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22742565 Customer Relationship Management of Bank Sector

22742565 Customer Relationship Management of Bank Sector

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11/03/2011

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Sections

  • 1.1 ‘Banking’ on CRM’
  • 1.2 Defining CRM
  • 1.3 Study of Banking Sector
  • 2.1 Definition of banking
  • 2.2 Know Your Customer (KYC)
  • 3.1 CRM in banking
  • 3.2 Needs of a Bank
  • 3.3 Utility of CRM in Banks
  • 3.4 CRM is Business Transformation
  • 3.5 CRM Implementation in Banks in India
  • 4.1 Consumer Exclusion and Social Responsibility in Marketing Decisions
  • 4.2 FIELD RESEARCH OBJECTIVES
  • 4.3 METHODOLOGY
  • 4.4 TABLE 1. DEMOGRAPHICS OF THE SAMPLE
  • 4.5 Data Analysis
  • 4.6 FINDINGS
  • 5.1 Setting socially responsible Marketing Objectives and Strategy
  • 5.2 Customer Dialogue Builds Loyalty & Profit
  • 5.3Customer 360°
  • 5.4 Inbound Customer Marketing Research Report
  • 6.1Banking on an Online Future
  • 6.2 Cost Trap
  • 6.3 The Rewards
  • 6.4 Understanding Your Customer Base
  • 6.5 Cautious Future Expected
  • 7.1 Strong Power Base
  • 7.2 A Key Element
  • 8.1 Defining CRM
  • 8.2 The Evolution of CRM & The Challenges of Personalized E-Support
  • 8.3 Customer Support – A historical perspective
  • 8.4 Evolution of Customer Relationship Management
  • 8.5 Current CRM and E-support Environment
  • 8.6 The challenges of personalized Enterprise E-Support
  • 8.7 Overview – More than just E-Support
  • 10.1 Ten Myths About the Customers
  • 10.2 Retail Bank: Let's Ask the Customers
  • 10.3 Five "Doing-Areas"
  • 10.4 Seventeen Customer Directives- evolution of E- CRM
  • 11. Help Customers Navigate
  • 12. Privacy
  • 13. Should Not Limit Customers Choices
  • 14. Relevant Details
  • 15. Give what is genuine to a customer
  • 16. Should Be innovative
  • 17. Do not Ignore Important Relationships

A Dissertation On

Customer Relationship Management And Importance Of Relationship Marketing In The Banking Sector
This project report is being submitted as a part of the requirements of the MBA Program of Bangalore University. The project has been undertaken
By:

SHRIYA MEHROTRA
Reg. No. 04VWCM 6117 With the guidance and support of Prof. Raja Sekhar Faculty: MBA

ALLIANCE BUSINESS ACADEMY BANGALORE – 560 076 Batch: 2004-2006

1

Declaration
I, Shriya Mehrotra, student of MBA 4th semester, studying at Alliance Business Academy, Bangalore do here by declare that this project relating to the topic “Customer Relationship Management And Importance Of Relationship Marketing In The Banking Sector” had been prepared by me after undergoing the prescribed dissertation requirements a part of the objective of the MBA program of Bangalore University ( Batch of 2004-2006). The study has been done under the support and guidance of Prof. Raja Sekhar. I further declare that this project report has not been submitted earlier to any other University or Institute for the award of any Degree or Diploma. Date: Place: Shriya Mehrotra Reg. No. 04VWCM 6117

2

Certificate
This is to certify that SHRIYA MEHROTRA, student of MBA 4th semester Reg. No. 04VWCM6117 of our Institute has completed his Dissertation report on the topic “Customer Relationship Management and Importance of Relationship marketing In the Banking Sector”, under my guidance, and that no part of this report has been submitted for the award of any other Degree or Diploma to any other Board or University.

Date: Place:

Prof. Raja Sekhar Faculty Alliance Business Academy

3

Acknowledgement
The satiation and euphoric that accompany the successful completion of task, would be incomplete without the mention of the people who made it possible. After all, the success is the epitome of hard work, severance, undeterred, zeal, stead fast determination and most of all encouraging guidance. So with immense gratitude, I acknowledge all those whose guidance and encouragement served as a “beacon light” and crowned our efforts with success. I sincerely thank Mr.Sudhir.G.Angur, Honorable president- Alliance Business Academy, for giving us an opportunity to take up this research. I thank him for being a constant source of inspiration and encouragement. I would like to express my profound sense of gratitude to Mr.B.V.Krishnamurthy, Director and executive vice president –Alliance Business Academy for providing me support to conduct this research With a deep sense of gratitude and indebtedness, I sincerely and whole heartedly thank Prof. Raja Sekhar, my project guide for giving me valuable suggestions and advice through out the execution of the project. Last but not the least, I would like to thank almighty God, my parents, and my friends who helped me gather these data and have sat with me for hours discussing about the project.

