role of crm in customer satisfaction

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A

STUDY OF

Customer Relationship Management in HDFC bank

Handawara,J&K.

A Summer Training Report

Submitted in partial fulfillment of the requirement for the

Award of the degree of

MASTER OF BUSINESS ADMINISTRATION

FROM

UTTARAKHAND TECHNICAL UNIVERSITY,

DEHRADUN

Submitted By Submitted To

Ramez-ul-shafi Mir Mr.Vikas Uniyal

MBA (FINANCE)

ASST.PROFESSOR

GRD IMT,DEHRADUN


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GRD INSTITUTE OF MANAGEMENT &TECHNOLOGY

RAJPUR ROAD, DEHRADUN

Acknowledgement

I express my sincere gratitude to HDFC Bank Ltd., especially to Mr. SUHAIL AHMAD

DEPUTY MANAGERRetail Sales (HDFC Bank,HANDWARW) my project guide forhis able guidance, continuous support and cooperation throughout my project, without

whom the present work would not have been possible. I would also like to thank our team

leader for providing me with the opportunity to know customers perceptions towards bank

and providing me an opportunity to work on the project Role of RCM in Customer

Satisfaction. I would like to thank the entire team of HDFC Bank.

Also, I am very thankful to all my faculty members for their help and dedication

especially Mr. VIKAS UNIYAL.Training Coordinator for his continuous guidance and

invaluable encouragement and for providing me a platform to perform better by developing

a deeper understanding of the theoretical concepts and helping me in achieving the desired

level of output.


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INTERNAL GUIDE CERTIFICATE

I have the pleasure in certifying that Mr. Ramez-Ul-Shafi Mir is a bonafied student of 3 rd

semester of the master degree in Business Administration of GRD IMT, Dehradun.

Under University Roll no:

He/She had completed her project work entitled customer relationship management in

HDFC bank under my guidance.

I certify that this is his/her original effort and has not been copied from any other source.

This project has not been submitted in any other university for the purpose of award of

degree.

This project fulfills the requirement of the curriculum prescribed by U.T.U, Dehradun. I

recommend this project for evaluation and consideration from the award of degree to the

student.

Sig:

Mr. Vikash

Uniyal


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DECLARATION

I here by declare that project report entitled CUSTOMER

RELATIONSHIP MANAGEMENT Written and submitted by me under

the guidance of Mr. VIKAS UNIYAL, GRD IMT, Dehradun, is my

original work.

The empirical findings are based on data collected by myself. While preparing

the report I have not copied from any source or other projects submitted for

similar purpose.


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Date: RAMEEZ MEER

Place: HANDWARA KUPWARA MBA III rd Sem

(2011-13)

GRD IMT

Dehradun

PREFACE

Experience is the best teacher. This saying is very well

applicable in everyones life. Therefore as a student of

management it must apply to me also. Then the question arises

that from where we can get this experience. Obviously we must

Undergo practical Training. To serve this purpose I had

undergone one and a half months summer training at HDFC BANK

LTD. and as an outcome I have prepared this project report

CUSTOMER SATISFACTION OF HDFC BANK.(CASE STUDY OF

HANDWARA BRANCH)


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In todays corporate and competitive world, I find that HDFC Bank

LTD. has the good growth and potential as compared to the other

bank. HDFC Bank LTD. has given me the opportunity to work and

get experience in a highly competitive and enhancing sector.

Contents

S.NO. TITLE PAGE NO

1. EXECUTIVE SUMMARY/ABSTRACT 05-06

2. INDUSTRY PROFILE AND COMPANY PROFILE 07-47

3. INDUSTRY PROFILE 08-14

4. HDFC BANK INDIA 15-21

5. PRODUCT DETAILS 22-24

6. CUSTOMER PROFILING AND SEGMENTATION 25-35

7. PREFERRED BANKING IN HDFC BANK 36-42


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8. CLASSICAL BANKING IN HDFC BANK 42-47

9. BOARD OF DIRECTORS 48

10. RESEARCH METHODOLOGY 49-53

11. CRM BUILDING SUCCESSFUL RELATIONSHIPS 54-58

12. CUSTOMER SATISFACTION 59-67

13. FINDINGS AND ANALYSIS 68-86

14. APPENDIX 87-96

15. CONCLUSION AND RECOMMENDATIONS 97-100

16. BIBLIOGRAPHY 101

Executive Summary

Customer Relationship Management (CRM) is fundamental to building a customer centric

organization. CRM is a key element of differentiation that allows a bank to develop its

customer base and sales capacity. The goal of CRM is to manage all aspects of customer

interactions in a manner that enables banks to maximize profitability to every customer.

Increasing competition, deregulation and the internet have all contributed to the increase in

to entry and exit for the customer, making it easier to switch banks or brokers without

feeling the pinch in the wallet. Retaining customers is a major concern for banking

institutions which underscores the importance of CRM. Customers, faced with an

increasing a array of banking products and services, are expecting more from banks in


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terms of customized offerings, attractive returns ease of access and transparency in

dealings. By using knowledge of the customer, banking can turn customer relationship into

a key competitive advantage. Banks can develop customer relationships across abroad

spectrum of touch points branches, kiosks ATMs Internet, electronic banking, smart cards,

call centers and phone banking the full integration of these systems, their associated

processes, and the methods for which information is extracted and used, forms the basis for

CRM.

The new millennium seeks to usher in the concept of "Universal Banking"as banks and

financial institution try to consolidate their place in the financial sectors and provide a one

step financial services super market to their customers. Technical banking is considered as

the mantra in today's banking scenario.

Customer is considered to be a king .The customer of the present day

dictates the terms and conditions through which his needs are to be fulfilled. Banking

industry, which is one of the measure financial service providers in the economy, draws the

attention of many with regard to the customer services.

In this context a study has been conducted with the HDFC bank to know the

role of CRM in customer satisfaction. This report gives a brief about the history and

functioning of HDFC bank and the relationship with its customers. It also attempts to

analyze the behavior and perception of customers about the facilities provided by the bank.

While dealing with customers of the bank I saw that different customers had different

perceptions towards the bank and towards different services and facilities provided by the

bank.

The main purpose of this project work is to analyze the customer relationship management

services provided by the HDFC Bank and to check the level of satisfaction, towards this

service, among the customers. Customer Relationship Management has become a

challenging issue for every institution as every organization is trying to provide services

superior to the competition, focus has shifted to retaining and enhancing the customers

rather that acquiring them; and to create loyalty among customers, CRM services have to be

exceptional.


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OBJECTIVES OF THE STUDY

Assessment of Consumer Satisfaction towards Banking Sector with special reference to

HDFC Bank. This was done by interacting with people through the medium of


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Questionnaires and Direct interviews being taken in some cases. The satisfaction greatly

depends on the quality of service, the interests being provided on various banking facilities

and the payback period for taking any sort of loan. One of the important factors affecting

customer satisfaction is the presence of on-line banking facility being incorporated by the

bank in its very basic functioning infrastructure.

The project helped in developing an insight about the Actual level of satisfaction and the

Expected level of satisfaction. The various grievances that came forwarded during the

survey and the various things which the customers wanted the bank to incorporate in its

structure is attached in the report afterwards in the form of Recommendations. Through the

project, the competitive strategies being followed by other banks were also analyzed.

INDUSTRY PROFILE

Indian Banking


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The Indian banking can be broadly categorized into nationalized (government owned),

private banks and specialized banking institutional reserve bank of India acts a centralized

body monitoring any discrepancies and short coming in the system. Since the

nationalization of banks in 1969, the public sector banks or the nationalized banks have

acquired a place of prominence and has since seen tremendous progress. The need to

become highly customer focused has forced the slow-moving public sector banks to adopt a

fast track approach. The unleashing of the products and services through the net has

galvanized players at all levels of the banking and financial institutions market grid to look

a new at their existing portfolio offering conservative banking practices allowed Indian

banks to be insulated partially from the Asian currency crises. Indian banks are now quoting

a higher valuation when compared to banks in other Asian countries (viz. Hong Kong,

Singapore, Philippines etc.) that have major problems linked to huge nonperforming assets

(NPAs) and payment defaults. Comparative banks are nimble footed in approach an armed

with efficient branch networks focus primarily on the high revenue niche relate segments.

