees significant current &future economic benefit.
A study carried out on behalf of Indian Banking Association (IBA) on CRM (2000)concluded that customer retention is an issue that is being faced in foreign & new
generation private sector banks. The study covered customers & employees of variousbanks. The study revealed that customer retention was strong among nationalized banks
as compared to upcoming private and foreign banks although, the level of customersatisfaction was very high in upcoming private and foreign banks than in case of
nationalized banks.
Joshua & Moli (Sep 2005) evaluated that recognition of Service Quality, as acompetitive weapon is relatively a recent phenomenon in the Indian Banking Sector.
Prior to the liberalization era the banking sector in India was operating in a protected
environment & was dominated by nationalized banks. Banks at that time did not feel theneed to pay attention to the service quality issues & they assigned very low priority to
identification & satisfaction of customer needs. After liberalization, the nationalizedbanks & the old generation private banks started facing competition from the new private
& foreign banks that had international banking standards. These new generation bankswere characterized by the usage of modern information technology endorsed services like
ATM, tele-banking, online systems, etc.
Lee (Nov. 2006) In the words of Dick Lee what remains to be proven is whether large
and larger banks can actually make the transition to a more customer-centric state and Ibelieve they can, if they go about it the right way? Heres a potential scenario:
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First, the bank thats breaking ranks, which well call Customerbank, needs to researchits markets to learnand accepthow customers want it to behave toward them. Based
on this input, Customerbank should engage is serious planning to identify how to deliver
new value to customers.
Next, Customerbank should assemble a cross-functional team of its key managers and
customer-contact staff to design the new work policies, workflow and information flowrequired to meet customer expectations and deliver new value to customersof course,
deliver new value in ways that would deliver value back to Customerbank.
Then, Customerbank should select two or three pilot branchesrather than the entire
systemto test whether and how increased customer-centricity leads to increasedprofitability. Managers and employees of these branches would not only have their
positions and incomes guaranteed, but also theyd receive a substantial bonus forparticipating in the test.
Within these branches, Customerbank should train all customer-facing employees,
including customer service center staff; in a relationship-building sales/service approachwith heavy emphasis on customer needs identification. An essential component of this
training is communicating and reinforcing the concept that without a legitimate customerneed, there is no sales opportunity. And Customerbank should also redesign employee
compensation plans to further motivate staff to do it the customers way.
Further, Customerbank should empower test branch employees to flex on policies and
even interest rates when mitigating circumstances occur (without taking undue risks orviolating regulatory standards). Customers desperately want to interact with people who
can help them, rather than puppets that recite rules.
And finally, Customerbank should gauge the outcomes of new customer interactions with
the bank. Properly implemented, a customer-centric approach to customers should
increase, not decrease, profitability.Research conducted by Reichheld and Sasser (2002) in the Harvard Business Review,
revealed:
5% increase in customer retention can increase profitability by 35% inbanking business, 50% in insurance & 125% in the consumer credit card
market. Therefore, banks are now stressing more on retaining customers &thereby increasing market share.
Although it seems that increasing customer satisfaction will increasecustomer retention & therefore profits, the facts are contrary.
Long-term relationships with customers are therefore more profitable as
retaining existing customers prevents competitors from gaining marketshare. Loyal customers are likely to recommend products & services. It ishard to concentrate on acquisition quality when quantity is so much
easier. Winning more & more customers could slowly put you out ofthe business.
Sharma & Nagpal (Mar, 2006) confined that in todays competitive scenario thebiggest challenge for a bank is where it should look for customers for canvassing
business. The manager generally tries out his contacts to meet the objectives. With the
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growing focus on retail business to attract customers & handle competition, the need forsetting up a well knit marketing function, has become crucial for the bank. They have
the ultimate responsibility for creating new customers and retaining existing ones.
Marketing Customer Information File (MCIF) can reduce the pain of the banks byproviding readily available report for Direct Marketing & setting up a system of CRM
(Customer Relationship Management)..
