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1.1 ) WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT
CRM can be defined as it is a comprehensive strategy and process of acquiring,retaining and patterning with selective customers to create superior value for thecompany and the customer.
The broad framework of CRM process comprises of four sub-processes:
Though the concept of buyerseller relationship is not new, and has been practiced
in on form or the other since tome immemorial, it is only in recent times that Customer
Relationship Management !CRM" has turned into a bu##word. Customer loyalty has
always been valuable, but today it has become more vital for success.
$
1. Customer
relationsi!"ormation
!ro#ess
$. Relational
!er"orman#e
e%aluation
!ro#ess
4. CRM
evolution orenhancementprocess
&. Relationsi!
mana'ement
an( 'o%ernan#e
!ro#ess
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CRM can help large traditional businesses deliver that personal touch, one to one
relationship and customi#ed service that it used to pride itself on when the business was
small. %t helps large organi#ations seemingly weighted down by huge customer bases,
infrastructure, processes and inventory appear as fleet footed and customer oriented as
the friendly store or a dotcom startup.
CRM is a well defined business strategy comprising a series of functions, s&ills,
processes and technologies that together allow firms to profitably manage !acquire and
retain" customers as tangible assets to offer personali#ed and well differentiated
e'periences and to build long term relationships with customers.
1.& ) INTROUCTION TO CUSTOMER SER*ICE
(
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)ll businesses must have some dissatisfied customers, if only occasionally. *et a
typical business only hears around + of those customers that are dissatisfied. -hat
about the other + or so/ They 0ust quietly go elsewhere, and may well never come
bac&. )nd a ma0or source of dissatisfaction is either communications alone, or how ma0or
source of dissatisfaction is either communications have failed to correct other problems
or even ma&e them worse.
%t will be no surprise to anyone who deals with customers that they tend to be
demanding in their relationship with suppliers !unreasonably so, too, you may say1
sometimes true but more of this later". 2ome of these demands are inherent, while others
more contrived.
1) CUSTOMER EMANS
%t will be no surprise to anyone who deals with customers that they tend to be
demanding in their relationship with suppliers !unreasonably so, too you may say1
sometimes true but more of this later". 2ome of these demands are inherent, while others
more contrived3
2ome demands are inherent to the very nature of the customersupplier
relationship. 2uch demands include customer4s requirements for courtesy, efficiency,
promptness and a caring, individual service. 2uch a list cannot be regarded as in any way
unreasonable.
&) CUSTOMER E+PECTATIONS
Customers could conceivably want all sort of things1 you to greet their enquiry
with enthusiasm and the insistence that the company RollsRoyce collects them within an
hour to whis& them off to a top restaurant to discuss their needs over lunch. 5ut here the
best description of what a supplier is prepared to entertain is a list of 6reasonable wants4.
)nd although there are a number of factors involved, they all stem from one umbrella
7
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description that is usually voiced by customers as 6wanting to find people who are good
to do business with4. %n a word, customers might say that they want their suppliers, and
the people who represent them, to be professional.
$) HOW TO MEET CUSTOMER E+PECTATIONS
Customer service !also &nown as Client 2ervice" is the provision of service to
customers before, during and after a purchase.
%ts importance varies by product, industry and customer. )s an e'ample, an e'pert
customer might require less prepurchase service !i.e., advice" than a novice. %n manycases, customer service is more important if the purchase relates to a service as
opposed to a product8.
Customer service may be provided by a person !e.g., sales and service
representative", or by automated means called selfservice. 9'amples of self service are
%nternet sites.
Customer service is normally an integral part of a company4s customer valueproposition.
The implementation of a particular customer service proposition must consider several
elements of the organi#ation, including
cultures
hiring
training incentives
processes
support technology
Competitive advantage
:
http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Customer_value_propositionhttp://en.wikipedia.org/wiki/Customer_value_proposition8/11/2019 GNGcrm in Banks
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) companymay attempt to differentiate itself from its competition through the
provision of better customer service. The consistent delivery of superior service requires
the careful design and e'ecution of a whole system of activities that includes people,
technology,and processes. )lthough, the rewards will include improved revenue from
customers that are impressed with the service provided.