The Indian banking has finally worked up to the competitive dynamics of the new

Indian market and is addressing the relevant issues to take on the multifarious challenges of

globalization. Banks that employ IT solutions are received to be futuristic and proactive

players capable of meeting the multifarious requirements of the large customer base. Private

Banks have been fast on the uptake and are reorienting their strategies using the Internet as

a medium. The Internet has emerged as the new an challenges frontier of marketing with

conventional physical world talent being just as applicable like in any other marketing

medium.

The Indian banking has come from a long way from being sleepy business institution

to a highly proactive and dynamic entity. This transformation has been largely brought

about by the large dose of liberalization and economic reforms that allowed banks to

explore new business opportunities rather than generating revenues from conventional

streams (i.e. borrowing and lending). The banking in India is highly fragmented wit 30%

banking units contributing to almost 50% of deposits and 60% of advances. Indian

Nationalized banks(banks owned by government) continue to the major lenders in the

economy due to their size and penetrative network which assures them high deposits

mobilization. The Indian banking can be broadly categorized into nationalized, private and

specialized banking institutions.

The Reserve Bank of India acts as centralized body monitoring any discrepancies

and shortcoming in the system. It is the foremost monitoring body in the Indian financial

sector. The nationalized banks (i.e. govt. owned banks) continue to dominate the Indian

banking arena. Industry estimates indicate that out of 274 commercial banks operating in

India, 223 banks are in public sector and 51 are in private sector.


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Currently (2007), banking in India is generally fairly mature in terms of supply,

products range and reach-even though reach in rural India still remains a challenge for the

private sector and foreign banks in terms of quality of assets and capital adequacy, Indian

banks are considered to have clean, strong and transparent balance sheets relative to other

banks in the comparable economies in its region. The Reserve bank of India is an

autonomous body, with minimal pressure form the government. The stated policy of the

bank on the Indian rupee is to manage volatility but without any fixed exchange rate and

this has mostly been true.

In March, 2006. The Reserve Bank of India allowed Warburg pincus to increase its

stake in Kotak Mahindra (a private bank) to 10%. This is the first time an investor has been

allowed to hold more than 5% in a private sector bank since the RBI announced norms in

2005 that they mat stake exceeding in the private sector banks would need to be vetted by

them.

Currently, India has 88 schedules commercial banks (SCBs) -28 public sector banks(that is with the govt. of India holding a stake), 29 private banks (these do not have govt.

stakes), they may be publicly listed and traded on stock exchange and 31 foreign banks,

they have a combined network of over 53,000 branches and 17,000 ATMs.

Phase I

The general bank of India was set up in the year 1786. Next came bank of Hindustan and

Bengal bank. The East India Company established bank of Bengal (1809). Bank of Bombay

(1840) and bank of Madras (1843) as independent units and called it presidency banks.

These three banks were amalgamated in 1920 and imperial bank of India was established

which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab

National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and

1913, Bank of India, Central Bank of India, Bank of Baroda, Canara bank, Indian Bank and

Bank of Mysore were set up. Reserve bank of India came in 1935.

During the first phase the growth was very slow and the banks also experienced periodic

failures between 1913 and 1948. There were approximately 1100 banks, mostly small. Tostreamline the functioning and activities of commercial banks the government of India came

up with the Banking Companies Act, 1949 which of was 1965(Act no. 23 of 1965). Reserve

Bank of India was vested with extensive powers for the supervision of banking in India as

the central banking authority.


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During those days public had lesser confidence in the banks. As an aftermath deposit

mobilization been slow. Abreast of it the saving bank facility provided by the postal

department was comparatively safer. Moreover, funds were largely given to traders.

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy.

The Banking system of India should not only be hassle free but it should be able to meet

new challenges posed by the technology and any other external and internal factors.

For the three decades Indias Banking system has several outstanding achievements to its

credit. The most striking is its extensive reach. It is no longer confined to only

metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to

the remote corners of the country. This is one of the main reasons of Indians growth

process.

Not long ago, an account holder had to wait for hours at the bank counters for getting the

draft or for withdrawing his own money. Today, he has a choice. Gone are the days when

the most effective bank transferred money from one branch to another in two days. Now it

is simple as instant messaging or dial a pizza. Money has become the order of the day.

The Bank of India, though conservative, was established in 1786. From 1786 till today, the

journey of Indian banking system can be segregated into three distinct phases, they are

mentioned below:

Early phase from 1786 to1969 of Indian Banks

Nationalization of Indian banks and unto 1991 prior to Indian banking sector reforms.

New phase of banking system with the advent of Indian financial and banking sector

reforms after 1991.

PHASE II

Government took major steps in this Indian banking sector reforms after independence. In1955, it nationalizes imperial bank of India with the extensive banking facilities on a large

scale especially in rural and semi-urban areas. It formed state bank of India to act as a

principal agent of RBI and to handle banking transactions of the union and state

government all over the country.


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Seven banks forming subsidiary of state bank of India was nationalized in 1960.On 19 th

July, 1969, major process of nationalization was carried out it was an effort of the then

prime minister of India , Mrs. Indra Gandhi, 14 major commercial banks were nationalized.

Second phase of nationalization Indian banking sector reforms was carried out in 1980 with

seven more banks. This step brought 80% of the banking segment in India undergovernment ownership.

The following are the steps taken by the government of India to regulate banking

institutions in the country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the banks of the public sector bank of India rose to

approximately 800% in deposits and advances took a huge jump by 11,000%.


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NATIONALIZATION OF BANK IN INDIA

The nationalization of bank in India took place in 1969 by Mrs. Indra Gandhi, the Prime

Minister. It nationalized 14 banks then. These banks were mostly owned by businessmenand even managed by them.

Central Bank of India Bank of Maharashtra

Dena Bank Syndicate Bank

Canara Bank Indian Bank

Bank of Baroda Union Bank

Allahabad Bank United Bank of India

Uco Bank Bank of India

Before the steps of nationalization of Indian Bank, only State of India (SBI) was

nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of seven

state bank of India (formed subsidiary) took place on 19th July, 1960.

The State Bank is Indias largest commercial bank and is ranked one of the top five banks

worldwide. It serves 90 million customers through network of 9,000 branches and it

offers---either directly or through subsidiaries---a wide range of banking services.

The second phase of nationalization of India bank took place in the year 1980. Seven more

banks were nationalized with deposits over 200 crores till this year.


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CURRENT SCENARIO

The industry in India banking is in a transition phase. The public sector banks (PSBs),

which are the foundation of the Indian Banking System account for more than 75% of total

banking industry assets. Unfortunately they are burdened with excessive non-performing

assets (NPSs), massive man power and lack of modern technology.

On the other hand the private sector banks in India are witnessing immense progress. They

are leaders in internet banking, mobile banking, phone banking, ATMs. On the other hand

public sector banks are still facing the problem of unhappy employees. There has been a

decrease of 20% in the employee strength of the private sector in the wake of the Voluntary

Retirement Schemes (VRS). As far as foreign banks are concerned they are likely to

succeed in India.

PUBLIC SECTOR BANK

Among the public sector banks in India, United Bank of India is one of predecessor, in the

public sector banks, the United Bank of India Ltd., was formed in 1950 with the

amalgamation of four banks viz. Comilla Banking Corporation Ltd.(1914), Bengal central

bank ltd. (1918) , Comilla union bank ltd.(1922) and Hooghly bank ltd. (1932). Oriental

Bank of Commerce (OBC), a government of India undertaking offers domestic, NRI andcommercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun

District (UP) and Hanumanangarh district (Rajasthan) disbursing small loans. This public

sector bank India has implemented 14 point action plan for strengthening of credit delivery

to women and has designated 5 branches as specialized branches for women entrepreneurs.