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1.BANKING ON CRM 1.1.TABLE OF CONTENTS Sl.METHODOLOGY 4.FINDINGS 13-23 5 CRITICAL ISSUES AND TERMS 6 SWOT ANALYSIS OF RETAIL BANKS 24-27 28-30 5 .KNOW YOUR CUSTOMER (KYC) 6-7 3 RELATIONSHIP MARKETING IN BANKS 3.3.2.6.WHAT IS BANKING 2.2.FIELD RESEARCH OBJECTIVES 4.2.WHAT DOES BANK NEED 3.DEMOGRAPHICS OF SAMPLE 4.5.3. 4.4.DEFINE CRM 1.2.CRM IN BUSINESS TRANSFORMATION 3.5.CRM IN BANKING 3.HOW CRM HELP BANKS 3.CRM IMPLEMENTATION IN INDIAN BANKS 8-12 4 SOCIAL CONCERNS 4.STUDY OF BANKING SECTOR Page no 1a 1-5 1b INTRODUCTION 2 BANKING 2.1.1-CONSUMER EXCLUSION & SOCIAL RES IN MARKETING DECISIONS. No CHAPTERS EXECUTIVE SUMMARY 1.4.DATA ANALYSIS 4.3.

7 RELATIONSHIP BANKING IN 8 TROUBLEDTIMES CRM IN FINANCIAL SERVICES SECTOR 8.2 EVOLUTION OF CRM & CHALLENGES OF PERSONALIZED E-SUPPORT 8.1 DEFINING CRM 8.3 CUSTOMER SUPPORT FINANCIAL &BANKING TECHNOLOGY 31 32-37 9 38-39 40-74 10 WHAT CUSTOMERS WANT TEN MYTHS ABOUT THE CUSTOMERS WHAT CUSTOMERS WANT CUSTOMERS DIRECTIVES 11 BENEFITS OF IMPLEMENTING CRM WARNING & PITFALLS PRINCIPLES OF SERVICES IN BANKING SUGGESTIONS 12 CONCLUSION 75-78 79-80 13 REFERENCES 6 .

LIST OF TABLES & FIGURES Table 1 Demographics of the sample Table 2 Number of financial institution used Table 3 Frequency of travelling for contacting financial transactions Table 4 Importance and availability of technology and bank services Table 5 Access to various banking services Table 6 Use of various banking services Table 7 Requirements of banking services in the region Table 8 Use Automatic Teller Machines ( ATMs ) Figure 1 Workforce management system Figure 2 Evolution of CRM Figure 3 Customer 360 degrees Figure 4 E. “Use what I give You” Figure 2-3 “let me make a valid comparison” Figure 2-4 Helpfulness as hindrance Figure 2-5 Conflicting navigation system Figure 2-6 too many homes Figure 2-7 “Don’t lock me out” 7 .Support Figure 5 Financial & Banking Technologies Figure 2-1 “tell me what I get if I do this” Figure 2-2 “I’ll do it myself when I’m ready”.

there is more to Customer Relationship Management (CRM) than just managing customers and analysing their behaviours. Today’s knowledgeable consumer is challenging the Indian retail banking industry to redefine itself. a number of private sector banks have joined the fray and are offering a plethora of products and services.1 ‘Banking’ on CRM’ “Competition and globalisation of banking services are forcing banks to be productive and profitable. banking is more customer-centric.Chapter 1 INTRODUCTION 1.rechristening themselves as ‘Financial Boutiques’. In this context. Service providers have recognised that good CRM bonds customers with the organisation for a longer term. there is hardly any option but to learn from and actively respond to consumers’ needs. In this context. banks should focus strongly on relationship management with customers. The entire service industry is now metamorphosed to become customer. to a great extent. unlike the yester when it was transaction-centric. for a bank to survive competition. resulting in increased revenues. Banks offering retail products need to reorient their 8 . Gone are the days when customers at a bank did not mind the long serpentine queues and waited patiently for their turn with a token in their hand. To provide customised services. and exploring the possibility of cross-selling products to gain a competitive advantage are the other issues drawing attention and interest. to ensure customer satisfaction. Knowledge dissemination has been propelled by electronic and mass media campaigns. To retain High Net Worth individuals. The key to develop and nurture a close relationship with customers is by appreciating their needs and preferences and catering to their requirements. Banks are increasingly focusing on the premise that customers choose on the service provider who differentiates through quick and efficient service. online banking is assuming a great significance. Innovative Customer Relationship Management (CRM) strategies and cutting edge software can help. With the opening up of the economy. banks are opening Personalised Boutiques which provide all the required financial needs of a customer”. Thus in this current competitive scenario. in achieving the desired results. succeed and make profit. to appropriately analyse and understand the needs of existing customers better. The challenge is for the banks to work towards ensuring that customers prefer their products and services over that of competing brands. However. banks are coming up with a wide array of novel products and services every day. no one has the leisure to wait. With customers’ expectations becoming even more competitive. the management of customer relationship in financial services industry demands special focus.specific. Banks are well aware that their success is predominantly dependent on the CRM strategies adopted by them. Leveraging on IT. Today. In today’s Internet era.