Uppal & Rimpi (Feb 2007) acknowledged that after the introduction of the IT Act,
Public Sector Banks are facing severe technological competition from their counterparts.In the present era it is not an option for the PSBs to adopt IT, rather it is a necessity for
their survival. He suggested some of the strategies, which can be adopted to improve theirworking:
Make the employees and customers aware & familiar with every aspect related toe-channels.
Merge some branches to make them stronger & efficient with the implementation
of IT infrastructure. Establish Computerization & introduce e-channels at the rural & semi-urban
branches.
Provide customer services at the cheapest rate to retain customers in this cutthroatcompetition.
Formulate appropriate HRM policies to provide excellent working conditions toget best services by making their utilization optimum.
Arrange training programs for the employees to make them more efficient forproviding services through e-channels.
Studies have proved the worth of CRM in turning the customer service into customer
sales. CRM works on the theme of retaining existing customers i.e. most businesses getcustomers but successful businesses keep them. Keeping customers happy is not just
good public relations; its an essential part of sound business strategy.
III. RESEARCH METHODOLOGY:
Research methodology indicates the selection of sample respondents, collection of data,choice of statistical tools for analysis of data.
Methodology adopted:
The research is aimed at studying the CRM (Customer Relation Management) Practicesfollowed by the public as well as private sector banks. The city covered under the
research was Ludhiana.
The major consideration of selecting this city for the study was that this city has hugepopulation with relatively assured income and large number of banks.
Data Collection Method:
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In this study, sample survey was conducted; primary data was collected by structuredquestionnaires (Annexure), which solicit information about CRM practices practiced by
banks and what type of facilities customers are receiving. Secondary Data was also
collected from magazines, journals, Internet, newspapers, etc.
Sample Plan:
Sample unit: The study was limited to employees of public & private sectorbanks of Ludhiana city. Six banks were selected randomly, in which three werenationalized banks i.e.: State Bank Of India (SBI), Punjab National Bank (PNB)
and Punjab & Sind Bank (PSB) whereas Centurian Bank Of Punjab(CBOP),HDFC Bank and ICICI Bank were selected in the private sector bank category for
the study.
Sample size: Since CRM practices are being used by the banks employees toattract, satisfy & retain the customers for maintaining long term relationships with
them; for this present study 5 employees of each bank were randomly selected.
Sampling technique: For conducting this study, convenience-sampling technique
was used. As under this technique, sample of respondents was chosen accordingto the convenience.
Data Analysis & Interpretation:
After completing the study of questions asked from the respondents, data was tabulated by
calculating the frequency of response & interpreted by using tables and percentage wascalculated and conclusions were drawn there from. Charts were also drawn to present the
data.
IV. FINDINGS:
Broadly speaking, the study revealed that CRM is gradually picking up and is definitelyconsidered as a viable proposition by banks in improving services to their customers. Oneof the major challenges experienced during implementing CRM is resistance to change.
To get CRM to work, high commitment is required in those who are implementing it.
Exhibit 1 shows the perception of three types of employees, vis--vis, poor, average,excellent, towards the CRM.
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Exhibit 1
Exhibit 2: Show the Respondents Working Experience With Banks (n = 30)
Banks Less Than 5Yrs 5-10
Yrs
10-20
Yrs
More Than
20 Yrs
TOTAL
SBI - 3 2 - 5
PNB - 1 4 - 5
PSB - 1 3 1 5
CBOP 5 - - - 5
HDFC 4 1 - - 5
ICICI 4 1 - - 5
Exhibit 2 shows that the employees in nationalized banks under study are working in
their organizations for comparatively longer time span: ranging from 10 -20 years
representing their experience as well as their satisfaction level while working with thebank; whereas, in case of private sector banks, most of the respondents have relativelyworked for less than 5 years.
A Sum m ary o f Em ployees
Perc ept ion about CRM.!!
POOR AVERAGE EXCELLENT
Clear & complete
understanding of
customers needs.
Positive staff
attitude.
Good after- sales
services.
Providing solution
to customers
problems.
Consistent delivery
of superior quality
Unawareness of
CRM concept to
employees in
nationalized
banks.
Considered as
Time & ResourceWastage Tool.
Reduce Profits as
it increases cost
of services.
Not Required
. ust like that!!
