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ACKNOWLEDGEMENT
I,ABHISHEK GUPTA MBA Student in NIEC Business College Delhi ,is
highly to all those who guided me in completing this project.
First of all,I would like to pay my heartiet thanks to entire NIEC Faculty
especially ,who provided me such a wonderful guidance to do research
project and provided their valuable suggestions in understanding the work
of Research Project.
LAST but not the least,I would like to thanks all faculities at NIEC
Business college,who gave me the useful tips and suggestions regarding
the project.
ABHISHEK GUPTA
MBA 4RD Semester
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TABLE OF CONTENTS
Title Page
Acknowledgement
Project Summary
S.No. Subject Page No.
1. Company Profile(Religare)
2. Group Companies of Religare3. Mission & Vision
4. Management Profile
5. Product Profile
6. Competitive Analysis Of Securities Industries
7. SWOT Analysis
8. Customer Relationship Management & Sales
9. Levels Of Customer Relationship
10. Ideal Investment Ratio
11. Customer Retention
12. Research Methodology13. Analysis
14. Recommendation
15. Bibliography
16. Annexure
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PROJECT SUMMARY
The project objective included finding the customer satisfaction & expectations from stockbrokers
in Delhi and NCR regions. In this project I did a survey in brokerage house where clients sit & trade
in stock market. It was a focused group survey and the main objective of the project was to
understand role of relationship manager as a financial advisor because client needs a regular
assistance from his RM. I also tried to find out that there were some clients who denied shifting
their existing brokerage firm & why some clients were ready to change their broker firm.
Objective of the study:
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The Research project has been carried out to aid the Religare Securities in offering services that the
customer needs and also to improve on some of the existing services of the firm & to study the
customer behavior towards their brokerage firms.
Religare is driven by ethical and dynamic process for wealth creation. Based on this, the company
started its endeavour in the financial market.
Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare
Securities Limited, Religare Finvest Limited, Religare Commodities Limited and Religare
Insurance Advisory Services Limited provides integrated financial solutions to its corporate, retail
and wealth management clients. Today, we provide various financial services, which include
Investment Banking, Corporate Finance, Portfolio Management Services, Equity & Commodity
Broking, Insurance and Mutual Funds. Plus, theres a lot more to come your way.
Religare is proud of being a truly professional financial service provider managed by a
highly skilled team, who have proven track record in their respective domains. Religare operations
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are managed by more than 2000 highly skilled professionals who subscribe to Religare philosophy
and are spread across its country wide branches.
Today, we have a growing network of more than 150 branches and more than 300 business
partners spread across more than 180 cities in India and a fully operational international office at
London. However, our target is to have 350 branches and 1000 business partners in 300 cities of
India and more than 7 International offices by the end of 2006.
Unlike a traditional broking firm, Religare group works on the philosophy of partnering for
wealth creation. We not only execute trades for our clients but also provide them critical and timely
investment advice. The growing list of financial institutions with which Religare is empanelled as
an approved broker is a reflection of the high level service standard maintained by the company.
Religare Enterprises Limited group comprises of Religare Securities Limited, Religare
Commodities Limited, Religare Finvest Limited and Religare Insurance Advisory Limited which
deal in equity, commodity and financial services business.
Religare Securities Limited
RSL is one of the leading broking houses of India and are dealing into Equity Broking,
Depository Services, Portfolio Management Services, Institutional Equity Brokerage & Research,
Investment Banking and Corporate Finance.
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Extension of services has been a constant feature in Religare to regard the needs of our
clients. Consequently, company is soon going to launch Internet Trading and Merchant Banking.
This would take care of different investment needs of different classes of investors
To facilitate free and fare trading process Religare is a member of major financial
institutions like, National Stock Exchange of India, Bombay Stock Exchange of India, Depository
Participant with National Securities Depository Limited and Central Depository Services (I)
Limited, and a SEBI approved Portfolio Manager.
RSL serves a platform to all segments of investors to avail the opportunities offered by
investing in Indian equities either on their own or through managed funds in Portfolio Management.
ReligareCommoditiesLimited
Religare is a member of NCDEX and MCX and provides platform for trading in
commodities, which is an online facility also.
RCL provides platform to both agro and non-agro commodity traders to derive the actual
price of the commodity and also to trade and hedge actively in the growing commodity trading
market in India.
With this realisation, Religare Commodities is coming up with its branches at 42 mandi
locations. It is a flagship effort from our team which would be helpful in facilitating trade and
speculating price of commodities in future.
ReligareFinvest
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Religare Finvest Limited (RFL), a Non Banking Finance Company (NBFC) is aggressively
making a name in the financial services arena in India. In a fast paced, constantly changing dynamic
business environment, RFL has delivered the most competitive products and services.
RFL is primarily engaged in the business of providing finance against securities in the
secondary market. It also provides finance for application in Initial Public Offers to non-retail
clients in the primary market.
RFL is also planning to initiate personal loan portfolio as fund based activity and mutual
fund distribution as fee based activities.
Along with this, the company also undertakes non-fund based advisory operations in the
field of Corporate Financing in the nature of Credit Syndication which includes inter alia, bills
discounting, inter corporate deposit, working capital loan syndication, placement of private equity
and other structured products.
ReligareInsuranceAdvisoryLtd.
Religare has been taking care of financial services for long but there was a missing link.
Financial planning is incomplete without protective measure i.e. structured products to take care of
event of things that may go wrong.
Consequently, Religare is soon coming up with Religare Insurance Advisory Services
Limited. As composite insurance broker, we would deal in both insurance and reinsurance,
providing our clients risk transfer solutions on life and non-life sides.
This service will take benefit of Religares vast business empire spread throughout the
country -- providing our valued clients insurance services across India. We aim to have a wide
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reach with our services literally! Thats why we are catering the insurance requirements of both
retail and corporate segments with products of all the insurance companies on life and non-life side.
Still, there is more in store. We also cater individuals with a complete suite of insurance
solutions, both life and general to mitigate risks to life and assets through our existing network of
over 150 branches expected to reach 250 by the end of this year!
For corporate clients, we will be offering value based customised solutions to cover all risks
which their business is exposed to. Our clients will be supported by an operations team equipped
with the best of technology support.
Religare Insurance Advisory aims to provide neutral, transparent and professional risk
transfer advice to become the first choice of India.
Vision
Providing integrated financial care driven by the relationship of trust and confidence.
Mission
To be India's first Multinational providing complete financial services solution across the globe.
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Religare team is led by a very eminent Board of Directors who provide policy guidance and
work under the active leadership of its CEO & Managing Director and support of its Central
Guidance Team.
BoardOfDirectors
Following is the list of Directors of Religare Securities Limited
Chairman Mr. Harpal Singh
Managing Director Mr. Sunil Godhwani
Director Mr. Vinay Kumar Kaul
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Director Mr. Malvinder Mohan Singh
Director Mr. Shivinder Mohan Singh
PRODUCT PROFILE
RELIGARE DEMAT
Accountopening:
Opening a DP account with RELIGARE
You can open a Depository Participant (DP) account, through a Religare branch.
There is a fee of Rs. 250/- which is charged at the time of opening a Demat + trading
account.
All investors have to submit their proof of identity and proof of address along with the prescribed account
opening form.
1. A copy of PAN card: A document made compulsory by SEBI
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2. Proof of identity: You can submit a copy of Passport, Voters ID card, Driving license or
PAN card with photograph.