To a large extent. experts propose various ideas and approaches to understand the fundamental marketing motivations driving the CRM trend in banks. A good customer experience will drive customer acquisition and promote customer retention. bankers should identify domain enterprise. banks are in pursuit of newer ways and means of achieving organic growth through strategies that enable acquisition of new customers and retaining the loyalty of the existing customers. with the result that “customer churn” is the call of the day.with the end result of accelerating the business momentum. To meet the challenging preferences of the customers and to stay ahead of competitors. maintenance of efficient service delivery standards and business process reengineering. Besides understanding the requirements for CRM implementations such as. in other words. it acts as a drain on the existing resources of the bank. Ensuring a good customer experience at every customer touch point is the cornerstone of a successful growth strategy. process and products more effectively to embark on the true relationship banking--. is the hallmark of a successful CRM strategy. which is borne out by Nat West’s success. Banks are adopting CRM to converge people. most bankers resort to customer grabbing. for gaining a greater slice of the market share. As top management emphasizes on “delivering results”. Success of a bank’s strategy towards customer acquisition will depend on its ability to develop customer insights and translate these into effective operating models. Having understood the significance. Incidentally. At the end of the day. The domains of software systems.managing to sustain and achieve growth and profits. On their part. Online banking. Therefore. leveraging CRM has become sine qua non. putting on pleasing attire. employees need to demonstrate certain service traits such as. it is prudent to plan for CRM in retail banks. which can be better employed for growth initiatives. bankers are bound to attract customers by providing a spectrum of services. The battle of the banks. credibility in the market. Emphasis on CRM arises on account of the challenges confronting retail managers----. In order to bolster their top lines. Banks can enhance customer service by leveraging on technology. cost implementation and relationship with the vendor as factors on which vendor selection is based. bankers should display a flair for cultivating a good relationship with customers through the mechanism of better customer service. rather that customer cultivation and creation. This. ATM banking and telebanking are just a few of them. is taking on a new dimension. Towards this end. Bankers are conscious of the relative costs of acquiring new customers. In the current falling interest rate scenario. With the shift from a transaction-centric to a relationship-centric business approach. Towards this end. the challenge for the banks is to retain and deepen the profitability of the existing customer relationships. which translates into increased profits. Moreover. banks are finding it increasingly difficult to meet the high growth expectations. the setting up of a 9 . bankers are fully aware that losing the existing customer and acquiring new customers is an expensive affair.strategy from a product-centric to a customer-centric approach to attract and retain High Net Worth Individuals (HNI) and profitable customers as well. multiply product database and tracking require specific CRM focus. the success of a CRM plan is dependent on the choice of the software.