Cost factor is
taken into
consideration
without analyzing
the benefits.
Lack of proper
communicationto customers
regarding its
benefits.
Customers are
neither important
nor unim ortant.
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Exhibit 3 shows the view of the respondents about the concept of CRM.
Banks Yes No Total
SBI 4 1 5
PNB 4 1 5
PSB 2 3 5
CBOP 5 - 5HDFC 5 - 5
ICICI 5 - 5
Total 26 4 30
Exhibit 3 represents that all employees of private sector banks are in favor of CRM.However, for Public Sector Banks, few of the employees do not consider it as a value-
adding concept.
Exhibit 4 concentrates on showing the implementation of CRM in banks. (n = 30)
Banks Yes No Total
SBI 4 1 5
PNB 3 2 5
PSB 1 4 5
CBOP 5 0 5
HDFC 5 0 5
ICICI 5 0 5
Total 23 7 30
%age of respondents 76.67 23.33 100
Exhibit 4 presents the actual implementation of CRM Practices in banks. It shows that
employees of private sector banks are completely devoted not only in identifying thecustomers needs; rather they are providing the same to enjoy the benefits there from. So
far as nationalized banks are concerned, even they are moving in the same direction, butthey are not 100% into it.
Exhibit 5 shows various CRM practices adopted by banks to retain their customers
and simultaneously attract the new ones. (n = 23)
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Exhibit 5
Facility of ATMs provided by banks is on top of the list of CRM practices as it results notonly in reducing Tellers time in the office, but it is also convenient to the customers, as
they can withdraw money anytime and anywhere they feel like. Other facilities rated bythe employees in decreasing order of their importance include:
Time to time information sent to the customers regarding new schemes or offers.
Acting as a guide to help solve their problems.
Provision of free of cost monthly or quarterly statements.
Provision of 24 Hour service via Net Banking, Phone Banking, etc.
Facilitating easy installments, thereby extending loan facility
Guidance on Tax Planning.
Constant reminders of matured FDs. Provision of some more facilities like:
- Easy Bill Payments- Investment in securities
- Credit Management
Some employees in the nationalized banks were of the different opinion. They said theydont have ample time to entertain the customers. Since, their schedule is very busy with
limited time, another employee specifically recruited for this purpose must handle allthese activities.
Exhibit 6 shows the reason given by the employees for the implementation of CRM
practices. (n = 23)
Banks
I
ntimation
E
asy
I
nstallments
S
olving
P
roblems
R
eminder
o
fFD's
T
ax
S
aving
2
4Hr
S
ervices
A
TM
A
ctas
C
ounselor
D
oorStep
s
ervices
F
reeofCost
s
tatement
SBI 4 2 3 2 2 2 4 1 2 3
PNB 3 1 3 1 1 2 3 1 3 2
PSB 1 1 1 0 1 0 1 1 1 1
CBOP 5 4 4 3 3 4 5 3 3 4
HDFC 5 5 4 3 4 5 5 3 4 4
ICICI 5 4 5 3 3 5 5 3 4 5
TOTAL 23 17 20 12 14 18 23 12 19 19
% of Resp 100 73.9 86.9 52.1
7
60.86 78.2
6
100 52.1 82.6 82.6
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Banks
Retain
Customers
Brand
Image
Counter
Competition
Increase
Profits
Promote
Products
SBI 4 4 3 3 2
PNB 3 2 3 3 2
PSB 1 1 0 1 1
CBOP 5 3 4 5 4HDFC 5 4 4 5 3
ICICI 5 4 5 5 3
Total 23 18 19 22 15
% of Resp 100 78.26 82.6 95.65 65.21
Exhibit 6
The exhibit depicts that the main motive of implementing CRM Practices in banks isretaining their old customers as well as attracting new ones and thereby reaching their
ultimate goal of increasing the level of profits. This concept is also considered as a
strategy to counter ever increasing fierce competition as well as a tool for improving thecompanys image.