3. Proof of address: You can submit a copy of Passport, Voters ID card, Driving license, PAN
card with photograph, Ration card or Bank passbook as proof of address. You must
remember to take original documents to the DP for verification.
4. Passport-size photograph.
Dematerialization:
Dematerialization is the process by which a client can get physical certificates converted into electronic
balances maintained in his account with the DP.
Features:
Holdings in only those securities that are admitted for dematerialization by National
Securities Depository Ltd (NSDL) can be dematerialized.
Structure of holding in the securities should match with the account structure of the
depository account. Now shares in different order of names can also be dematted.
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If the shares are in the name of X and Y, the same cannot be dematerialized into the account
of either X or Y alone. However if the shares are in the name of X first and Y second, and
the account is in the name of Y first and X second, then these shares can be dematerialized
in this account.
Only those holdings that are registered in the name of the account holder can be
dematerialized. Physical shares which have not been transferred and are still there with a
transfer deed cannot be dematted. Only a few companies have been given the permission to
offer Transfer-cum-Demat. The list of these companies can be viewed here.
Rematerialization:
Rematerialization is the process by which a client can get his electronic holdings converted into
physical certificates. The client has to submit the dematerialization request to the DP with whom he has an
account along with a Remat request form. The physical shares will be posted by the company directly to the
clients.
Trades:
For all sales made by clients, the shares will have to be given to the broker, so that the Pay In can
be made by the broker to the stock exchange concerned. For that it's essential that the shares be transferred
to the account of the broker well before the deadline date.
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You must confirm with your broker the settlement date and settlement number and then submit your
instructions to your DP. Also it's important to give the instructions to your DP as early as possible.
Corporate benefits:
Corporate benefits are benefits given by a company to its investors. These may be either monetary benefits
like dividend, interest etc or non-monetary benefits like bonus, rights etc. NSDL facilitates distribution of
corporate benefits. It's important to mention your correct MICR No and attach copy of the cheque leaf with
your account opening form. NSDL is planning to distribute all cash corporate benefits to bank accounts
directly.
Schedule of charges for Depository services
PARTICULARS R-ALLY R-ACEAccount operations
- a/c opening
- annual charges
- Documentation
- One time charges
Nil
Rs. 250/-
Rs. 60/-
Nil
Nil
Nil
Nil
Rs. 299/- or Rs. 499/- or
Rs. 999/-Transaction charges
- buy
- sell
Nil
Rs. 25/- or 0.01% value
of securities whichever
Nil
Rs. 25/- or 0.01% value
of securities whichever
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is higher is higher
Pledge
- creation / closure Rs. 50/- or 0.01% value
of securities whichever
is higher
Rs. 50/- or 0.01% value
of securities whichever
is higher
Delivery Instruction
Booklet
Rs. 20/- per booklet Rs. 20/- per booklet
Dematerialization Rs. 2/- per certificate Rs. 2/- per certificate
Rematerialization Rs. 20/- per request +
courier charges.
Rs. 20/- per request +
courier charges.
Courier charges for
Demat / Remat
Rs. 30/- per request Rs. 30/- per request
What is a depository?
A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds and
units) of investors in electronic form. Besides holding securities, a depository also provides services related
to transactions in securities.
What are the benefits of depository system?
The benefits of participating in a depository are:
immediate transfer of securities;
no stamp duty on transfer of securities;
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elimination of risks associated with physical certificates such as bad delivery, fake securities
etc;
reduction in paperwork involved in transfer of securities;
reduction in transaction cost;
nomination facility;
change in address recorded with Depository Participant (DP) gets registered with all
companies in which investor holds securities electronically, eliminating the need to
correspond with each of them separately;
transmission of securities is done by DP, eliminating correspondence with companies;
convenient method of consolidation of portfolios/accounts;
Holding investments in equity and debt instruments in a single account.
What is a DP?
As an investor you open a securities account with a DP. DPs are attached to the depositories very much the
same way as commercial banks are attached to RBI. All interactions including account opening,
dematerialization, transactions, pledge etc are done through the DP.
How do I select a DP? Are all DPs the same?
You can select your DP to open a demat account just like you select a bank for opening a savings account.
Some of the important factors for selection of a DP can be:
Convenience: proximity to the office/residence, business hours.
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Comfort: reputation of the DP, past association, range of services etc. Find out if the DP is in a
position to give the specific service you may need.
Cost: the service charges levied by DP and the service standard.
What should I do when I want to open an account with a DP?
The process of opening an account with a DP is similar to the opening of a bank account. You can approach
any DP of your choice and fill up an account opening form. At the time of opening an account, you have to
sign an agreement with DP in a National Securities Depository Ltd (NSDL) prescribed standard agreement,
which details your rights and duties and those of your DP. All investors have to submit their proof of identity
and proof of address along with the prescribed account opening form.
Proof of identity: your signature and photograph must be authenticated by an existing demat
account holder with the same DP or by a bank manager. Alternatively, you can submit a copy of
Passport, Voters ID card, Driving license or PAN card with photograph.
Proof of address: you can submit a copy of Passport, Voters ID card, Driving license, PAN card
with photograph, Ration card or Bank passbook as proof of address. You must remember to take
original documents to the DP for verification.
Passport-size photograph.
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What is dematerialization?
The dematerialization system is an alternative to the physical existence of securities. In this system
securities are converted into the electronic form and deposited in a depository account in the investors
name.
In order to dematerialize certificates, an investor will have to first open an account with a DP and then
request for the dematerialization of certificates by filling up a Dematerialization Request Form (DRF), which
is available with the DP, and submitting the same along with the physical certificates. The investor has to
ensure that before the certificates are handed over to the DP for demat, they are defaced by marking
"Surrendered for Dematerialization" on the face of the certificates.
Can I dematerialized any share certificate?
You can dematerialize only those certificates that are already registered in your name and are in the list of
securities admitted for dematerialization at NSDL.
All the scrips included in S&P CNX Nifty and BSE Sensex have already joined NSDL. This list has more than
2,800 companies and is steadily growing.
Can my electronic holdings be converted back into certificates?
Yes. If you wish to get back your securities in physical form, all you have to do is to request your DP for
Rematerialisation of the same. "Rematerialisation" is the term used for converting electronic holdings back
into certificates. Your DP will forward your request to NSDL after verifying that you have the necessary
balances. NSDL in turn will intimate the registrar who will print the certificates and dispatch the same to you.
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What is the procedure for selling dematerialized securities?
The procedure for selling dematerialized securities in stock exchanges is similar to the procedure for selling
physical securities. Instead of delivering physical securities to the broker, you instruct your DP to debit your
account with the number of securities sold by you and credit your broker's clearing account. This delivery
instruction has to be given to your DP using the delivery instruction booklet received from the DP at the time
of opening the account. The procedure for selling securities is given here below:
Investor sells securities in any of the stock exchanges linked to NSDL through a broker.
Investor gives instruction to DP to debit his account and credit the broker's (clearing
member pool) account.
Before the pay-in day, investor's broker gives instruction to his DP for delivery to clearing
corporation.
The broker receives payment from the stock exchange (clearing corporation).
The investor receives payment from the broker for the sale in the same manner payment is
received for a sale in the physical mode.
How will I know that my DP has updated my account after each
transaction?