The following are the list of public sector banks in India

Allahabad bank Andhra bank

Bank of Baroda Bank of India

Bank of Maharashtra Bank of India

Canara Bank Central Bank of India

Corporation Bank Dena bank


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years of patronage and constantly setting new standards in banking, ING Vysya Bank has

many credits to its account.

List of private banks in India

Bank of Punjab Development Credit Bank

Bank of Rajasthan Catholic Syrian Bank

City Union Bank Dhanalakshmi Bank

Federal Bank HDF Bank

ICICI Bank IDBI Bank

IndusInd Bank Jammu and Kashmir Bank

Karnataka Bank Laxmi Vilas Bank

South Indian Bank United Western Bank

UTI Bank ING Vysya Bank

HDFC BANK INDIA

HDFC Bank India, announced the arrival of the new generation, technology driven

commercial banks in India. HDFC Bank in India was set up in August 1994 with the

approval of Reserve Bank of India (RBI). The bank was promoted by Housing

Development Finance Corporation Ltd. (HDFC), a premier housing finance company of

India (set up in 1977).

HDFC Bank was amongst the first to receive an in-principle approval from the RBI to set

up a bank in the private sector from HDFC, in 1994 during the period of liberalization of

the banking sector in India. HDFC India was incorporated in August, 1994 in the name of

HDFC Bank Ltd. HDFC India commenced operations as a scheduled commercial bank in

January, 1995.

Our Business philosophy is based on four core values: customer focus, operationalexcellence, product leadership and people, we believe that the ultimate identity and success

of our bank will reside in the exceptional quality of our people and their extraordinary

efforts. For this reason, we are committed to hiring, developing, motivating and retaining

the best people in the industry.


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Kolkata, Chennai, Delhi, Bangalore, Hyderabad and Ahmadabad apart from HDFC

Mumbai.

HDFC BANK- BANKING ON GROWTH

HDFC Bank Ltd. (NYSE:HDB)

The average growth rate of the Indian economy over a period of 25 years since 1980-81

financial year beginning April has been about 6.0% p.a., with the growth rate averaging

9.1% p.a., during the last years.

The strengthening of economic activity in the recent years has been supported by a

persistent increase in the domestic investment rate from 22.9% of GDP in 2001-02 to

33.8%in 2005-06 coupled with more efficient use of capital. Domestic saving rate improved

from 23.5% to 32.4% of GDP during the same period. The service sector continues to be

the driver of growth with a share of around 60% in the overall GDP and contributing almost

three-fourth to overall growth. The manufacturing sector has shown good growth supported


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HDFC Bank is a private sector bank and financial services company in India. The bank

operations are broadly classified as wholesale banking services, Retail Banking Services

and Treasury Operations. In the wholesale banking segment it offers commercial and

transactional banking services, including working capital finances, trade services,

transactional services, cash management, etc. In the Retail banking segment it offers

individual customers, financial products and banking services such as ATMs, Phone

banking, Net banking and Mobile banking. In the treasury operations it deals with Foreign

Exchange and Derivatives, Local Currency Money Market and Debt Securities, and

Equities. It has 684 branches in 316 cities.

Shareholding Pattern


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The financial performing of the bank during the fiscal year 2996-07 was good as total

revenues increasing by 42.4% to Rs. 5225.8 crores from Rs. 3669.8 crores in 2005-06. The

revenue growth was driven principally by an increase in net interest income. Interest

income grew by 45.7% due to an increase in the average balance sheet size by 36.6% and an

increase in net interest margin from 4.0% to 4.3%. The increase in net interest margin was

due to better mix of deposits with a higher proportion of current accounts and an increase in

lending rates was partially offset by higher costs of deposits and costs of borrowings. The

bank increased its Benchmark Prime Lending Rate (BPLR) thrice during the year as a resultof increase in interest rates in the banking system due to tight liquidity conditions.

The other income increased by 34.9% to Rs. 1516.2 crores due to fees and commissions and

income from foreign exchange and derivatives. In 2006-07, commission income increased

by 23.7% to Rs. 1292.4 crores with the main drivers being commission from distribution of

third party mutual funds and insurance, fees on debit/credit cards and transactional

charges/fees. The bank incurred net losses on sale/revaluation of investments of Rs. 68.4

crores as a result of the sharp increase in short term yields in the debt markets in March

2007. Large portions of the non-SLR investments were bonds in which the bank had

invested in previous years for meeting priority sector lending requirements. Foreignexchange and derivatives revenues grew from Rs. 118.6 crores to Rs. 280.3 crores.

Operating expenses increased from Rs. 1691.1 crores in 2005-06 to Rs. 2420.8 crores

in 2006-07, due to significant expansion in new branch infrastructure, retail loan products

and the credit card business. The ratio of operating cost to net revenues remained more or


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Fund Exposure

Transportation 10.74%

Banks and financial institution 5.51%

Trade 4.52%

Automobiles and Auto Ancillaries 4.47%

Financing Intermediates 2.88%

Food Processing 2.33%

Engineering 2.14%

Fertilizers and Pesticides 2.11%

Retail 44.10%

Other Industries 21.20%

HDFC BANK

Mission and business strategy

Our mission id to be A world class Indian Bank, benchmarking ourselves against

international standards and best practices in terms of products offerings, technology, service

levels, risk management and audit and compliance. The objective is to build sound

customer franchises across distinct businesses so as to be a preferred provider of banking

services for target retail and wholesale customer segments, and to achieve a healthy growthin profitability, consistent with the banks risk appetite. We are committed to do this while

ensuring the highest levels of ethical standards, professional integrity, corporate governance

and regulatory compliance.


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Business strategy emphasizes the following

Increase our market share in Indias expanding banking and financial services

industry by following a disciplined growth strategy focusing on balancing qualityand volume growth while delivering high quality customer services;

Leverage our technology platform and open scalable systems to deliver more

products to more customers and to control operating costs;

Develop innovative products and services that attract our targeted customers and

address inefficiencies in the Indian financial sector;

Maintain high standards for asset quality through disciplined credit risk

management;

Continue to develop products and services that reduce our cost of funds;

Focus on healthy earnings growth with low volatility.

PRODUCT DETAILS

Accounts and Deposits:


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Savings Accounts-

- Regular saving account - Saving plus account

- Saving max account - Senior citizen account

- No frills account - Retail trust account

- Pension saving bank account - Kids advantage account

- Salary account - Family savings group.

- Payroll -Classic

- Regular - Defense salary account

- Premium

Current Accounts-

- Plus current account - Trade current account

- Premium current account - Regular current account

- Reimbursement current account - RFC-Domestic account

Fixed deposits-

- Regular fixed deposits

- Super saver account

- Sweep-in account.

Demat Account

Safe Deposit Lockers

Loans:

- Personal loans - Home loans

- New car loans - Used car loans

- Express loans - Gold loans

- Educational loans - Loan against securities


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- Loan against property - Tractor loans

- Construction equipment finance - Commercial vehicle finance

- Vehicle working capital finance - Loans against rental receivables

Cards:

Credit cards-

- Silver credit card - Gold credit card

- Womans gold credit card - Platinum plus credit card

- Corporate credit card - Business credit card

- Titanium credit card - Value plus credit card

- Health plus credit card - Visa signature credit card

Debit Cards-

- Easy shop International Debit Card

- Easy shop Gold Debit Card

- Easy shop International Business Debit Card

- Easy shop Womans Advantage Debit Card

- Easy shop NRO Debit Card

Prepaid Cards-

- Forex Plus Card

- Gift Plus Card

- Food Plus Card.