Exhibit 7 visualizes the employees opinion about whether to continue or
discontinue the CRM implementation in banks. (n = 23)
BANKS YES NO
SBI 4 0
PNB 3 0
PSB 1 0
CBOP 5 0
HDFC 5 0ICICI 5 0
TOTAL 23 0
%age of Resp 100 0
Exhibit 7
All the employees who are completely aware of CRM Practices and the benefits derived
through its appropriate implementation are in favor of continuance of the same. This is sobecause; they are quite satisfied with its implementation. The organizations have been
able to increase their customer base due to the provision of extra facilities or add onservices to the customers merely on having an account with them.
Exhibit 8 depicts the views of employees not in favor of CRM implementation
regarding why not to implement CRM practices.(n = 7)
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Banks
Unawareness
Notsopopular
TimeWastage
Useless
NotRequired
Customersnot
im
portant
SBI 1 1 1 1 1 0
PNB 2 1 2 1 2 0
PSB 4 3 4 1 4 0
CBOP 0 0 0 0 0 0
HDFC 0 0 0 0 0 0
ICICI 0 0 0 0 0 0
TOTAL 7 5 7 3 7 0
Exhibit 8
Exhibit 8 represents that all banks whether private or public give due importance to theircustomers. The difference lies only in the provision of extra services or facility via using
Information Technology. Private sector banks are cent percent involved in its provision.Even the public sector banks have started with it and are on its early stages. Some of the
identified reasons for the negligence on the part of public sector banks include:
Unawareness of the concept.
Simply not required (without any reason to justify this statement).
Wastage of time & resources.
Useless concept as the banks is already achieving the targets.
Resistance to change.
Complexity in its operations. Already working efficiently.
Increases costs with comparatively lesser benefits.
Lead to unemployment.
Deviating from the main goal of banks: deposits & loans management.
Serving best to the illiterate (uneducated) population who dont need those (extra)services.
Employees are quite experienced & satisfied by adopting simple & easy to handlemethod of working and hence, do not require any kind of change.
The above-mentioned points are the beliefs of the respondents which may be a myth or
simply resistance to change to what they have been doing long since they were employed.
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In Exhibit 9, we present the employees opinion about implementation of CRM in
future. (n = 7)
Exhibit 9
When the employees were enquired whether they would like to implement CRMpractices in their banks in near future most of them confirmed, except one respondent. He
declared that he is already completing his tasks very efficiently and is achieving the settargets every time. CRM is merely wastage of time, efforts and most importantincreases cost. He further added that, if ever these practices are introduced here, theremust be a separate department; may be a care cell, as in private banks who will be
responsible for the same.
Exhibit 10 presents the satisfaction level of Employees while implementing CRM
practices. (n = 30)
BANKS Satisfied Indifferent Dissatisfied Total
SBI 4 1 0 5
PNB 3 1 1 5
PSB 1 2 2 5CBOP 5 0 0 5
HDFC 5 0 0 5
ICICI 5 0 0 5
Total 23 4 3 30
% of Respts 76.67 13.33 10 100
Exhibit 10
Employees in the private sector banks are satisfied with the CRM practices adopted by
them. It is because they are extracting monetary as well as non monetary gains in theform of goodwill of the bank, which further increases their own worth. In case of
nationalized banks, employees of SBI are also quite satisfied. But, due to vague definitionof CRM in the minds of some respondents, they are dissatisfied or indifferent towards it.
BANKS YES NO
SBI 1 0
PNB 2 0
PSB 3 1
CBOP 0 0
HDFC 0 0
ICICI 0 0
TOTAL 6 1
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Taking cue from Exhibit 10, we wanted to analyze the reasons from dissatisfiedemployees (3 in number). Exhibit 11 explains the reasons for dissatisfaction among
employees while implementing CRM.
Exhibit 11: Reasons for Dissatisfied Employees while implementing CRM (n = 3)
BANKS
Decreasing
Customers
Reduced
Profits
Dissatisfied
Customers
Decreasing
faith
Harm
Image
Increased
Costs
PNB 1 1 0 0 0 1
PSB 1 2 0 1 0 2
Total 2 3 0 1 2 3
When questioned as to what is the reason for their dissatisfaction, they pointed towardsthe increased Costs of the banks if compared to its benefits. They added that if the sameare transferred on the shoulders of the customers, they switch over to other banks; which
further hampers banks business.