Role of technology
Technology has made available a wide range of customer service tools. They
range from support websites and the ability to have live chats with technical staff to
databases trac&ing individual customers; preferences, pattern of buying, payment methods
etc., and tailoring products and service responses based on this advanced data. 2pecialist
software that is designed for the trac&ing of service levels and for helping recogni#e areas
for improvement are often integrated into other enterprise operational software tools such
as 9R
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=uhi 2rivastava, a relationship manager with >T% 5an&, spent a day at a Mumbai hospital
last month loo&ing after a customer who underwent a cataract surgery. This was
2rivastava4s call of duty as the idea was to meet the beyond ban&ing needs of senior
citi#ens who are customers of its priority ban&ing offerings. ) vast change in scenario
from the times when public sector ban&s !T% offers special services to senior citi#ens who are customers of its priority
ban&ing offerings.
%C%C% has wor&ed on a new model and today processes : la&h cheques in 0ust few
hours every day
6Mystery shopping4 is used by 25C to trac& its service delivery across all ma0or
customer touchpoints
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citi#en to the branch on a wheelchair and convinced him of the veracity of statements
provided.
The products offered by competing ban&s are similar. The core differentiators are the
brand and the nature of services provided. Most ban&ers said a lot of effort goes into
ensuring service quality. The challenge is whether they are able to offer customer a fair
and transparent system.
Meanwhile,
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8 Retain
valuable
customers.
8 Retain
valuable
customers.
! Ac"uire
customers and
prospective
customers
! Ac"uire
customers and
prospective
customers
# $eliver
increased value
to the
customer.
# $eliver
increased value
to the
customer.% &nteract with
customers and
prospective
customers.
% &nteract with
customers and
prospective
customers.
' Customi(e
by customer
segment
' Customi(e
by customer
segment
) $evelop
product
services
Channels to
meet
customer*s
needs
) $evelop
product
services
Channels to
meet
customer*s
needs
+ $ifferentiate
based on
customer
needs,
characteristicsand behavior.
+ $ifferentiate
based on
customer
needs,
characteristics
and behavior.
.nderstand
customer*s
needs
.nderstand
customer*s
needs
CRMCRM
&.1 ) CRM IN ,AN-ING SECTOR
-e have seen that relationship mar&eting implies attracting, maintaining and enhancing
customer relationship. %t is a strategy to learn more about customer4s needs and behavior
in order to develop stronger relationship with them.
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Te "or#es o" (ere'ulation 'lo/ali0ation an( a(%an#in' te#nolo' a%e in#rease( te
#om!etiti%e !ressure in te /an2in' in(ustr.
The %ndian ban&ing industry too is going through turbulent times. 2ince the financial
reforms started, ban&s have been given a great degree of freedom in determining their
rate structure for deposit and advances as well as their product range. The freedom of
choice which ban& customers did not have earlier because of standardi#ed products and
regimented interest rates has now been given to the customers.
5an&s are functioning increasingly under the competitive pressures emanating from
within the ban&ing system, from non ban&ing institutions as well as from the domestic
and international capital mar&ets. Thus, in this era of increased competition, in order to
prosper, it has now become imperative for the ban& to focus on developing longterm
relationships with their customers.
Te "o#us o" /an2s soul( /e to si"t teir orientation "rom transa#tion mar2etin' to
#ulti%ation o" relationsi! mar2etin'.
Ma3or /ene"its o" !ursuin' Relationsi! Mar2etin' is4 Retainin' #ustomer as
a#5uirin' ne6 #ustomer is more #ostl tan retainin' e7istin' ones. Moreo%er te lon'
time #ustomer ten(s to /e less !ri#e sensiti%e an( usuall !ro%i(e "ree 6or(8o"8mout
a(%ertisin' an( re"errals.
&.& ) ,ENE9ITS O9 CRM TO ,AN-S
CRM /anking 0ocuses on the Customer
$A
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CRM manages to places the customer at the focal point of the organi#ation in order to
cater to his needs, satisfy him and thus ma'imi#e the profits of the organi#ation. 5an&ing
CRM understands the needs of the customer and integrates it with people, technology,
resources and business rocesses. %t focuses on the e'isting data available in the
organi#ation and uses it to improve its relationship with customers. 5an&ing CRM uses
information and analytical tools to secure customer focus. Thus it is completely essential
that ban&s implement CRM in order to secure this.