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Investment and Insurance:

- Mutual Funds - Insurance

- General & Health Insurance - Bonds

- Knowledge Centre - Equities & Derivatives

- Mudra Gold Bar

Forex Services:

- Trade Finance - Travelers cheque

- Foreign currency remittance - Foreign currency draft

- Foreign currency cheque deposits - Cash to master

Payment Services

- Net safe - Merchant services

- Prepaid refill - Bill pay

- Instapay - Direct pay

- Visa Money Transfer - Excise & Service Tax Payment

- E-monies Electronic Fund Transfer

- On-line Payment of direct tax

Access Your Bank:

- Net Banking - ATM

- One View - Phone Banking

- Insta Alerts - E-mail Statements

- Mobile Banking - Branch Network


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CUSTOMER PROFILING

Solving almost any sale and marketing challenge starts with knowing who your customer is.

Mapping Analytics can help you to find out who your best customers are and apply

geographic consumer customer profiles analysis techniques to discover where to find more

of them. Profiling is the art of detailing the customer to get a comprehensive view of his

financial, lifestyle, demographics. Profiling is the fundamental base for Relationship

Management.

Accurate profiling and segmentation of the customer is central to a banks profitability and

operational efficiency. Such profiling helps banks define increasingly financer customersegments for greater profitability.

Consumer Customer Profile

Demographics age, income, gender, ethnicity, education level etc.

Geo Demographic Clusters there are many clustering database available, and we will

help you choose the right one for your specific profiling needs. Some are industry specific,

other are general. They often include data on interests, lifestyles, purchasing behavior,

attitude and more.

Survey Data based on data available for purchase or gathering through primary research.

Businesses

SIC or NAICs standard industry classification (SIC) and North America Industry (NAIC)

codes are added to your customer data to determine type of business.

Firmographics this invented word is used by marketers to refer to a companys

characteristics, including number of employees, revenue, growth rate and even special data

such as the number of computers or spending on telecommunications.

Customers Profiling Benefits


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Once organization performs customer segmentation, they can understand who their

customers are from a demographic perspective. And they are on their way to achieving

many key benefits for their organization.

Understand Untapped Market Potential

An accurate profile of your customer allows you to analyze market areas or neighborhoods

to understand your penetration rate and market potential for your products and services.

Penetration rate and points to where market opportunity exists.

Improve Targeted Marketing

By identifying and understanding the customers in the clusters where you have the highest

penetration, you can target marketing or business activities to those who are most likely to

purchase your product. You can improve response rate and ROI by precisely marketing to

prospects with offer that will appeal specifically to them.

Choose Better Sites

Customer profiling is a key analysis necessary to project the size of the total market

opportunity, and project revenue and customer for new or planned locations. Few

companies can make successful site selection decisions without first understanding

customer profile.

Segmentation

Customer segmentation is the subdivision of market into discrete customer groups that

share similar characteristics. Customer segmentation can be a powerful means to identify

unmet customer needs. Companies that identify undeserved segments can then outperform

the competition by developing uniquely appealing products and services. Customer

segmentation is most effective when a company tailors offering to segments that are the

most profitable and serves them with distinct competitive advantages. This prioritizationcan help companies develop marketing campaigns and pricing strategies to extract

maximum value from both high and low-profit customers. A company can use

customers segmentation as the principal basic for allocating resources development,

marketing, service and delivery programs customer segmentation requires managers to:


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At the heart of any program for customer relationship management is the effective

segmentation and profiling of customers. Such profiling helps banks define increasingly

finer customer segments for greater profitability. Segmentation occupies a key position in

an institutions customer-centric strategies and sits at the hub of the customer value chain

(see fig.1). It facilitates the intelligent deployment of data that banks need to offer, market,

and sell their products.

Segmentation can also help a bank increase customer satisfaction and loyalty. Through

accurate segmentation, banks can both reduce their costs and take the advantage of

opportunities for generating extra revenue. Customer segmentation and profiling typically

involve such attributes as geographic location, number of products owned, type of product

used, age, or total bank amount. Segmentation seldom reflects the real profitability of each

customer, however, because customer data is often spread among a Varity of legacy system,

it can be hard for the bank to create a single view of their customers and extract the

information they need for accurate profitability analysis.

Customer THE Right offering for transaction

Centricity as HEAR the right from a

Corporate philosophy OF person targeted to 360 view

CRM a relation

Customer marketing ship culture.

Valuing Aggregat- customer product targeted valuing


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the Ion of segment- and marketing the

Customer Customer ation service custom

Data offered er

THE CUSTOMER VALUE CHAIN (Fig.1)

A Wide Range of Business Benefits

An accurate analysis of your current prospective customers offers many business benefits.

These include:

The ability to identify customers that have the most assets and would be the most profitable.

Identification of the most profitable products.

Enhanced cross selling and up selling of products that are most relevant o a customers life

stage and financial needs.

Improved customer service and reduced service cost.

Enhanced operational efficiency.

Customer Segmentation Strategy

A meaningful segment is a group of customers that meets three criteria:

They are identifiable by common characteristics

They are profitable

They are growing.


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MANAGED CUSTOMERS

Managed customers are the main concern of our project work. The whole analysis of our

project work revolves round the manager customer group.

10% of the retail bakings base contributes to over 60% of the customer profitability

and 56% of the liability book.

These customers therefore need to be actively managed and retained.

Loyalty Marketing commonly referred to as frequency marketing or relationship marketing,

is a long-term strategy focused on the identification, retention and growth of our best

No. of customers CPR CA AMB SA

REST

MANAGE

D


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customers by communicating to them and recognizing and rewarding them based on their

purchase.

It is a universally recognized marketing strategy being employed by more and more

businesses today than ever before. Whether organizations are trying to retain their

customers, motivate them to increase their purchase activity, or trying to establish loyalrelationship, the basic principles of loyalty marketing can help. And now, with the

introduction of preferred patron, even the smallest businesses can employ this very same

strategy without the concerns or overhead involved with those expensive, and often

unattainable, point-of-sale systems and third party marketing firms. In fact, preferred patron

was designed for small businesses in any segment of the retail industry..keeping low cost,

intuitiveness and simplicity of use as the primary objective while still providing marketing

essentials which rival any product or service on the market today.

Even in the age of increasing customer expectations and intense global competitions, the

drivers of customer loyalty remain unchanged. Some customers are still more valuable thanothers. Consumers still have two distinct drivers that influence their behavior: the rational

level, at which they compare offers and seek the greatest value; and the emotional level, at

which they are influenced by prior experience and seek to reflect their own lifestyles in their

purchase.

Empowered consumers can be longer being treated as the passive targets of one-way

marketing stimulus-response initiatives. A successful marketing initiative will result

in mutual benefits between the organization and the customer, and that is the reason

why an effective loyalty program such as preferred patron is so crucial: loyalty

campaign provide differentiated, brand-specific value, and offer a compellingcounterpoint to price-only marketing.

A fundamental prerequisite of a loyalty program is the ability to capture in

individuals transactional data and filter that data through a rule engine that assigns

both points and interventions, with storage, reporting, and retrieval of all member

and program information from a centralized database. Without sophisticated

technology as found in preferred patron, organization are otherwise confined to a

punch card or a stamp program which simply wont work in todays internet bound

world.

Why race a customer?

Dedicated one point contact in the


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Retention and increase in CPR

What are the benefits?

Today more than ever, organizations have likely recognized the value of their existing

customer base, and among that base organization have come to understand that certain

customers are more profitable than others. Preferred patron provides organizations the tool

necessary to know who their best customers are. Once organizations can formulate service

and/or product enhancement strategies to yield greater profitability.