In Exhibit 12, we show the feedback system of banks for deploying CRM practices.
(n=23)
Banks
Sales
P
rofit
W
ord
Of
M
outh
A
gencies
C
ustomer
C
areCell
B
ankOffice
SBI 5 4 2 0 2 5
PNB 4 3 1 0 1 4
PSB 4 4 1 0 1 5
CBOP 3 2 4 0 3 3
HDFC 2 2 5 1 4 3
ICICI 3 3 5 1 4 2
Total 21 18 18 2 15 22
%age of Resp
91.3 78.26 78.26 8.69 65.21 95.65
The Exhibit states that banks normally evaluate their performance on the basis of theirsales target achievement, thereby indicating a positive sign of their business.
Furthermore, nationalized banks collect the data within their premises by interacting with
their customers whereas private sector banks derive such results through their customercare cell or through word of mouth publicity. Independent agencies are not hired for this
purpose as stated by one of the respondents.
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Exhibit 13 presents the views of employees about handling the dissatisfied
customers. (n = 30)
Banks Discussion
Providing
Solutions
Expla
ining
Benefits
Custo
mized
Services
Door
Step
Services
Custo
mersas
Assets
SBI 5 5 2 2 4 5
PNB 5 3 1 3 3 4
PSB 4 5 3 2 3 5
CBOP 4 5 2 4 5 5
HDFC 5 5 0 5 5 5
ICICI 5 5 1 4 4 5
TOTAL 28 28 7 20 24 29
%age of Resp 93.3 93.3 23.3 66.7 80 96.7
The employees opine that in order to handle the dissatisfied customers, banks have to
take a lot of steps. The first & the foremost thing is the consideration of customer as anasset for the organization. Discussing the reasons for their dissatisfaction and providing
them solutions for the same can achieve this. Moreover, the level of services must also beincreased.
IV. SUGGESTIONS:
In order to gain full value from their customer relation management technology and
processes, banks should apply segmentation and analytics to their service delivery
strategies. Moreover, they must implement front-end applications that optimize thesestrategies. The target can be achieved only if bank leverages customer knowledge during
every phase of customer interaction by providing pro-active personal service andimplement targeted selling in all of their delivery channels - branches, online banking,
call centers, and ATMs.
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To satisfy your customers following suggestions emerge from the study:
1. Nationalized Banks must educate and train their employees about the CRMPractices already adopted by the private sector banks & benefits derived there
from.
2. CRM solution must involve the participation of each & every employee of thebank; irrespective of his/ her department & designation. It is not the job of single
individual, rather ir requires team effort.3. All employees of the bank must interact with customers so that they can get
first hand feedback (about their level of satisfaction derived on consumption ofbanks products & services).
4. Banks must ensure that every customer interaction is considered as an
opportunity to retain a valued customer, increase revenue, build loyalty orstrengthen a brand.
5. They must look to CRM solutions as helping the employees/ organizations toconnect with customers, anticipate customer needs and deliver them the
products and services to meet their satisfaction level.6. Good customer relations can be maintained with the provision of latest facilities
which matches with the ever changing needs of the customers. Hence, its theneed of the hour to supply what is being demanded.
7. The CRM practices that are implemented in the bank must leverage the banks
existing systems without having to replace whats already working. This helps
in meeting your business needs by providing targeted solutions that enhance the
customer insight, improve retention, increase cross-sell revenue, maximize callcenter effectiveness and boost overall customer profitability.
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8. CRM practices must be viewed as a tool of conitnuous improvement even if thebank is already achieving its targets.
9. Employees should not only hear to the customers problems, but they must try to
provide solutions to their problems at the earliest.10. Provision of door step services must be increased, to maintian & widen the
customer base.11. Banks should employ new technology as the rapid growth of Internet based
techniques have helped in the establishment of one to one relationship with thecustomers online.
12. New products or services must be launched keeping in mind the changing needs
& expectations of the customers.
13. Cost of implementing CRM strategies nust be evaluated by the banks while
taking into account their profitability in the long run & not keen on earning
short run profits.