1verall 2rofitability
CRM enables ban&s to give employee;s better training that helps them face customers
easily. %t achieves better infrastructure and ultimately contributes to better overall
performance. The byproducts of CRM ban&ing solutions are customer acquisition,
retention and profitability. 5an&s that don;t implement CRM will undoubtedly find
themselves with lesser profitability coupled with a sharp decline in the number of
customers.
3atisfied Customers
%t is important to ma&e a customer feel as if he L she is the only one this will go a long
way in satisfying and retaining them. 5an&ers need a return on investment and it has been
proved that increase in customer satisfaction more than contributes a fair share to R%.
The main value of CRM ban&ing lies in satisfaction and increased retention of customers.
Centrali(ed &nformation
CRM ban&ing solutions manage to clearly integrate people, processes and technology.
CRM ban&ing provides ban&s with a holistic view of all ban& transactions and customer
information as well and stores it in a single data warehouse where it can be studied later.
$$
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&.$ ) ,ENE9ITS O9 CRM TO CUSTOMERS
Customer relationships are becoming even more important for ban&s as mar&et
conditions get harder. Competition is increasing, margins are eroding, customers are
becoming more demanding and the lifecycles of products and services are shortening
dramatically. )ll these forces ma&e it necessary for ban&s to intensify the relationship
with their customers and offer them the services they need via the channels they prefer.
2ervice provisioning throughout the entire life cycle of the corporate customer, from
the initial stages to the establishment of a close, longterm relationship with profitable
clients,
ptimi#ation of the use of ban& resources, such as alternative channels of distribution
!internet and home ban&ing",
2ignificant reduction in and limitation of operational costs through system automation
and standardi#ation,
Gow maintenance and e'pansion costs owing to the use of modern administration
tools which allow ban& employees to ma&e a wide range of modifications to the
system
CRM permits businesses to leverage information from their databases to achieve
customer retention and to crosssell new products and services to e'isting customers.
Companies that implement CRM ma&e better relationships with their customers,
achieve loyal customers and a substantial paybac&, increased revenue and reduced
cost.
CRM when successfully deployed can have a dramatic effect on bottomline
performance. ?or e'ample, Gowe4s ome %mprovement -arehouse, in a span of $K
months, achieved a (D+ percent return on investment !R%" on its N $$m CRM
investment.
$(
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)ccording to a study conducted in the sector of ban&ing, convenience of location,
price, recommendations from others and advertising are not important selection
criteria for ban&s. ?rom customers4 point of view, important criteria are3 account and
transaction accuracy and carefulness, efficiency in correcting mista&es and
friendliness and helpfulness of personnel. Thus, CRM, highquality attributes of the
product L service and differentiation proved to be the most important factors for
customers.
)nother study conducted in a 9uropean ban& shows that with CRM, the ban& was
able to focus on profitable clients through efficient segmentation according to
individual behavior. %nformation about 6who buys what and how much4 enabled the
ban& to have a commercial approach based on the client and not solely on the
product. Thus, the ban& was able to better satisfy and retain its customers.
$ ) CHALLENGES 9ACE ,: ,AN-S IN SUCCESS9UL
IMPLEMENTATION O9 CRM
Many organi#ations are considering introducing CRM systems or are in the process ofdoing so. The main concern of these organi#ations is their ability to ma&e the necessarychanges at the level of organi#ational strategy that the introduction of the CRM systemrequires. rgani#ations are also concerned about damaging their e'isting customer caresystem. Their fears are based on past failures in their own or in other organi#ations.
$7
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-ith most other types of information systems we are concerned mainly with operationsrelevant to the organi#ation4s internal resources. 5y contrast, introducing a CRM systemaffects the company4s customers, who are e'ternal to the organi#ation and beyond itscontrol. The company4s reputation and future are greatly dependent on the success of the
CRM implementation. ?ailure in the introduction of the CRM system, especially inservice and sales phone centers, can result in real disaster for the organi#ation. Thepresent article focuses on issues that must be addressed in order to ensure that a newCRM system is introduced in the organi#ation in the best possible way, generatingma'imum return on investment, without affecting current activity, and with minimal ris&.
The implementation of CRM systems varies from one organi#ation to the ne't1 each onemust be treated as a separate application, having different needs and requiring differentsolutions.