Your DP will give you a transaction statement periodically, which will give your current balances and the
various transactions you have done through the depository account. If you so desire, your DP may provide
the transaction statement at intervals shorter than the stipulated ones, probably at a cost.
Can I freeze my account?
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Yes. The depository system provides the facility to freeze the depository accounts for any debits or for both
debits and credits. In an account which is "freezed for debits", no debits will be permitted from the account,
till the time it is de-freezed. This is the additional security feature for the benefit of the investors.
COMPETATIVE ANALYSIS OF SECURITIES INDUSTRY
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Current Entry-barrier: In 1995-96 the entry barrier was effectively raised to Rs 10 crore of post
issue-listing. At one stroke this eliminated a lot of companies from accessing the public market.
How many have a Rs 10 crore capital - among those who have not already gone public during the
free-for-all till 1995? Not many. As the security industry is highly depends on capital market, so
entry barrier of the industry is also decreasing.
Factors that determine the threat of entry include capital requirements, economies of scale,
switching costs, and brand value and uncertainty about future.
Brand identity is important in the share broking sector, and benefits larger
firms. Major broking firms allocate considerable resources to marketing efforts.
Frequent introductions of new schemes and services and other incentives have
been successful in enticing investors or clients to trade with certain firms.
These factors can often be strong enough to cause a customer to choose one
firm over another -- even when the other firm offers a lower brokerage charge.
2. Availability of Substitutes:
The third factor affecting industry competition is the availability of substitutes.
The relative price of substitutes and the buyer propensity to substitute have
effects on the industry. Likely substitutes for investment in stock market are
bank deposit, post office deposits and investment through personal lending.
Although there is a high return in the capital market but there is high risk also.
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So if people are not interested in capital market then the share broking firm are
of no use.
The threat of substitutes has to do with time, money, personal preference, and
convenience in the share broking industry.
3. Competitive Rivalry:
The final factor is competitive rivalry. Intensely competitive industries
generally earn low returns because the cost of competition is high or buyers
are receiving the benefits of lower prices. Factors that affect competitive
rivalry include industry growth, fixed costs, brand identity, and barriers to exit.
The security industry is growing day by day. So the rivalry level of different
competitors in the industry is rapidly growing.
4.Bargaining power of supplier
The MEMBER may insist the CLIENT to deposit interest-free margin money as a
percentage of the price of securities proposed to be purchased, unless the
CLIENT already has an equivalent credit with the MEMBER.
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The MEMBER may insist the CLIENT to deposit interest-free margin money as a
percentage on the price of securities proposed to be sold, unless the MEMBER
has received from the CLIENT the securities in its pool account prior to such
sale or has received the securities with valid transfer documents to the
Members satisfaction prior to such sale.
The MEMBER is authorized to raise contract notes, debit notes etc. on the CLIENT and recover
any amount due from the CLIENT in connection with the regular business. The contract notes
issued by the MEMBER in the electronic form with digital signature is fully valid under the
SEBI /Exchange rules and is binding on the CLIENT and is valid mode of delivery of the same.
The MEMBER shall send the contract note in physical form or digital form to the CLIENT within
24 hours of the execution of the Clients transaction or at such interval as may be required by the
Exchange from time to time, via mail, email , fax, courier, Registered A.D, oral communication or
otherwise at the postal address, telephone/fax numbers or e-mail addresses intimated by the
CLIENT to the MEMBER. The CLIENT understands that it is his/her/its responsibility to review
the trade confirmation upon its first receipt. Any objection should be informed in writing within
twenty-four hours of such confirmation. In all cases, the MEMBER reserves the right to determine
the validity of the Clients objection to the transaction. The CLIENT agrees that the MEMBER
will not be responsible for the non-receipt of the trade confirmation due to any change in the
correspondence address/ telephone number or email address of the CLIENT, the CLIENT not
having intimated to the MEMBER. The MEMBER shall also send the Order/Trade confirmation
slip through e-mail to the CLIENT at his/her request, within (time period as specified by the
CLIENT) from the time of execution of order/ trade on the NEAT/CTCL system, as the case may
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be. The CLIENT agrees that the information sent by MEMBER by E-mail is deemed to be a valid
delivery of such information by the MEMBER.
The MEMBER may at its sole discretion prescribe the payment of margin in the
form of cash instead of securities. The CLIENT accepts to comply with the
Members requirement of payment of Margin, failing which the MEMBER may
sell, dispose, transfer or deal in any other manner the securities already placed
with it as Margin or square off all or some of the positions of the CLIENT as it
deems fit in its discretion without further reference to the CLIENT and any
resultant or associated losses that may occur due to such square off/sale shall
be borne by the CLIENT, and the MEMBER is hereby fully indemnified and held
harmless by the CLIENT in this behalf.
5. Bargaining power of buyer:
The CLIENT authorizes the MEMBER to set off a part or whole of the Margin i.e. by way of
appropriation of the relevant amount of cash or by sale or transfer or pledge of all or some
of the securities which form part of the margin, against any dues of the CLIENT or of a
member of the Family (hereinafter mean all the individuals, group companies, firms,
entities and other persons as specified by the CLIENT) in the event of the failure of the
CLIENT or a member of the Family of the CLIENT to meet any of their respective
obligations under these terms.
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.
SWOT Analysis
A SWOT analysis focuses on the internal and external environments, examining strengths and
weaknesses in the internal environment and opportunities and threats in the external
environment.
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STRENGTHS
Services
As a product Religare is a extremely innovative product with very less cost. Services likeonline trading facility, institutional and domestic broking, customized research reports with
almost 80% efficiency etc give Religare an edge over its competitors. Religare provides other
support services that make retail investors more confident and assured with their trading. SMS
alerts (allowing traders and investors to make the most of the available opportunities), Softer,
intangible features like imagery, equity driving preference. Through efficient trading processes
Investors can place their orders directly on the Internet, do all the information seeking and
basically own the investing process.
Relationship managers
The company has a team of relationship managers who are dedicated to the service of clients.
These RMs take care of clients even smallest problem and make efforts to solve them through
their expertise. They also help their clients to invest their wealth in the market.
Distribution Network
Religare with almost 150 branches beefed up by comprehensive online research, advice and
transaction services. In near future expect to make 200000+ retail customers being serviced through
centralized call centre / web solution.
Marketing
Religare (previously Fortis securities) is a veteran equities solutions company
with loads of experience in the Indian stock markets. Religare does not claim
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WEAKNESS
Customer Satisfaction
As far as customer satisfaction goes Religare has to tighten its Boots. The
company does not have enough Relationship managers to cater to huge
customer base. The account opening takes 2 working days whereas Indiabulls
takes half the time for this purpose.
Branding
Though the company has a efficient products but large part of investment
interested population does not know the company. The most basic expectation
for a trader or investor when one begins trading is that one must get timely
delivery of shares and proceeds from sale of shares. Also ones cash balances
with the broker must be safe and secure. Though this confidence in the broker
comes with time and experience, good and transparent practices also play a
major role in imbibing confidence in traders.
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Competition from banks and Niche Players
Most of the banks due to good branding have the faith of the customers of their
banking database. So they enjoy the liberty of huge database and customers
find it more reliable to trade there rather than with a unknown broker. Also
banks like HDFC Bank and ICICI Bank have the advantage of linking the trading
accounts of their customers to saving accounts. This makes trading easier, and
at the same time a trader withdraws exactly as much money from his account
as is needed to complete the trade. Similarly sales proceeds are credited
directly to saving account.