14. Focus on one mindset change - improving banks service culture is the criticalsuccess factor in developing service industry.
15. Banks must follow 3 step formula to achieve the best results:
16. At all times provoke suggestions from the customers as no one else can betterput in the picture their actual needs & expectations. It is because all three parties -
companies, service staff and customers - have a role to play in improving service.
17. Companies must show leadership and adopt service friendly policies, systemsand processes
18. Emphasize service training for all employees - not just for frontline workers,but also managers and supervisors. Management must walk the talk.
19. This new technology is transforming the skill structure in banking. Hence, inthis fast changing scenario, new competencies required by banks employees
include:
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CHANGING COMPETENCIES
Old Competencies New Competencies
Ability to operate in well defined and
stable environment
Ability to operative in ill-defined and
ever changing environment.
Capacity to deal with repetitivestraight-forward and concrete work
process
Capacity to deal with routine andabstract work process
Ability to operate in a supervised work
environment
Ability to handle decisions and
responsibilities
Isolated work Group work, Interactive work
Ability to operative within narrow
geographical and time horizons
System-wide understanding, ability to
operative within expanding
geographical and time horizons
Broad unspecified knowledge Specialized knowledge
Procedural competencies Customer assistance orientedcompetencies.
Source: Human Resource Management in Banks Contemporary Issues by Dr.
Jacob Mankidy
VI. CONCLUSION:Customers are the lifeblood of the business and that the way to protect and grow its
customer base - and ultimately its profitability - is to build strong customer relationshipsthrough delivery of superior quality service and to meet customer needs better than the
competition. The CRM approach focuses on maximising value for the customer and thebank. The analysis of the study on the use of CRM Practices in Banks reveal:
1. Research has shown that the key drivers of maintaining good relationships with
customers are:
POSITIVE STAFF ATTITUDE SIMPLICITY & EASE OF DOING BUSINESS
HONESTY, INTEGRITY AND RELIABILITY GOOD AFTER-SALES SERVICE
PROACTIVE ADVICE DELIVERY OF PROMISE
CONSISTENT DELIVERY OF SUPERIOR
QUALITY SERVICE
A FAIR AND EFFICIENT COMPLAINTS
RESOLUTION POLICY
2. Although private sector banks are attracting the major chunk of society by its
provision of CRM practices, nationalized banks are also following them.
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3. Most commonly used CRM practices implemented in most of the banks include:
ATM facility, Intimation to customers about new products, solving problems,
24-hour services, etc.
4. Banks employees admitted that CRM Practices helped them in retaining thecustomers, & thereby increasing profitability. Due to attainment of their
motives they prefer to continue with the same practices & also upgrade them.5. Some employees of nationalized banks were unaware of this concept & hence
considered them as merely wastage of time & resources.6. More than of the respondents (77%) were satisfied with the implementation
of these practices, 10% are dissatisfied & 13% are indifferent towards it.7. Dissatisfied employees evaluated the system negatively due to cost
considerations (costs incurred is more than the benefits derived).8. Banks try to satisfy their dissatisfied customers by discussing with them the
reasons for the same & simultaneously providing solutions.
9. Gradually, banks are moving away from the Traditional Approach of Sellers
Market to the Modern Approach of Buyers Market.
10. Due to changing scenario, banks are adopting various strategies to overcome thehurdles of increased level of competition, customer dissatisfaction, constantly
changing customer needs, etc. Some of these incorporate:
Setting the Goals or Purpose
Identification of Customer Groups
Defining their needs
Differentiation of CRM practices
Technology has been a major driving factor for CRM and therefore, is bringing radicalchanges. The need of the hour is uninterrupted dialogue with customer about product
selection, product use, product enhancement and product replacement. The developments
in several technological areas are likely to have a major impact on CRM. Some of theareas are: e- CRM, Digital signatures, Biometric sensing & M- commerce. So the needhere is to adopt these technologies as early as possible so to become the movers in the
business. This encompasses not only in developing long term relationships with thecustomers but also increases profitability over a lifetime on the one hand and increased
shareholders wealth on the other hand.
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