-e identify seven types of CRM applications3
!$" CRM systems for call centers1!(" CRM systems for service representatives in the field1!7" CRM systems for telemar&eting1!:" CRM systems for sales managers in the field !sales managers who are in directcontact with the client"1!+" CRM systems for mar&eting1!D" analytic CRM systems for the creation of 5% insights and reports based on a databaseof client contacts1 and!I" ORM systems for servicing partners and clients over the %nternet. The last three arenot discussed in this article.
-hat factors can interfere with the successful implementation of a CRM system at thefunctional and technological level/ %n our e'perience, three main factors are responsiblefor crucial failures. To the e'tent that %T can solve these problems, part of the difficultiesin introducing CRM systems into the organi#ation would disappear. @ote however, that insome cases %T is not in a position to solve these problems, and the implementers of theCRM system must cope with these failures.
The first problem occurs when the CRM system is not connected directly to theoperational systems. %n the worst case it is not possible to access the operational andlegacy data about clients and products through the CRM, and users must accesssimultaneously other systems, resulting in double entries. %n another problematic case theconnection is not complete and transparent. %n this case it is possible to access theoperational system not only through the CRM but also directly, circumventing the CRMand rendering its use optional. The second problem has to do with a client database thatcontains low quality data or with data that is missing altogether. The third problem is one
$:
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of poor performance, the result of the fact that the CRM system is connected to a largenumber of systems and often interacts with various technologies, many of them legacysystems. %f the transition to CRM does not include the upgrading of the technology oflegacy systems, performance is degraded.
9ven if the CRM system was developed under optimal conditions, several failures andchallenges are built into every CRM system at the organi#ational level. -e must be awareof these failures and challenges and create solutions for them as part of the training anddeployment process. The introduction of a CRM system requires a period of time forentering client data into the system. This detailed information is needed later to conductan intelligent dialog with the client. 5ut often those who feed the data into the CRMsystem are not the ones who benefit from the data, and have therefore no interest inentering the data in the first place, and certainly not in the best and most reliable waypossible. )nother phenomenon we encountered in the implementation of CRM systems isthat those who could benefit from the data are not using it often enough, which reducesthe business value that the CRM system was supposed to provide to the organi#ation. The
infrequent use is the result of a lac& of awareness of its e'istence or of a lac& of faith inits quality.
)t call centers, implementation of a CRM system involves several unique issues relatedto the fact that these vital, (:LI systems cannot be down even for a few moments. Callcenters e'perience a high turnover of personnel. eavy use of students creates additionalproblems !for e'ample, it is impossible to introduce a new CRM system during the e'amperiod". CRM systems intended for sales managers are sub0ect to conflict with the salesmanager4s personal interest. 2ales managers prefer not to e'pose their leads, contactpersons, and the status of their transactions, and may try to prevent entering the completedata into the system. @either are sales managers enthusiastic about the level of oversightmade possible by entering data into the CRM system. 2ales managers are generallypowerful players in the organi#ation, who can oppose the introduction of the system.They also see& the reali#ation of immediate profits, whereas the benefit of the system isoften felt at a later stage.
-hat is needed to succeed in the introduction of a CRM system/ The success of a CRMpro0ect depends first and foremost on the people who implement it and on the manner inwhich they use the system. ) wor&ing CRM system that is not being used is useless. )smart CRM system requires a smart user. Therefore the successful deployment of a CRMsystem depends on upgrading the entire sales and service organi#ation, including thepersonnel and the supporting tools.
3ome basic problems :
The difficulty of obtaining a complete view of customers.
The need to move away from dis0ointed, standalone, and inconsistent channels to
provide a cohesive, multichannel offering.
$+
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The burden of disconnected legacy systems and disparate databases that store client
financial data. The cost and comple'ity of meeting stringent government regulatory and client
security and privacy requirements. The pressure on margins and growth prospects from increased competition.
The costs associated with retaining customers and developing customer loyalty.