Niche players presence as sub brokers or Small broking house like Abhipra,
Way to wealth etc. attracts a good share of market and run parallel to giant
companies.
OPPORTUNITIES
The external environment analysis may reveal certain new opportunities for
profit and growth.
Ever-increasing market
After the NSE brought the screen based trading system stock markets are now
more secured which has attracted lot of retail investors and the demand is
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increasing day by day. This has resulted in improved liquidity and heavy
volumes on transactions. Religare is one of the early entrants here. As to how
much it will roar and how swift it can swoop on the market, the future alone
can answer such queries. Religare has been a mega player and is known for
being a mover of stocks. It is also known for putting big deals through and
enjoys good networking with the FIIs. It has been dynamic enough to move
with the times and capture the opportunities that the market throws up from
time to time.
Improving Technology
In country like India technology is always improving which gives the company
a chance to keep on improving their product with time whereas for the small
players like local brokers it will be difficult to keep the same pace as the
changing technology. Also with SEBI lying down some strict guidelines small
brokers are finding it harder to retain the customers with no research
department and small capital. The traditional business model is highly
dependent on a large network of sub-brokers, and many established players
may not have systems (technology, customer service, etc.) capable of directly
servicing so many retail customers.
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Unfulfilled needs of the customers
With so many competitors offering their products in the market but no one is
able to completely satisfy the customers. Some have the problem of lack of
information or some were scared of volatility of the stock markets. Religare
has the opportunity to tap this unsatisfied set of customers and to make hold
in the market. The Internet serves to break all barriers to information, as it
offers an extremely hassle-free investing platform. And, Religare hopes to fully
utilize and capitalize on this platform. This original idea by Religare itself was
born out of the consumer's need for a more transparent, easy to understand
and convenient option of investing in stocks.
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Education Level
The education level in the country is improving year after year as far as
technology goes. With that the understanding of the stock market is also
increasing and a lot of retail investors are steeping in the markets which is
being shown by increasing volumes, transactions and indices.
THREATS
New Competitors
A lot of new competitors are trying to enter the market in this bullish run to
taste the flavor of this cherry. This is creating a lot of competition for large
players like Religare and it is creating little confusion in the minds of the
customers about the services provided by the broker. Also many banking firms
are entering into the market with huge investment. Competitors like ICICI,
kotak, hdfc, 5-paisa etc. are posing a lot of threats to the company.
Technology based business
Online trading is totally based on the technology which is quite complex.
Typically, the technology solution has to start from the Internet front-end (or
the screen that you see when you begin trading). Then it needs to get into the
'middle tier' of risk management systems that assess data from banks and
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depository participants (DP), calculate client risk at that point in time, and give
the 'Go/No go' advice to the trade. So technology is a kind of threat because
unless until it is working properly it is good but internet is not that safe. Though
a lot of cyber laws are being made but not yet executed.
Switch over cost
The cost of switching over from one company to other is minimal therefore the company cant even
stop for breathing i.e. it has to provide quality service all the time to its clients.
Customer Relationship Management & Sales
Customer Relationship Management (CRM) is a well known business concept. Managers today are
working hard to build and maintain a relationship with the customer - given the importance of
customer lifetime value. While the concepts of CRM and Customer Lifetime value are well
established and understood by managers, managing customer relationships has become a challenge
for many managers. Several firms have implemented dedicated software tools (Seibel,
salesforce.com etc.) for customer relationship management, and even more number of companies
are planning to do the same. Few firms have even created offices of customer relationship
management: Client partners, Account managers, Program Managers etc. In spite of all these
efforts, managers are finding it hard to manage customer relationships.
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The challenge of managing customer relationships led to a new concept called Levels of Customer
Relationships developed by INSEAD, France. The central theme of this concept is:
Customer relationship is an evolutionary process that can be identified as 6 distinct
stages.
Customers have different needs and expectations during different stages of this
relationship.
Customer relationship is a dynamic process and can move from one stage to another
based on customer's aspirations and customer's buying experience
I will briefly describe the levels of customer relationships and its impact to the
vendor firm.
Why do customers have a relationship with the vendor?
Every salesman knows that customer often wishes to have a relationship with
the vendor. Many firms therefore want to make use of this relationship and
have instituted customer loyalty programs - aimed at rewarding loyal
customers. For example, Airlines have free miles program, credit card firms
have points program, Grocery stores have a special discount for loyalty card
holders etc.
Looking from the customer's perspective, customer expresses a need for a
relationship with the vendor for a few basic reasons: satisfy their needs,
convenience, reliability, lower cost of transaction. Customers need products or
services and will obtain them, but they are willing to enter into a relationship
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with the seller to make the process of buying easier and a more pleasant
experience.
One has to note that the intensity or depth of the relationship which the
customer expresses to have with the vendor depends in the intensity of his/her
needs. If a product/service is vital to the customer e.g. financial product,
then customer is willing to have a deeper relationship in order to have their needs
satisfied as precisely as possible. On the other hand if the customer wants a
routine service or generic product e.g. customer needs tips from his
broker while trading in the stock market , then the relationship is
superficial - characterized by buyer's convenience. To understand this
considers the following examples:
1. Customer, who is a telecom service provider, wants to implement a ERP software.
Since the software has to be customized for the Telco, the customer is willing to establish a
deep relationship with the vendor by having a development & maintenance contract with
the vendor.
2. Customer, who wants a copy of MS Project installed in a computer. Since this is a
simple purchase, the customer wants to buy it from a near by store and install it himself.
Thus there is no real relationship between the customer and the vendor.
Both examples point to the fact that the level of relationship a vendor enjoys
with the customer is directly dependent on the criticality or importance of
customer's needs. In short, customers enter into a relationship with the vendor
in order to serve their own needs.
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Strengthening Customer Relationships
We now understand that the depth of the relationship between vendor and
customer is directly dependent on the intensity of the customer's needs. Also
note that the depth of relationship is defined by the customer. This creates a
challenge for a salesman or a marketer at the vendor firm. For a vendor to
increase sales, the vendor firm must improve the relationship with the buyer.
And to improve the relationship, vendor must know the current level/stage of
relationship he has with the customer. So the first step in managing customer
relationship is to know and understand the levels of customer relationships.
Levels of Customer Relationships
As mentioned earlier, relationship between buyer and seller can be identified in
6 distinct levels. Level-1 being the lowest level of relationship and level-6 being
the deepest level of relationship.
Level-1: Utility Need
Level-2: Convenience Need
Level-3: Comfort Need
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Level-4: Personal Recognition Need
Level-5: Self-expression Need
Level-6: CO-Creation Need
From a marketing perspective, the customer lifetime value is lowest at level-1
and is highest at level-6. This is also reflected in the revenue or sales from a
customer. Customer, with whom a company enjoys the highest level of
relationship, will also be the most profitable customer. It is therefore in the
vendor's best interest to have very deep relationship with the customer.
Level-1: Utility Need
This is the most basic interaction between customer and vendor. Here the
customer desires to buy a particular product/service. Customer interacts with
the seller with the sole aim of acquiring the product/service. The relationship
between the firm and the customer is characterized by efficiency in
transactions, straight forward, no-frills selling. To increase sales, vendor must
work on availability of the product/service. Customer will buy only if a
product/service appeals to the rational side of the customer i.e. Price and
convenience. Customer does not bond with the vendor as the relationship is a
purely utilitarian one - exchange of goods/service for money.