With the preferred patron the idea is to leverage past behaviors to ascertain the degrees of

profitability organizations customers represent in the future. Then organization can focus

Dee ens relationshi s

CPR per

Customer

Preferred

32.3k

Classic-

6k

Acquire

family

Pitch program

Benefits

Cross sell

Pitch program

Benefits

Why

Race

a

custo

mer


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their limited, and hence valuable, marketing resources on those customers with the higher

potential for future profitability.

Preferred patron provides a proliferation of benefits enabling organizations to effectively

identify the market to their bets customers. In essence, preferred patron is the vehicle to

establishing a well designed and executed loyalty program, which can:

Provide a solid understanding of what organizations patrons desire,

Influence and direct the behavior or organizations patrons,

Establish organizations business with competitive advantage,

Allow organizations to focus their limited, and hence valuable marketing resources

on those patrons with the greatest potential for return,

Provide organization with visibility to their patrons spending behaviors and

Yield long-term customer relationships leading to more significant profits.

Moreover 20% preferred customers account for 80% of profitability to an

organization. It is in accordance with the pareto law (the law of the vital few and

the trivial many). The pareto law, in the generalized form, stated that 80% of the

objectives- or more general the effects- are achieved with 20% of the means- or

more generally the causes or the agents. Subsequently, it takes 80% of the means to

achieve the remaining 20% of the objectives.

PERFERRED BANKING IN HDFC BANK

Preferred banking is the benchmark in relationship banking, offering an enhance level of

service to the most demanding high net worth customers for their wealth management and

business requirements. Philosophy of banking is to maximize financial opportunities for

high net worth customers and to transform their routine banking into a memorable and

profitable experience.


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Preferred banking practices the philosophy of identifying, inspiring and maximizing

financial opportunities for clients through a seamless banking and wealth management

experience delivered through the team of dedicated relationship managers, product

specialists and service managers. Preferred banking clients enjoy preferential treatment with

waivers and better pricing on selected products and services.

Dedicated relationship manager with a vast, multi-faceted experience in financial services,

work with a team of certified and experienced product specialists from domains like

investments, insurance, banking, trade and foreign exchange, loan and direct equity to

provide customized solutions for you. In, addition a team of dedicated service managers

ensure all your transactions and service requirements are catered to the flawlessly.

Preferred banking is the finest standard in relationship banking for the most demanding

businesses and high net worth individuals. It offers an enhance level of services and

products for wealth management and business banking requirements.

Personalized Attention

There is a dedicated personal relationship manager who is just a phone call away. These

experience and professionally trained individuals will cater to all banking and financial

services need. So, whether it is expert advice on mutual funds or the urgency or having a

demand draft issued, just ask and trust the relationship manager to get the job done

promptly and efficiently.

Comprehensive Wealth Management

It is believed that the time is true wealth.

They have designed convenient end-to-end wealth management solution that range from tax

saving investment avenues, buying and selling shares to convenient tax payment options, all

under the same roof!


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In any relation small gestures can speak volumes. This is one such service, one small

gesture that is sure to make customers feel special.

HDFC Securities Trading Account

There is e-booking through HDFC Securities trading account.

There is special pricing for this account, offered exclusively to preferred customers.

Credit Card

Titanium card-quiet simply the most exclusive Credit Card one could ask for. The benefitsof this card are exclusively free for preferred customers.

HDFC Bank international Gold Credit Card-free for preferred customers. Along with this

customer are also entitled to the value added My City Benefits card (available in selected

cities) that comes absolutely free.

Loan at Preferential Rates

HDFC Bank preferred customers are entitled to enjoy reduced pricing on selected loan

products.

EXCLUSIVE PRIVILEGES

Zero Balance Accounts


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As a part of preferred programme, customers need not maintain the minimum average

quarterly balance stipulated on their saving and current accounts.

Combined Monthly Statements

Preferred customers receive consolidated monthly statements detailing all transactions madeon customers saving, current, fixed deposit accounts, where customers are first holders.

Free Payable At Par Cheque Book

Customers can request for a free payable at par cheque book on their saving or current

account. These cheques can be honored at any HDFC Bank branch across the country,

doing away with the need of Demand Draft in more than 200 cities.

Enhanced limits on Preferred Easy Shop Debit Card

Our preferred customers can avail the convenience of the HDFC Bank Easy ShopInternational Gold Debit Card for free. The card offers features like petrol surcharge waiver

and cash back and whats more only the HDFC Bank Debit Card comes with zero card

liability! Customers benefits from a higher spending limit of Rs. 50,000/- a day.

As well as enhanced cash withdrawal limit of Rs. 25,000/- a day at ATMs, on this value

added Debit Card.

50% discount on Locker Charges

Preferential Forex Rates

Customers can earn the benefits of an improvement of 8 paisa over a days card rate,

helping customers save money when they are buying currency or earn money when they are

selling currency.

Free Standing Instruction

Customers can set up a convenient standing instruction on their accounts is free and

payment is triggered automatically.

Cheque Pick-up Facility

HDFC Bank arranges to pick up cheque and other instructions, excluding cash, from

customers house.

Free Transaction On Non-HDFC Bank ATMs


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No cheque are levied for balance enquiry and cash withdrawal transactions if customers

transact on non-HDFC Bank ATMs (visa/Master card/Euro net/State Bank of India/Andhra

Bank/Jammu and Kashmir Bank/Punjab National Bank)across India.

TYPES OF MANAGED CUSTOMERS IN HDFC BANK

Imperia Premium Banking in HDFC Bank:

BENEFITS:

Personalized attention

Imperia client relationship manager

Client relationship manager effectively takes care of the financial needs of customers

whether it is expert investment advice, or having a demand draft issue.

Investment advisory services

Invest wise

HDFC Bank Investment Advisory Services not only protect customers wealth, but also

advice them on how to make it grow. Range of services included:

1. Client profiling

2. Portfolio structuring and ongoing portfolio reviews.

3. Financial planning and asset allocation.

4. Research reports.

Private banking services

This programme takes the customer to the realm of customized and comprehensive

investment and advice across diverse asset categories, helping customer make the choice


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Sweep-in facility on your saving accounts.

Waiver on a host of service charges.

Anytime, anywhere banking

HDFC Bank Branch network

HDFC Branch ATM network

Free e-age Banking.

Other Privileges

HDFC Bank looks forward to enjoy its customers company at exclusive events, bearing in

mind their personal preferences on cultural activities, and customer can expect to keep

abreast of latest trends in fashion, traveleven the world of finance through our monthly

magazines that offers them all this and much more.

CLASSIC BANKING IN HDFC BANK:

EXCLUSIVE BENEFITS

Easy Shop Debit Card

As a classic customer, one can avail an Easy Shop Debit Card for free without any annual

charge this entitles you for an enhanced limit of Rs. 50,000/- per day on ATM withdrawal

and Rs. 50,000/- when one use the card at a merchant establishment.

Credit Card

Platinum plus card, which offers them exclusive travel and preferential benefits. The

platinum plus, which is priced at Rs.3999/-, comes to classic customer only at Rs.999/-.

Alternatively, customer can avail of a free gold Debit Card with a completely free Add-

on cards will be charged at Rs.250/- only.

Lockers facility

Customers can avail of a locker at any branch in the country at a 50% waiver on annual

locker rental rates.


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HDFC securities e-Banking Account

Enjoy the convenience of e-Banking through the HDFC Securities trading account at

preferential rates.

Monthly Statement

As an HDFC Bank classic customer, one will receive a statement every month. Customers

monthly statement will provide customer with details of all CASA and FD accounts, where

customers are the principal account holder.

Insta Alert

Customers can get transaction alerts through an SMS sent to the customers mobile number

(which need to be registered with bank), or through an E-mail sent to the customers E-mail

ID (which, again, need to be registered with bank). In addition, on registering for the Insta

Alert facility, customer will also be kept informed each time customer use their Debit Card

at a merchant establishment.