The ability to predict the products that customers are likely to purchase over a period of time. 10 . It is observed that banks lose their best clients to competitors due to a variety of reasons. Having witnessed the manner in which several global banks have benefited through CRM. CRM enables organisations to motivate customers to initiate revenue-generating contacts. and streamlining of business processes are some of the benefits retail banks obtain by taking to successful management of their customer relationships. introducing CRM audit by independent teams to identify the existing lacunae. percolating and permeating to all levels of the CRM is a necessity in the present business scenario. The rationale behind losing their best clients to other service providers such as non-brokerage houses and mutual fund houses needs to be analysed by banks. and maintaining successful customer relationships. the Indian retail banks too need to focus on and continuously invest in the customer relationship activities. as well as the product environment. which will facilitates in developing better products. which is still at an embryonic stage as far as the CRM domain is considered. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention. and rating of services across the network of branches. analyzing the attrition of the clients in a particular product.CRM cell and conducting surveys at a periodic intervals to track their effectiveness. Another dimension of the relationship building exercise is to obtain an electronic feedback from customers to understand the level of acceptance of existing products. achieving operational efficiency and maintaining customer loyalty. Experts opine that inefficient and improper service is one major reason. the management initiatives for CRM assume importance. acquisition and retention. sales and customer service staff. such as. In this context. developing. and plugging the loopholes in the CRM strategy as per the recommendations of the audit report. application and challenges draw attention of the banking industry. increased productivity of managerial executives. As a part of the planning process. banks need to understand how CRM assists them n customer identification. infrastructure. are required to be adopted by the banks for reaping benefits. Banks can gain a competitive advantage from CRM by becoming low-cost players in the market. needs to strive towards CRM implementation to meet the emerging demands of “universal banking”. The remedies suggested by them are that banks should adopt customer relationship building approaches such as responding to complaints instantaneously. Initiatives. The Indian banking scenario. and the creation of a suggestion box to elicit the views and suggestion of their employees. frontline executives in banks should thoroughly understand their organisational structure. A top-down CRM focused approach that starts with the top management. its effectiveness. 1. Several CRM issues such as. Implementing the right CRM tools can enhance customer satisfaction leading to business growth.2 Defining CRM Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing.

CRM.Customer Relationship Management (CRM) as the name suggests.meaning Customer relationship management (CRM) is a business strategy that spans your entire organization from front office to back-office. Having an impact on consumer behavior means being able to change consumer’s perception of the product or service. and customer service strategies. In order to achieve better insight on CRM. Each consumer has a specific behavior. • Reach more customers more effectively. Therefore companies always want to gain some insight about consumer behavior and habits in order to better control this behavior. All forces are coupled together to save. companies gain a better understanding of their strongest and weakest areas and how they can improve upon these. • Drive improvements in business performance by providing your customers with the ability to access more information through self-service and assisted-service capabilities when it is convenient for them. sales. It is a commitment you make to put customers at the heart of your enterprise. and acquire greater business to customer relationships. CRM helps create time efficiency and savings on both sides of the business spectrum. increase customer retention and boost customer loyalty by leveraging opportunities to up-sell and cross-sell and driving repeat business at lower cost. Today’s customers face a growing range of choices in the products and services they can buy. 11 . They base their choices on their perception of quality. customers gain better products and services from their businesses of choice. Through correct implementation and use of CRM solutions. • Balance sophisticated functionality with rapid implementation and effective support for a faster return on your CRM investment. CRM is a more efficient automated method used to connect and improve all areas of business to focus on creating strong customer relationships. The key objective is to increase customer value over time by increasing customer loyalty. The most common areas of business that are positively affected include marketing. improve. In general. If a company develops better customer relationships. value. the primary focal point is placed on the customer. The right CRM strategy and solutions can help you securely. But buying habits are sometimes difficult to understand. to establish a relation between the company and its clients. Therefore. it is essential to consider all of its components. and service. and any channel access to accurate information and more personalized service. • Enable virtualization in your enterprise as more of your people and resources extend beyond your offices and around the world. anywhere. reliably and consistently: • Delight your customers every time they interact with your business by empowering them with anytime. it also improves business processes as well as its profits.

government-owned banks) continue to dominate the Indian banking arena. It is the foremost monitoring body in the Indian financial sector. Singapore. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. 12 . private banks and specialized banking institutions. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i. the public sector banks or the nationalized banks have acquired a prominent place and has since then seen tremendous progress. Philippines etc. borrowing and lending). Hong Kong. The private sector bank grid also includes 24 foreign banks that have started their operations here. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive players. The nationalized banks (i.e. Indian banks are now quoting at higher valuation when compared to banks in other Asian countries (viz.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Under the ambit of these nationalized banks come the specialized banking institutions. The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization.e. 223 banks are in the public sector and 51 are in the private sector.1.3 Study of Banking Sector The Indian banking can be broadly categorized into nationalized (government owned). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look anew at their existing portfolio offering. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization The Reserve Bank of India act as a centralized body monitoring any discrepancies and shortcoming in the system. Ever since nationalization of banks took place in 1969. capable of meeting the multifarious requirements of the large customer base. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. Industry estimates indicate that out of 274 commercial banks operating in India. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high revenue’ niche retail segments.