The vendor should respond to the customer (in this level of relationship) by
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providing the required goods/service, and refrain from interacting at a deeper
level i.e., by not offering added products/service - other than those requested
by the customer. If the vendor insists or attempts to force a relationship to a
higher level, the customer may "pull-out" thus risking future sales.
To understand this, consider this example: If someone purchased a laptop from
DELL Computers. He placed an order online - for a particular configuration. His
expectation from the vendor is that Dell will deliver the computer on stated
delivery date. He is buying from Dell to meet by needs at a price which is
attractive for him. If the salesman at Dell attempts to push additional hardware
or software - which is not what he wanted, he might get annoyed and cancel
the order.
Vendors must first identify the level of relationship the customer has with
them, and then craft a strategy to deepen it. In this case, a vendor can
deepen the relationship by increasing the number of interactions. This
can be done by: Offering a wide range of products/service, having a 24/7 sales
operations - i.e., Internet or all 24 hour shops.
For example, Dell can increase the number of customer interactions by offering
a full range of computer accessories: Printers, Scanners, cartridges, office
software, computer games etc. Dell can increase the number of customer
interactions by offering value added services such as on-site maintenance, free
software updates etc.
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Utilitarian relationships can be deepened by augmenting the basic
service/goods with a value addition: Cross selling or value addition.
Level-2: Convenience Need
Once the customer has easy access to service/goods that they need,
customers look for ease of purchase process. This denotes a second level of
relationship. The vendor should respond by providing services that simplify the
buying process i.e., identify and eliminate those procedures that are a
hindrance to obtaining a product/service. For example, having a shorter
checkout lines in a store, having the products courier & providing the tracking
number to the customer, having a service personal ready to attend the
customer when the customer enters the bank/hotel/office etc.
To improve the buying process, the vendor must understand thoroughly the
entire customer purchase experience and then eliminate the nagging problems
in the purchase process. Service companies often resort to mystery shoppers -
who act as customers and buy the product/service to measure & improve the
buying experience. Often times, managers listen to feedback from front-line
employees for suggestions to improve the customer's buying experience.
For example, Dell provides the exact shipment details of the computer and is
delivered on the specified time. In addition, Dell has a complete e-Commerce
website which enables a secure and easy payment method. Airlines provide
comfortable lounges at the airport - while customers wait for their flight.
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Airlines also provide e-ticketing, curb side luggage check in, on-line flight
details etc., to make customers feel comfortable during the purchase process.
Often times, there are several instances of customers abandoning their
purchase process in the midway. This is the sure sign of an inefficient and
inconvenient buying process
Relationships at this level can in strengthened by widening the service
interactions with customers. By this I mean, look at the ways the customer
buys your product/service and then provide additional services to make it
simpler and easier for the customer. Customer Activity Mapping (CAM) &
Customer Decision Mapping (CDM) are the tools that can be used to analyze
the decision making, buying, using, and consumption experience. And in each
stage, the objective of the vendor is to identify situations that pose obstacles
to the buying process.
Making the buying process as pleasurable as possible, a vendor can strengthen
relationship with the customer in this level and also take the relationship to the
next level.
Level-3: Comfort Need
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Once the customer has a convenient buying process, then they wish to have a
"pleasant shopping experience" i.e., the customer seeks a buying interaction
where he feels comfortable. This implies that the vendor should foster a buying
environment in which customer feels comfortable and is characterized by an
agreeable and relaxing purchase ambiance.
For example, many multi-million dollar business deals are done at resorts -
away from the clutter of the office environment. BASF, a fortune-100 chemical
company often conducts the contract negotiations on a luxury yacht. This
provides the right ambiance and mood to put the customer at ease and feel
comfortable during the buying process.
Irony of this "comfort need" is that customers often overlook the comfort factor
- and often customer notices the absence of the comfort. A discomfort during
the buying experience is easily noticed and registered, while comforts are
forgotten by customer.
CRM efforts in this level must be focused on making the customer feel
comfortable; create a feel-at-ease feeling. The marketer should strive to
provide customers comfort, fun, surprise, and other means of generating a
positive feeling. Note that this is distinctly different than relationship building
at level-2, where the focus was to remove any factor which caused
inconvenience to the customer.
Relationship is built on a feeling of ease and comfort can be strengthened by
providing more of the same - greater comfort, fun and pleasant interaction
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environment. This involves training the front-end employees to provide a
comfortable experience to the customer and being sensitive and responsive to
the customer's level of interaction. The marketing efforts must be directed at
improving/building the memory of pleasant experiences of the customer.
Level-4: Personal Recognition Need
Often times, regular/loyal customers expect the vendor to interact in a way
that his/her personal choices are recognized. This implies that the customer is
seeking a level of relationship where they expect the vendor to recognize their
needs - without them asking for it.
At this level, the loyalty of customer has been well established; customer
enjoys the convenience and a feeling of comfort. Here, in this level of
relationship, the customer needs are "personal". In earlier levels, the needs
were mostly contextual, i.e., based on the context of buying experience.
CRM efforts at this level are to personalize the service/product offerings. For
example, financial institutions treat their high value customers with
personalized checkbooks, providing a personal financial advisor, etc. In
business-to-business environment, this is characterized by having a dedicated
relationship manager who interacts with the client, who knows the clients exact
needs and has the authority to deliver the customer's needs. The "relationship
manager" or "client partner" can also make suggestions; provide consulting
advice to the customer - Along with dinners/lunches, tickets to popular events
etc.
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Advent of Internet has created opportunities for vendors to provide customized
web interfaces to each of their clients. Amazon.com, ebay.com etc. Provide
customers with customizable web interfaces.
To bring a customer to this deep level of relationship, the level-3 relationship of
making the customer feel comfortable must always be accomplished. Only
when the customer is comfortable, vendor can discover (discreetly) the personal needs of
the customer - and then move the relationship to the next higher level.
Relationship at Level-4 is analogous to that of a romantic partner - but not a
spouse or fianc. The relationship at this level is more personal - but without
invading the privacy of the customer. The timing therefore needs to be right -
so that any potential tensions or conflicts are avoided or reduced to minimum.
The company must know the customer details, possible tastes and preferences
sufficiently well to build the relationship. Interactions must be respectful as
exchange of personal information may be perceived as invasive.
The irony of the CRM systems at this level is that customer feels that the CRM
systems compromise customer's privacy - and for that reason most customers
are reluctant to share personal information with the vendor, which in turn
cause most CRM implementations fail. A salesman or marketer or account
manager must therefore take extra precaution not to reveal any personal
information of the customer to the CRM database system. This personal
information must be carried in the mind of the vendor salesmen.
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Customer's need for personal recognition may be met by very simple acts by
the salesman, such as rewards for customer loyalty (given to the customer -
i.e., buying agent or the key decision maker), tailor made products, and words
of appreciation.
Level-5: Self-Expression Need
Once the customer feels that the vendor recognizes him/her as person and can
associate personally with the vendor, the customer is ready for the next level
of relationship - that is of Self-expression. Customers who are in this level of
relationship expect the vendor to focus on customizing and personalizing the
product/service offerings. The customer expects the vendor to have a clear understanding of
their needs and the vendor should be able to meet them. The relationship is
characterized by mutual trust, confidence & respect.