$D
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;.1 ) SER*ICES PRO*IE ,: STATE ,AN- O9 INIA
2tate 5an& of %ndia !25%" is the largest ban& in %ndia. %f one measures by the number of
branch offices and employees, 25% is the largest ban& in the world. 9stablished in $KAD as
5an& of 5engal, it is the oldest commercial ban& in the %ndian 2ubcontinent. 25%
provides various domestic, international and @R% products and services, through its vast
networ& in %ndia and overseas. -ith an asset base of N$(D billion and its reach, it is a
regional ban&ing behemoth. The government nationali#ed the ban& in $++, with the
Reserve 5an& of %ndia ta&ing a DA ownership sta&e. %n recent years the ban& has
focused on two priorities, $", reducing its huge staff through Folden handsha&e schemes
&nown as the Joluntary Retirement 2cheme, which saw many of its best and brightest
defect to the private sector, and (", computeri#ing its operations.
These are some services provided by 25%
3A4&563 /A57 ACC1.5T :
i. 2avings 5an& )ccounts !25 )Lcs" are designed to help customers inculcate the habit of
savings. %t helps the customers &eep their surplus funds with the ban& and earn interest
while providing the fle'ibility for withdrawals.
ii. 25 )Lcs can be opened by an eligible individual in single name or 0ointly with others
and by certain organisationsLagencies approved by R5%.
iii. The prospective customer will need to comply with the Enow *our Customer
!E*C" guidelines which are mandatory. The ob0ective of E*C guidelines is to prevent
misuse of the ban&ing system intentionally or unintentionally for criminal purposesL
$I
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money laundering and other fraudulent activities. The E*C guidelines also help ban&s to
understand their customers better.
iv. The customer identification will be on the basis of documents provided by the
customer as !a"
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vii. The applicant!s" will need to come to the branch, in person, for opening the account
and will sign at the relevant places in the presence of a 5an& fficial. The introducer
may be required to come to the 5an& in person if it is so warranted.
viii. %nterest P 7.+ p.a. with half yearly interests is paid on 25 )Lcs on the minimum
balance maintained in the account between the $Ath and the last day of the month.
%nterest is credited on =une 7A and Hecember 7$every year. The interest rate and the
method of application are sub0ect to changes from time to time.
i'.. ) passboo& is issued in all 2avings 5an& )ccounts.
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iv. The customers may receive the statements of account according to the frequency
desired by them.
v. Cheque boo&s are issued to all Current )ccount holders and all withdrawals
should be made only through issue of cheques. ) cheque should not be issued for
an amount of less than Rs. +AL.
vi. ) cheque which is presented more than D months after the date of issue will be
treated as 8stale8 and shall not be paid. 2uch cheques shall be paid only after
revalidation by the drawer.
vii. Cheques should not be drawn without adequate balance or against uncleared
effects, in order not to attract the penal provisions of section $7K of the @egotiable
%nstruments )ct.
viii. The cheque boo& should be &ept safely to prevent any misuse and consequential
loss to the depositor!s". The loss of any cheque or the cheque boo& should be
promptly reported to the 5an&.
i'.
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i. Term Heposit )ccounts can be opened by individuals, partnership firms, private
and public limited companies, >?sLspecified associations, societies, trusts etc.
ii. ?ormalitiesLprocedures relating to identification and introduction for opening of
Term Heposit )ccounts in the name of individuals are same as those mentioned
for 2avings 5an& )ccount. ?or term deposit accounts of limited companies,
partnership firms, societies, trusts etc. the documentation formalities will be made
available on request.
iii. The 5an& is required to obtain
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i'. Term Heposit )ccount can be transferred from one branch to another free of cost
but not to a branch of )ssociate 5an& of 25%. The depositor has the option to
submit his application and the THR at the transferor or transferee branch.
32C&A9 TRM $213&T ACC1.5T
i. 2pecial Term Heposit !2TH" )ccount can be opened in the same way as the Term
Heposit )ccount. The interest on the 2TH )ccount is compounded at quarterly
intervals and principal and interest are paid on maturity.ii. Minimum and ma'imum period of deposit may be I days and $(A months
respectively.Minimum and ma'imum periods are sub0ect to change.
iii. Minimum amount of deposit is Rs.$,AAAL and thereafter, in multiple of Rs.$AAL.
iv. Goan up to A of principal and accrued interest is available against 2pecial Term
Heposit.
v. ther terms and conditions are same as in case of Term Heposit )ccount.
vi. The 5an& offers other variants of fi'ed deposits li&e recurring deposit accounts
etc. ?urther details can be had from the branch where you wish to open the
account.
C;. C199CT&15 219&C