Free transaction on HDFC Bank ATMs

If the customer transact on Non-HDFC bank ATMs, the charge for balance enquiry andcash withdrawal will not be waived. Customers can avail if this benefit on transactions on

say Non-HDFC bank (visa/Master Card/Euro Net/SBI/J&K bank) across the country.

Loan At Special Rates

HDFC Bank classic customers are entitled to enjoy reduced pricing on select loan products.

Forex

Customers currency conversion transaction can earn the benefits of an improvement of 5

paisa over the days card rate, helping customers save money when they are buying

currency or earn money when they are selling currency-either way..customer win!


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Delhi (inclusive NCR, Gurgoan, Ghaziabad, Faridabad and

Noida)

Hyderabad (inclusive of Secunderabad)

Kolkata

Mumbai

Pune

Customers are eligible for the preferred programme if they:

Hold at least one saving or current account, sole or joint account, with HDFC Bank.

Maintain a minimum average Monthly balance of Rs. 15 lakhs across all their

accounts (saving, current and fixed deposits).OR

Maintain an average Quarterly balance of Rs. 2 lakhs in their saving account. OR

Maintain an average Quarterly balance of Rs. 5 lakhs in their current account.

The requisite balance can be maintained over their own accounts and over those of

their immediate family members.

In other cities, customers are eligible for the preferred programme if they:

Hold at least one saving or current account, sole or joint account, with HDFC Bank.

Maintain a minimum average Monthly balance of Rs. 5 lakhs across all their

accounts (saving, current and fixed deposits). OR

Maintain an average Quarterly balance of Rs. 2 lakhs in their saving account. OR

Maintain an average Quarterly balance of Rs. 5 lakhs in their current account.

The requisite balance can be maintained over their own accounts and over those of their

immediate family members.


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HDFC BANK LIMITED

Sector: Banks-Private

Board of Directors

Managing Director Aditya Puri

Director Arvind Pande

Director Ashim Samanta

Director (up to 17-10-06) Bobby Parikh

Director C M Vasudev

Director Gautum Divan

Executive Director Harish Engineer

Chairman Jagdish Kapoor

Director Keki M Mistry

Director Pandit Palande

Executive Director Paresh Sukthankar

Director(up to 20-03-06) Ranjan Kapoor

Director Renu Karnad

Director (up to 14-03-07) Venkat Rao Gadwal

Director Vineet Jain


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RESEARCH METHODOLGY

Primary Objective:

Assessment of Consumer Satisfaction towards Banking Sector with special reference to

HDFC Bank. This was done by interacting with people through the medium of

Questionnaires and Direct interviews being taken in some cases. The satisfaction greatly

depends on the quality of service, the interests being provided on various banking facilities

and the payback period for taking any sort of loan. One of the important factors affecting

customer satisfaction is the presence of on-line banking facility being incorporated by the

bank in its very basic functioning infrastructure.

The project helped in developing an insight about the Actual level of satisfaction and the

Expected level of satisfaction. The various grievances that came forwarded during the

survey and the various things which the customers wanted the bank to incorporate in its

structure is attached in the report afterwards in the form of Recommendations. Through the

project, the competitive strategies being followed by other banks were also analyzed.

Techniques:

The problem definition can be said to be the quite essential part of the research process; as itdetermines precisely, what the managerial problem is and the type of information that theresearch can generate to help the problem before conducting the field work. It is better todecide upon the method/technique of data collection. Generally, there are two techniques ofdata collection:1. Census technique2. Sample technique or Convenient sampling

A census is a complete enumeration of each and every unit of population where as in asample only a part of the universe is studied and conclusion about the entire universe is

drawn about that basis. The census method is costlier and more time consuming as com-pared to sampling method but the result are near representatives than sample method.The availability of resources, time factor degree of accuracy desire and scope of theproblem enable us to apply sample technique.


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DATA COLLECTION

The objectives of the project are such that both the primary and secondary data is required

to achieve them. So both primary and secondary data was used for the project. The mode of

collecting primary data is questionnaire mode and sources of secondary data are various

magazines, books, newspapers & websites etc.

1. Primary Data:

The primary data was collected to measure the customer satisfaction regarding HDFC bank.

The primary data was collected by means of direct personal interview method through

structured questionnaire and analysis was done on the basis of response received from the

customers. The questionnaire has been designed in such a manner that the customers

satisfaction level can be measured and consumer can enter his response easily

2. Secondary Data:

The purpose of collecting secondary data was to achieve the objective of studying the

recent trends and development taking place in customer relationship management.

Sampling Design:

It is very difficult to collect information from every member of a population. As time and

costs are the major limitations that the researcher faces.

Definition Of Population:

Our population consisted of the preferred and classic customers of the HDFC Bank. Thereason for choosing the classic and preferred customers as our population was that the CRM

services are usually meant for such classes only and hence the normal customers were not

considered.

Sampling Method:

Our sample consisted of 100 personal interviews. We stratified our sample into two; i.e. we

choose 50 preferred and 50 classic customers. We structured our personal interviews on the

basis of a sample random sample.

Sample size:

Because of the various constraints imposed on our project work, especially time and cost,

our sample size was limited to 100. This also enabled us to obtain an equal number of

respondents in each stratum.


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Sampling plan:

The research was conducted mainly at the branch and further we met certain customers personally at

their offices after getting the proper references.

Questionnaire design:

We designed our questionnaire based on the information acquired from our background

research. We also used our own personal judgment when determining which type of

questions might be the most applicable to the information we were trying to obtain. The

questionnaire consisted of 14 questions with options against each and one open ended

question; at the end, for suggestion. The scale used for questionnaire is given in Appendix

A.

In designing the format of our questionnaires, we used the standard procedure to formulate

a questionnaire.

Collection procedure:

Personal interviews were conducted using individual questionnaire for each respondent.

The responses were recorded directly onto each questionnaire.

Tools of analysis:

After collecting the data has been analyzed through various statistical tools and techniques.

The unwisely data should necessarily be condensed into few manageable groups and tables

for further analysis. Thus it helps to classify the raw data into some purposeful and usable

categories. The tools used are tables and pie charts.

Limitations of the Study

It is said,Nothing is perfect and there would be few shortcomings in this project also. Sincere

efforts have been made to eliminate discrepancies as far as possible but few would have remained

due to limitations of the study.

Time seemed to be our most limited resource. To conduct a comprehensive research project in a two

month period is difficult.

The absence of appropriate funding limited the extent of our study. With addition-al financial

resources, the scope of our study could have been enlarged, resulting in a more representative study.


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Interviewer bias could not be avoided as in case of many surveys open ended questions involve the

use of probing techniques that increase interviewer bias. However, as our study did not use many

open ended questions, the extent of the bias was reduced.

Some of the respondents gave ambiguous replies for certain questions or omit-ed the responses to

some of them. The interpretation of such responses become-s difficult and could generate wrongresults.

CUSTOMER

RELATIONSHIP

MANAGEMENT

BUILDING

SUCCESSFUL

RELATIONSHIPS


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CUSTOMER RELATIONSHIP

MANAGEMENT

Customer Relationship Management (CRM) is fundamental to building a customer-centric

organization. CRM system links together the customer data into single and logical customer

repository. CRM in banking is a key element of differentiation that allows a bank to develop its

customer base and sales capacity. The goal of CRM is to manage all aspects of customer interactions

in a manner that enables banks to maximize profitability from every customer. Increasing

competition, deregulation and the internet have all contributed to the increase in to entry and exit for

the customers, making it easier to switch banks or brokers without feeling the pinch in the wallet.

Retaining customers is a major concern for banking institutions which underscores the importance of

CRM. Customers, faced with an increased array of banking products and the services, are expecting

more from banks in terms of customized offerings, attractive returns, ease of access and transparencyin dealings. By using knowledge of the customer, banks can turn customer relation-ships across a

broad spectrum of touch point branches, kiosks, ATMs, internet, electronic banking, smart cards,

call centers and phone banking. The full integration of these systems, their associated business

processes, and the methods for which information is extracted and used, forms the basis for CRM.