For example, Dell Computers being a customer of Intel, expects Intel to know its
needs for latest and most powerful microprocessors for the Christmas season.
The customer then expects Intel (vendor) to announce and supply the latest
processors in time so that Dell can ship the computers to its customers in time
for Christmas.
In a consumer world, a common example will be that of a (famous) client and
his/her fashion designer. The client expects the fashion designer to know
his/her tastes and provide clothes accordingly.
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It must be noted that in a B2B world, customers are more rational. Their
business needs drives the relationship and is partly independent of personal
factors. As a result, vendor can build this relationship by learning the customer
needs. Based on these learning/insights, vendor should be able to offer highly
customized and personalized offerings.
Customer relationships in levels 1-4 are defined by customer's experience and
is therefore heavily dependent to the external environment (i.e., external to
the customer). At levels 5 and above the relationship depends on internal and
external factors including rational and emotional considerations.
The key for success in building relationship at this level is to understand the
customer's implicit needs - i.e., those needs which are not expressed verbally.
Vendor can strengthen the relationship by understanding the customer's
implicit needs and focusing on different ways to customize and personalize the
offerings. In a B2B setting, this involves understanding the customer's business
operations, business models and then providing customized solutions: Like
releasing products in time for Christmas or having goods packed in a truck in a
manner it is efficient for customer etc.
Level-6: Co-Creation Need
This denotes the highest level of customer relationship. At this level, customer
is very comfortable dealing with the vendor; the relationship is characterized
by a sense of collaboration. The customer feels a need for a unique
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product/service and is willing to work with the vendor to develop the
product/service. Often the idea of co-creation is initiated by the customer to
the surprise of the vendor.
Co-creation relationships are personal and rational. At this level of relationship,
the customer loyalty & trust is very high. Customers are willing to invest for
joint development of products/service. Customer feel closely bonded to the
vendor - to the point that the customer seeks a joint destiny with the vendor.
I.e., some aspects of customer's interests merge with that of the vendor's
interests.
Co-Creation denotes the highest level of customer relationships. This
relationship can be strengthened by broadening interactions which involve co-
creation of products/services.
Business Implications
Understanding the existing customer relationship levels has a huge impact on
the future sales. The first step is to understand the level of existing relationship
and then look at means of improving the levels of customer relationship. With
every increase in level of relationship, the pay off in terms of additional sales in
immense. One can only estimate what the value of the increased sales. The
increase can range from 2x to 100x or even 1000x!
In most of today's CRM implementations and its supporting policy - are based
on revenue generated by customer. The customer's are classified according to
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It's often said that it can cost up to seven times more to acquire one new
customer than to retain an existing one. But in the financial industry, the costs
reach a whole new level: acquiring one new customer can exceed US$350. As a
rule, of these 20% will be very profitable, 20% will cost money to retain, and
the middle 60% will pay for themselves while generating marginal revenue,
according to Harvard Business Review.
With statistics like these, a customer engagement and retention plan based on
extensive data collection and analysis is imperative for the long-term health of
companies in the financial industry.
Financial institutions must find a way to retain profitable customers, turn
marginally unprofitable customers profitable, and reduce the marketing budget
spent on the most costly customers. However, before firms can address these
issues and take action they must closely monitor customer behaviour to
develop insights that allow them to target the right customer segment with a
relevant, compelling offer at a time when the customer is most open to
receiving the message.
To determine which customers to keep, which to try to move to a profitable
customer segment, and which to let go, financial institutions must now turn to
new marketing strategies.
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New rules for relationships
There are new customer relationship rules for the financial industry:
1. Identify customer segments and define how you interact with each.
2. Communicate only relevant, compelling offers.
3. Adopt comprehensive customer relationship solutions.
Relationships mean profit
Financial firms that incorporate these rules are the most likely to deepen their relationships with
customers, and ultimately to increase the value and revenue reaped from their full spectrum of
customers.
To increase customer loyalty, financial industry firms need to constantly
monitor their customer portfolio and actively mange their marketing efforts
based on the changing behavior of their customers.
ADVISOR MUST WORK AS ADVOCATE
Theres a difference between a sales rep and an advisor, You must become the
person who, as soon as a money matter comes up, your name flashes in the client's
head.
An investment advisor should be an advocate for the client that means the
advisor must not only understand the client's goals, but also have the freedom
to choose the products and strategies that meet the client's needs. If an
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investment manager is relying on commissions, or only offers a fixed number
of products, it's the client who suffers. That's what I set out to change.
We need to be clear about what our services are and what we charge for them.
Here are some of the areas where financial planners add value:
Choice
Financial planners research the world of financial products and service
providers to come up with a short-list, and recommendations, of the best
possible options for each client. In the investment arena, the choice of funds,
fund managers, products, platforms, tax vehicles and fee structures has
multiplied exponentially. Risk cover is now available with lots of benefit options
as well as costing structures, guarantee periods and discount/rebate options.
Information
The amount of information available to the average client on investments,
markets and insurance is extensive. If you read all the research available today
on international markets, it would be out of date by the time you got to it.
The press also supplies a lot of information, which can be confusing. While
some of the reporting is helpful and informative, a lot of it is distracting.
Headlines like markets soar on weaker rand to markets plummet on news of
interest rates give a sense of success and disaster, but in fact refer only to
daily volatility, which will have little impact in the long term. Financial planners
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cut through this noise for clients with a view to developing and adjusting
personal financial strategies.
Compliance
Clients today are more demanding in terms of the level of technical
competence they require. The re-structuring of costs and commissions as well
as the implementation of the Financial Advisors and Intermediary Services Act
is evidence of this. Advice needs to be clear, objective and appropriate with
evidence of a systematic, effective process.
Financial planners need to keep tabs on new laws and developments so they
can adapt personal financial plans for clients where necessary. With the
massive shift in our world in which employers have effectively washed their
hands of the responsibility of ensuring employees financial stability in
retirement, its more important than ever to help clients achieve the goal of
financial independence.
In the days of defined benefit funds and jobs for life, most of a clients financial
provision and protection was through a pension fund. Clients are increasingly
called on to make far-reaching decisions about their retirement capital and risk
cover provision.
The Human Factor
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We are all emotional about our future and therefore about our cash, which has
a significant influence on our future. While emotions can be a positive force,
they can also be destructive.
Continuity
A good financial planner should put in place a plan and have systems in place
that ensure the clients plan will not run off course without the financial
planner. The planning practice should operate in such a way that plans are not
dependent on personalities.
A practice should be well-funded and well-managed, with a transparent yet
confidential process that can be applied by all financial planners in the
business. Advice should be consistent and based on a set of values that
focuses on client outcomes.
Independence
There is no doubt the cost of providing advice has increased significantly. Costs
include professional indemnity insurance, compliance services, risk analysis
and client management software, not to mention staff, training, IT and other
operational overheads. The client expects independence from financial
planners and impartial advice.
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Values
A Managing finance requires a clinical approach, but the element of pro-active
caring still needs to be there. Financial planners need to have the right
qualifications and ongoing training to ensure they keep up-to-date with
developments but they also need to have empathy with their clients.