Customer relationship management (CRM) is a customer-centric business strategy with the goal of

maximizing profitability, revenue and customer satisfaction. There are many aspects of CRM which

are mistakenly thought to be capable of being implemented in isolation from each other.

From the outside of the organization, a customer experiences the business as one entity operating

over extended periods of time. Thus piecemeal CRM implementation can come across to the

customer as unsynchronized where employees and web sites and services are acting independently of

one another, yet together represent a common entity. CRM is the philosophy, policy and

coordinating strategy connecting different players within an organization so as to coordinate their

efforts in creating an overall valuable series of experiences, products and services for the customer.

The different players within the organization are in identifiable groups:

1. Customer Facing Operations

2. Internal Collaborative Functional Operations

3. External Collaborative Functions


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Management decisions, e.g. financial forecasting and customer profitability analysis

Prediction of the probability of customer defection (churn analysis)

Analysis CRM generally makes heavy use of data mining.

COLLABORATIVE CRM:

The function of the customer interaction system or collaborative customer relationship

management is to coordinate the multichannel service and support given to the customer by

providing the infrastructure for responsive and effective support to customer issues, questions,

complains etc.

Collaborative CRM aims to get various departments within a business, such as sales, technical

support and marketing, to share the useful information that they collect from interactions withcustomers. Feedback from a technical support center, for example, could be used to inform

marketing staffers about specific services and features requested by customers. Collaborative

CRMs ultimate goal is to use information collected from all departments to improve the quality

of customer service.

Four-step framework for one-to-one marketing that can be adapted to CRM:

Given by Don Peppers and Martha Rogers

1. Attracting, Retaining and Growing Customers

2. Building Loyalty

3. Reducing Customer Defection

4. Forming Strong Customer Bonds.


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CUSTOMER

SATISFACTION


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CUSTOMER SATISFACTION

Conceptual framework:

Relationship

Antecedents

Affective

Responses

Behavioral

Intentions

Service quality

Customer

knowled e

Relationship

managers

Satisfaction

Trust

Positive World-of-

mouth intentions

Purchase

Intentions


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global definition of service quality might be more appropriate since its inherent dimensions

are likely to be dependent on service settings (Brown, Churchill and Peter, 1933, Carman,

1990). Zeithaml (1988), for instance, defines service quality as the consumers judgement

about the overall excellence or superiority of a service. Likewise, Anderson and Fornell

(1994) refer to service quality as a global evaluation of a firms service delivery system. As

a boundary spanner, the relationship manager plays a critical role in the service delivery

process. They are normally the primary, if not only, contact between the organization and

its customers (Sharma and Sarel, 1995). Each of these customer contacts has the potential

of positively or negatively impacting the customers view of the service provided by the

sales persons company (Shepherd, 1999).

SATISFACTION:

Although the research literature on satisfaction has swelled enormously over the past three

decades, a universally agreed theoretical or operational definition still eludes marketing

academics. A widely used paradigm of customer satisfaction is the disconfirmation ofexpectation theory (Oliver, 1980). It defines satisfaction as a mental comparison of the

quality that a customer expected to receive from an exchange and the level of quality, the

customer perceives actually receiving from the exchange. Even if this theory is commonly

employed, for example, that a man is going to dinner with his mother-in-law. If he expects

the event to be boring, and that it is indeed tiresome, the man is most likely to be

unsatisfied (even if his expectation were met). Like service quality, satisfaction was also

attributed all inclusive definition. For example, Crosby, Evans, and Cowles (1990) refer to

customer satisfaction with the sales person reflects as an emotional state that occurs in

response to an evaluation of the interaction experience that the customer has with the sales

person. Despite the obvious importance of customer satisfaction for most business today,

Szymanski and Henard (2001) observed in their meta-analysis of 50 relevant papers that

few students have investigated the outcomes of satisfaction and only a few outcomes of

satisfaction have been investigated in these students.

TRUST:

Trust is generally thought to be a key determinant of the quality of buyer-seller

relationships (Swan, Bowers, and Richardson, 1990). Morgan and Hunt (1994)

conceptualize trust as existing when one party has confidence in an exchange partners

reliability and integrity. Over the years, many researchers uncovered that trust is positivelyrelated to several variables in consumer research. For example, trust was found to be

significantly correlated to cooperation (Morgan and Hunt, 1994), relationship commitment

(Achrol, 1991; Morgan, 1994), positive word-of-mouth intentions (Bergeron, Ricard,


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and Perrien, 2003) future interactions (Crosby, Evans and Cowles, 1990; Ramsey and

Sohi, 1997), and purchase intentions (Pilling and Eroglu, 1994).

POSITIVE WORD-OF-MOUTH INTENTIONS

Word-of-mouth (WOM) is probably the oldest mechanism by which opinions on products,

brands, and services are developed, expressed, and spread (Lau & Ng, 2001). File, judd,

and Prince (1992) define WOM as recommending the firm and the service to others.

Specially, Anderson (1998) refers to positive WOM as relating pleasant, vivid, or novel

experiences, recommendations to others, and even conspicuous display. Numerous

researches reinforced the contention that positive WOM is a cherished outcome in

marketing. In 1995, Katz and Lazarsfeld found positive WOM seven times more effective

than newspaper and magazine advertising, four times more effective than personal selling,

and twice as effective as radio advertising in influence consumers to switch brands. In

1983, Morin uncovered that referrals from others accounted for three times as many

purchases as did advertising when consumers were asked what factors influenced their

purchases of 60 different products.

PURCHASE INTENTIONS

Purchase intentions refer to the degree of perceptual conviction of a customer to repurchase

a particular product (or service) or to repurchase any product (or service) at a particular

organization. The implicit assumption made by those who gather and analyze consumer

intentions data is that they will reflect future sales behaviors. Researches in socialpsychology suggests that intentions are the best predictor of an individuals behavior

because they allow each individual to independently incorporate all relevant factors that

may influence the actual behavior. Armstrong, Morwitz, and Kumar (2000) compared

buying intentions with other sales forecasting tools. They found that purchase intentions

represent an accurate measure of future sales and that it provides better forecasts than an


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extrapolation of past sales trends. The benefits of maintaining a base of long -term

customers are widely recognized by marketers. Given than the cost of retaining existing

customers is less expensive than prospecting for a new customer (Spring, Harrell, and

Mackoy, 1995), purchase intention is a very important consideration for financial

institutions.

OBJECTIVES OF THE STUDY:

The primary objective of our study is to analyze the efficiency and effectiveness of the

customer relationship management services provided by the HDFC Bank in attaining

customer satisfaction.

The main objectives are:

To analyze the CRM services of HDFC bank.

To know whether customers are aware of the classes of customers in HDFC

bank.

To know whether customers are aware of the customer class to which they

belong.

To check which they are availing being in a managed customer group.

To check the satisfaction level of the preferred and classic customers

regarding CRM services.

To analyze customers repurchase intentions.

To analyze customers word-of-mouth intentions.

RELATIONSHIP MANAGEMENT TOOLS

1. Relationship file


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Relationship file is a RM tool which is needed to be maintained for each group

raced to the preferred portfolio.

If we RM are to run an effective preferred programme. It is imperative those we:

Know your customer

Understand the customers wallet and requirements.

Maintain regular and effective contact with them

Set expectations/target at a relationship level, so we know how to focus our efforts.

Aggressively monitor/track RMs.

These are no substitute for these relationship files and this discipline has to be

inculcated without expectation.

Each RF is divided into 3 sections/

Relationship details

Contact history

Correspondence/miscellaneous

RELATIONSHIP FILE- CONTENTS

Monthly contact plan

At beginning of each month, the RM/PB needs to print out the list of the entire group IDs in

his/her portfolio. RMs/PBs then need to make a contact plan (monthly contact plan) such

that all the groups are contacted at least once during the month.

A typical RF consists of the following

1. Program entry form

Copy of the programme entry form to be filled in relationship file at the time of

sending the racing request to CPU.


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2. Individual/corporate profile sheet

RMs have to fill this sheet once at the time of racing the client. This sheet is to be

used as an addendum to the CRA, and should be modified whenever there is any

change/ new details added to the customers profile.

3. Relationship wallet profile

This sheet captures the details of the customers relationship with other banks.

This

needs to be filled and updated on an ongoing basis i.e., as and when RM

obtains

details on the customers relationship with other banks.

4. Customers relationship Analyzer (CRA) Individual/Non Individual

This sheet has to be filled in once for each client (Primary ID in the

relationship) and pasted on the inside of the file cover. As and when the customers

holding/ Relationship with us changes, can be updated/ modified suitably or

replaced with a new sheet.

5. Electronic Monthly Activity Review Sheet (EMARS)

The EMARS is to be used by RM and the BM to record progress and actionable on each

relationship each month. The BM with the RM has to review the CRA, and basis the

review determines actionable on the relationship. This is not one time activity the BM

needs to do a daily review with each RM for a set of customers. e.g., if the

RM has 150 groups in his/her portfolio, the BM should ensure that all 150 groups

are reviewed and actionable set during the month for each group.

At the time of review each month, the BM should check the CRA and previous EMARS,

Study achievement against actionable, and determine future actionable on the

relationship with the RM.


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expectedFrom

relationshipOver currentfinancial year

Cross sellingachievements:Sold duringcurrent year

Relationshipwallet profile

Details of theother bankrelationship

ongoing BM/CH Relationshipwallet profile

Relationship

details

Printout of the

relationshipdetails screen inCCM

Monthly BM/CH CCM

Product Holdingdetails

Printout of theproducts holdingscreen in CCM

Monthly BM/CH CCM


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FINDINGS

AND

ANALYSIS PART


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Questions with analysis and interpretation

A questionnaire was used as a primary source of data collection whose analysis is given

below:

Q1. How do you come to know about HDFC?

a) Advertising

b) Friends

c) Relatives

d) Other source

INTERPRETATION

The HDFC Bank is doing well in terms of advertising.

Needs to focus on good relations with customers so that good word mouth is spread as we

see the number of references is too less.

42.42%

18.18%

36.36%

3.04%

Advertis ingFriendsOther Sources

Relatives


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Q2. Name the bank which comes in your mind first and why?

.....

.....

INTERPRETATION

Response rate of the factors like Brand Image, Brand Awareness, Sentiments, CSR(Corporate Social Responsibility) is very low for HDFC as compared to its major

competitor.

0

5

10

15

20

25

30

J & K SBI HDFC PNB ICICI

27

0

4

1 1

26

4

7

21

14

3

10

1 1

12

0 0 0 0

No. of Responses

Name of Banks

Sentiments

Brand Awareness

Brand Image

CSR


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Q3. Rank the HDFC on the following features:

a) Products provided:

i) like very much ii) neutral iii) dislike some what

b) Efficiency :

i) above average ii) average iii) below average

62.13%

7.57%

30.30%Like very muchDislike some whatNeutral

66.66%

6.07%

27.27%

AverageBelow averageAbove average


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INTERPRETATION

Most of the people are moderately satisfied.

Q5. HDFC is a good bank for:

a) Professionalism

b) Responsiveness

c) Relation building

d) Understanding customer

52%

28%

15%

5%

0%

10%

20%

30%

40%

50%

60%

o.oesponses

Professionalism

Responsiveness

Relation building

Understanding customer


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INTERPRETATION

Most of the people find HDFC Banks good in terms of professionalism.

Q6. Have you experienced service failure of the HDFC bank?

a) Always

b) Rarely

c) Never

72.72%

24.24%

3.04%

Never

Rarely

Always


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INTERPRETATION

Most of the employees are moderately responsible when the customers approach them.

Q8. For how much time you are in relation with HDFC?

a) Days

b) Months

c) Years

2%

68%

30%

Days

Months

Years


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INTERPRETATION

Maximum number of accounts i.e. maximum market share is holded by J&K Bank.

Network is the biggest extra facility provided by the J&K Bank.

Q10. When you dont have the use of this application, what impact does this have on

your business?

a) High effect

b) Moderate effect

c) Least effect

80%

1%

11%

3% 2% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

MarketShare

Name of Banks

J & K

ICICI

SBI

PNB

YB

CB

11%

48%

41%High effect

Moderate effec t

Least effect


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INTERPRETATION

Maximum customers are moderately effected i.e. maximum customers have a moderate

effect on their business due to HDFC Bank.

Q11. How many transactions have you done in your account in the last month?

a) 2 to 5

b) 5 to 10

c) 10 to 25

d) more

56%

33%

11%

0%0%

10%

20%

30%

40%

50%

60%

%ageofTransaction

2 to 5

5 to 10

10 to 25

More


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INTERPRETATION

Market impact i.e. turmoil and recession effected more on transactions.

Q13. Are availing any other service from HDFC Bank?

a) Yes b) No

If yes please mention (e.g. SB, FD, MF, INS, etc. or in relation)

.....

..

.....


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a)

b)

INTERPRETATION

INTERPRETATION

Most of the customers having current account, dont avail any other services of the HDFC

Bank and those who avail any other services are availing mostly saving accounts.

Q14. How likely will you recommend our product to your friend or colleague?

a) Highly

b) Moderately

c) Low

44%

56%

0%

10%

20%

30%

40%

50%

60%

%ageofResponses

Yes

No

83%

10%3%

4%

Saving Account

Current Account

Insurance

Fixed Deposit

11%

82%

7%

Highly

Moderate

Low


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INTERPRETATION

Maximum customers are moderately ready to recommend the products to others.

FINDINGS

CUSTOMER SATISFACTION :

Least effort put on relationship building which ultimately led to bad word of mouth.


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Biggest limitation is the non-availability of CC & OD and less number of Branches

and ATMs only single branch in South Kashmir and single ATM.

High charges, which generally the people of the Valley are not used to.

Customer services are good and branches are available throughout India that leads to

good accessibility outside J&K.

Products provided are costly as compared to the other competitive banks in the

Valley.

Market share of HDFC is very less in Kashmir, reason being less awareness among

people especially rural areas.

The business model of the HDFC Bank is having an edge over other main

competitors in the Valley.

Application of CHI-SQUARE test to the observed data:

(Q No. 1)

Computation of :


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APPENDIX

W e u n d e r s t a n d y o u r w o r l dW e u n d e r s t a n d y o u r w o r l d

Date:-.

APPENDIX A

Questionnaire

The questionnaire is designed to assess the satisfaction level of the customers for the

services provide to them by HDFC Bank. The questionnaire contains 14 questions

with options against each. The customer has to tick mark the most appropriate option

nd give reasons wherever needed.

Q1. How do you come to know about HDFC?

a) Advertising b) Friends c) Relatives d) Other source

Q2. Name the bank which comes in your mind first and why?

.bank, because of its


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a) Sentiments b) Brand Awareness c)Brand Image d) CSR

Q3. Rank the HDFC on the following features:

a) Products provided:

I) like very much ii) neutral iii) dislike some what

b) Efficiency:

I) above average ii) average iii) below average

c) Satisfy of funds:

I) excellent ii) good iii) average IV) poor

Q4. Rate your level of satisfaction with HDFC:

a) Highly satisfied b) Satisfied c) Dissatisfied

Q5. HDFC is a good bank for:

a) Professionalism b) Responsiveness

c) Relation building d) Understanding customer

Q6. Have you experienced service failure of the HDFC bank?

a) Always b) Rarely c)Never

Q7. When you approach to the bank, they are?

role of crm in customer satisfaction

Documents