As financial planners we need to be able to read the situation correctly,
whether there are technical or emotional factors to take into account. This way
we can create a certain future for our clients and meet their needs in an
environment where markets and investment products are in a state of flux
YOUR CLIENTS CAN GET FINANCIAL INFORMATION FROM MANY PLACES: THE MEDIA,
THE INTERNET, FAMILY MEMBERS AND OTHER ADVISORS. WHAT SETS YOU APART?
As I have put some standards to manage clients portfolio as per their age, risk
& return:
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IDEAL INVESTMENT RATIO
The ratio of the investment change as per the age group this is mostly
suggested to people aged between 35-45 if the age decreases ratio of equity
must increase which gives high return on high risk whereas if the age increases
the ratio of the secured returns increases which give low return on low risk but
a certain amount of return is fix.
And if the person needs high return with lower risk as he is in age of around 40
yrs than he is suggested to invest in mutual funds.
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INSURANCE
TaxPlan
FINANCIAL HOME
GuaranteedReturns
MFMF Trading
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ThePower of Great Service
EXCELLENT CUSTOMER SERVICE IS THE UNDERPINNING OF ANY SUCCESSFUL
ENTERPRISE
As consumers, we can choose where we spend our hard-earned money; why
spend it where the service is poor or unreliable? Only one thing comes to my
mind the importance of quality service.
We all know that quality service is rare, and to make that point , put yourself in
your clients' shoes and give yourself the same test . How would your clients
respond? If asked to relate a quality service experience, would your clients cite
you as an example?
But all too often service performance simply does not meet client expectations.
Even if your lapses are unintentional, a gnawing "satisfaction gap" can develop
between what you actually deliver and what clients expect. In new client
relationships, this gap starts to erode feelings of goodwill; longer-term clients
begin to wonder whether they would get more for their commissions and fees
from another advisor.
First close the satisfaction gap and create a working foundation on which to
build trust and confidence is to align client and advisor expectations of quality
service.
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"Customer retention should be the first line of defense in a financial services
provider's CRM strategy," said Kim Collins, research director at GartnerG2
CUSTOMER RETENTION IS A MULTI-DIMENSIONAL ISSUE:
Customer retention may not be sexy, but it certainly can be profitable, says former
McKinsey consultant Naras Eechambadi
Customer management is not rocket science. It is pretty basic business common sense. There are
three primary elements to it. Acquire, grow and retain customers. Of these three elements, the
first two capture most of the attention and mind share of the majority of marketers as well as senior
executives in many companies. In this month I want to focus on the third, often neglected, area of
customer retention.
Increasing the rate at which a company retains customers can be a great value driver, i.e. it
increases profits disproportionate to the amount spent. If that is the case, why then is it the most
neglected of the three basic areas of customer management? The answer has to do with three issues.
Measurement, ownership and visibility. The three are inter-related, but let us discuss them one by
one and then talk about how your company could benefit from an increased focus on customer
retention.
At first blush, retention seems like a pretty simple thing to measure. Can't you just see how many
active customers you have this month v / s last month or last year and deduct newly acquired
customers to measure how many customers you have retained? Sometime the answer is yes, but,
unfortunately, it is often not that simple.
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Depending on the kind of business you are in, it can be hard to even define a customer let alone
counting how many you have now or have had over time. The definition of a customer starts with
defining what kind of entity a customer is. Is it a person, a family or a household (people living
under one roof, who are related but not all members of the same nuclear family)?
We have had clients who have put in very sophisticated software tools to scrub their customer data,
remove duplicates and household their customers together only to find that their customer counts
went down and they were too scared to report that to upper management! "How do I explain to the
CEO that after spending a lot of money on cleaning our customer data, we now have fewer
customers?" This is a case where the truth does not necessarily set you free, but lands you in a
quandary. Of course, accurate data eventually leads to better decisions, but eventually may be
longer time frame than you care to think about.
Once you have defined a customer, the next problem is defining the term "active". This is relatively
easy for companies that are selling some kind of subscription service, like a broker house, cellular
phone company, magazine or cable. However, when you have a product that has a variable
purchase cycle, i.e. fast moving consumer goods, where customers can switch back and forth or
subscribe to various levels of service, e.g. in stock brokerage services where a person can have a
trading account but dont trade for several months, you need to establish thresholds which define
"active". The establishment of these thresholds can itself become a political hot potato, especially
when marketing or product groups have their incentive compensation tied to these numbers.
Ownership and accountability can also be an issue in some organizations, especially multi-product
organizations with competing brands or products. Who owns the customer? Who owns the
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How do you isolate the impact of your actions from these natural factors outside of your control? A
simple way is to establish benchmarks based on historical performance, but this can be difficult in
fast changing markets. The best way is through the establishment of control groups within existing
customer segments, so that you can track truly voluntary attrition. The topic of how you set up
statistically significant control groups, however, beyond the scope of this month's column.
Why bother with customer retention? Increasing customer retention may well be one of the most
effective ways to increase profits, and it can be done relatively quickly and with long lasting
impact.
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What drives Customer Retention?
There are four fundamental drivers of customer retention:
1. Improving Customer Loyalty
2. Preventing Customer Loss
3. Lowering Overall Costs
4. Increasing Total Revenue
Now the drivers have been identified lets examine how they can be affected
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Improving Customer Loyalty
Firstly, there is customer loyalty. Improvement in loyalty can equate to
significant increases in profitability as customers stay longer with your
company and it becomes more difficult for your competitors to lure them away.
Customer loyalty is driven mainly by a combination of delighting your
customers, educating them, having effective complaint resolution and high
service quality.
From a company perspective, this means that you need to deliver on your
promises and constantly try to delight your customers. Exceeding customers
expectations and occasionally rewarding them for their continued patronage
can do this.
Regarding complaints resolution, complaints and negative customer feedback need to be followed
up with the customer and the issues resolved to the customers satisfaction. It is common to hear of
the same customer issues occurring without a company taking action to resolve the problem or fix
the source of the complaint
Loss Prevention
Loss prevention is a critical element that is driven by attrition management
and wins back success. Attrition management entails anticipating when
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customers are likely to defect and managing proactive initiatives to stop the
defection. This has a direct impact on preventing revenue loss.
Alternatively, win back is the process of retaining a customer that has stated
that they no longer want your product or service. Implemented correctly this
can be an excellent way to prevent revenue loss. However, it needs to be
implemented carefully; with a full knowledge of the customers profit to the
business and the costs of the save offer. Otherwise, you can spend more
saving a customer than they will inject into in future profits.
Cost Reduction
On cost reduction, managing customer touch points effectively is a key way to minimize the costs
to service and communicate with your customers. Managing touch points is the process of
examining the media and timing of customer contact to optimize it for impact and cost.
Organizations that successfully manage touch points know when and how to contact their
customers so that they maximize each contact opportunity. As a result money is not wasted on
unnecessary contacts and the lowest cost applicable media is used.
Increase Revenue
Finally, there are the drivers that increase revenue. These are up sell and cross
sell. When customers are encouraged to take up more products through cross
sell, or upgrade their current product plans, revenue from these customers will
increase.
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2. Preliminary information Gathering
3. Data collection
4. Data analysis
SAMPLE SIZE
A sample size of about 200 respondents was taken into consideration on
the basis of different brokerage house all over Delhi and NCR regions.
Respondents included from all over Delhi and NCR regions.
FIELDWORK
Fieldwork plays an important role in collecting the data. Some important points which were kept in
mind while doing the fieldwork. -
To make the respondents comfortable before questioning them and ensuring the respondent
that all information collected is only for academic purpose and will be kept confidential
Ensure that the filled questionnaire will not be disclosed.
Not to lead a person into any preconceived notion
Not to influence the respondents answers in any way/form.
Use simple language, so that the technical language does not intimidate the respondent.
QUESTIONNAIRE DESIGN
The questionnaire method has come to the more widely used and economical means of data
collection. A set of closed ended questions was prepared and was presented in front of the
respondents to get it filled.
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ANALYSIS
1. In which professions are you engaged in?
81
67
1823
11
0
10
20
30
40
50
60
70
80
90
1
professions
BUSINESS
SERVICE
PROFESSIONAL
ENTREPRENEURS
OTHERS
As this was a focused group survey & mostly I got questionnaires filled from brokerage houses
where clients sit on the terminal & trade in the stocks. As the data collected shows that people who
mostly invest in the market are businessmen & service class person who dont have enough time to
keep continuous watch on the market fluctuation so they need regular assistance from their
relationship manager who is assigned to them so every company is suggested to enforce their
relationship managers to stay in contact with their clients.
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2. Do you trade in stock market?
YES
NO
0
20
40
60
80
100
120
140
160
180
1
As it was a focused group survey which I have done only in the brokerage house but even there are
some NO in this survey because many time clients may be with his friend who dont trade in the
market & that friend might be interested or not do the relationship manager in that brokerage firm
must take some extra care for them so because o his service friend of the client might be persuaded
to trade in the market.
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3. Would you like to trade in market
YES
NO
0
20
40
60
80
100
120
140
160
180
200
Here difference is because of the presence of the friend of client in the brokerage house who
doesnt want to trade in the stock market because he might be afraid of losses or due to lack of
resources.
As if that person who has lack of resources might be time or money. Solution to these problems are
present as for lack of money brokers have a option of funding or exposure in which brokers provide
predefined multiple of margin money to the client to trade in the market which depends on the type
of stocks & amount of socks.
But if that friend has lack of time than the relationship manager has to give a proper assistance &
dedication to that person so that friend can make himself to trade in the stocks.
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4. What extra services do you expect from you
broker?
4%8%
10%
28%
20%
30%
DEPOSITORY
SERVICES
MARGIN FINANCING
PORTFOLIO MGMT
SYS
TRADING
RESEARCH &
TECHNICAL SERVICES
ALL ABOVE
As this was a multiple answer question I got some idea of expectations of clients from his brokers
as his expectations changes as per his needs
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5. Which mode of trading do you prefer?
ONLINE
OFFLINE
0
20
40
60
80
100
120
140
1
As technology increases most of the people have less time to spent on the other activities than their
core business so most of the clients prefer online trading so they can put their bids whenever they
want as 24*7. In the case of online trading clients are not need to be provided any kind of assistance
from their relationship manager but if the dedicated relationship manager provide them a good
assistance can put that relationship manager & that organization apart from their competitors.
But even after the presence of internet some people like to trade through offline mode reasons
might be lack of knowledge or cost sensitive as offline product is used to being at lower cost so
here in offline that dedicated relationship manager has to be in contact with his client.
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6. What has been your investment experience in
stocks?
EXCELLENT
7%
GOOD
66%
AVERAGE
21%
POOR
6%
EXCELLENT
GOOD
AVERAGE
POOR
As I have mentioned earlier that this is the focused group survey I also interviewed the client I met
they said we are very much satisfied from our broker thats we are still dealing through them. Only
in one case they were ready to change when the broker if they feel unsatisfied or they are offered to
charge less brokerage as religare is charging.
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7. What do u look for when you are going to inve
in the stock market?
LOW RISK
LOW RETURN
MEDIUM RISK
MEDIUM
RETURN
HIGH RISK
HIGH RETURN
0
20
40
60
80
100
120
140
Most of the people look for moderate return because of presence of risk well as the age group
changes the risk-taking factor as age increase people started investing in bonds where a fixed return
is possible
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8. How often do you trade in the stock market
DAILY
54%
WEEKLY
13%
MONTHLY
11%
ON A SPECIA
NEWS
22%DAILY
WEEKLY
MONTHLY
ON A SPECIAL NEWS
Mostly people whom I found in the brokerage house were daily investor which are called jobbers in
& people like to invest in the stock when the got some good news like collaboration of a company
with other renowned company. And also if there any IPO is coming in the market like RPL came
during my training time
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42
51
40
65
69
71
68
63
62
21
17
23
4
6
4
0%
20%
40%
60%
80%
100%
POOR AVERAGE GOOD EXCELLENT CAN'T SAY
9. How would rate the services provided by your broker
CORE SERVICES FACILITATORY SERVICES ADVISORY SERVICES
As the data shows most of the people were satisfied with their brokers because they are giving them
profits on their investment & they were ready to pay more to their brokers if they get some extra
services as many of the ICICI client denied to shift their account to religare when we contacted
them to open their account with religare.
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RECOMMENDATION
The company should train RMs to be fully dedicated to clients services, as one of the
major factors, which clients expect from the company, is assistance from their RMs.
The RM should provide proper consultancy to those clients who trade in the market on a
special news so they can be persuaded to trade on normal days also.
The broker should provide the current information in stock market as their main problem
was that they are not getting information on time.
24*7 service should be provided in offline products also.
Quality of service has been rated highly important by all demographic factors as a reason for
brokerage firms.
The RM should also suggest his client portfolio management so he can reduce his risk & can
maintain a balance I the investment which he has done so far.
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BIBLIOGRAPHY
There was immense need and flow of the information while conducting the analysis as well
as while writing the thesis report, which was gathered through various sources mentioned below:
Websites:
www. relegare.in
www.bseindia.com
www.icicidirect.com
www.kotak.com
www.google.com
www.sebi.com
www.economictimes.com
Reference books
Marketing research - R.L. Gupta
http://www.citi.com/http://www.citi.com/http://www.citi.com/http://www.citi.com/http://www.google.com/http://www.economictimes.com/http://www.citi.com/http://www.google.com/http://www.economictimes.com/8/14/2019 Religare Cust[1]. Satisfaction
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ANNEXURE
QUESTIONNARE
1. In which professions are you engaged in?
Business Service Professional
Entrepreneur Others
2. Do you trade in stock market?
Yes No
3. Would you like to trade in market?
Yes No
If not, why_____________________________________________
4. What extra services do you expect from your broker?
a) Depository services
b) Margin financing
c) Portfolio management services
d) Trading
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e) Research and Technical services
f) All of the above
5. Which mode of trading do you prefer?
Online trading Offline trading
If online which terminal are you using_________________________
What are the charges paid for using the online services?
______________________________________________________
6. What has been your investment experience in stocks?
Excellent Good
Average Bad
7. What do u look for when you are going to invest in the stock market?
Low risk low return
Medium risk medium return
High risk high returns
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8. How often do you trade in the stock market?
Daily once in a week
Once in a month on special news
9. How would rate the services provided by your broker?
Sl. No. Services Provided Poor Average Good Excellent Cant say
1. Core Services
2. Facilitatory service
3. Advisory services
Please specify the broking firm_________________________________
10. Do you have any suggestions/ideas which would help your broker to serve you
better?
____________________________________________________________________
___