Chapter 2 BANKING 2. Customer: There must be some recognizable course or habit of dealing in the nature of regular banking business. Banker: Banker is “Any person acting as a banker” Negotiable Instrument Act. • A customer is doing us a favour by letting us serve him. Conduct Current Accounts ii. • A customer is not dependent on us. can be a banker who does not: i. corporate or otherwise. • A customer is not someone to argue or match wits with. MAHATMA GANDHI’S DEFINITION OF CUSTOMER • A customer is not an outsider to our business. Pays cheques drawn on himself iii. he is a flesh and blood human being with feelings and emotions like our own. • A customer brings us his wants. whether we are a driver. “No one and no body. 13 . draft or otherwise. He deserves courteous and attentive treatment. A customer is not an interruption of our work. Negotiable Instrument Act. He is the purpose of it. Paget in Law of Banking states. • A customer makes it possible to pay our salary. must have an account. Collects cheques for his customers A bank is therefore “Any company that transacts the business of banking in India”. of deposits from the public. repayable on demand or otherwise and withdrawal by cheques. We are not doing him any favour.1 Definition of banking The accepting for the purpose of lending or investment. It is our job to handle them properly and profitably both to him and us. A single transaction can constitute a customer. some frequency in transactions is expected but is not essential. dealing must be of a banking nature. plant or office employee. He is a definite part of it. We are dependent on him. (Banking Regulation Act) Dr. • A customer is not a cold statistic.

Societies and Charitable Institutions Non resident and Persons of India origin Foreigners Before getting into the details of how CRM actually works in the financial sector. This is important because of drugs smuggling/ trafficking. it is very important to “know your customer”. through a person known to the bank or on the basis of documents provided by the customer.Bank Customers • • • • • • • • • • • • • • • Minor Married women Pardanashin Woman Illiterate people Lunatics Trustees Executors and Administrators Power of Attorney Holders Joint Account Hindu undivided Family Partnership firm Limited companies Clubs. • Any person/ entity connected with financial transaction which can pose significant reputational or other risks. Under the KYC a customer is: • A person or entity that maintains an account and/ or has a business relationship with the bank. 2. money laundering and terrorism coming up. 14 .2 Know Your Customer (KYC) It is very important to know the customer before having any kind of relationship with him (especially in the banking sector). • One on whose behalf an account is maintained. The RBI States: KYC must be the key principle for identification of an individual/ corporate for opening an account. If one has to build a relationship with the customer one should follow all the KYC norms laid down by RBI. This would entail verification through an introductory reference from an existing account holder.

Today’ retail banking sector is characterized by following: • • • Multiple products (deposits. Due to globalization new generations of private sector banks and many foreign banks have also entered the market and they have brought with them several useful and innovative products. consumers largely selected their banks based on how convenient the location of bank’s branches was to their homes or offices.1 CRM in banking Retail banking refers to mass-market banking where individual customers typically use banks for services such as savings and current accounts. and so has the choices of customers for selecting the banks. mortgages. and educational). credit cards. debit cards. customers are easily switching banks whenever they find better services and products. the customers have many expectations from bank such as (i) Service at reduced cost (ii) Service “Anytime Anywhere” (iii) Personalized Service With increased number of banks. investments and securities) Multiple channels of distribution (call center. new technology. This is just the beginning of the story. Banks are finding it tough to get new customers and more importantly retain existing customers. fixed deposits. loans (e. Non-traditional competition. 15 . credit cards. and the proliferation of the Internet are changing the competitive landscape of the retail banking industry. auto. investment advisory services (for high net worth individuals) etc. branch.Chapter 3 RELATIONSHIP MARKETING IN BANKS 3.g. market consolidation. housing. such as Internet banking and ATMs. Due to forced competition. products and services and practically nil switching costs. public sector banks are also becoming more technology savvy and customer oriented. insurance. personal. Internet and kiosk) Multiple customer groups (consumer. Before Internet era. small business. Thus the customer base of banks has increased. Thus. and corporate) Today. now customers can freely chose any bank for their transactions. depository services. With the Advent of new technologies in the business of bank.

This may be explained better from two initiatives bank took in the past: 1. 2. believing that the Internet was a lower-cost delivery channel and a way to increase sales. The value proposition. 50% in insurance and brokerage. Earlier what drove many bankers to invest in ATMs was the promise of reduced branch cost. banks need to retain existing customers with enhanced personalized services and products. CRM achieves this through Campaign Management by analyzing data from banks internal applications or 16 . call center. Thus.3 Utility of CRM in Banks CRM primarily caters to all interactions with the customers or potential customers. across multiple touch points including the Internet. Therefore banks are now stressing on retaining customers and increasing market share. bank branch. offerings and building long-term relationships with their customers through more customized products.According to a research by Reichheld and Sasser in the Harvard Business Review. whom to sell. field organization and other distribution channels. But what was discovered is that the financial impact of ATMs is a marginal increase in fee income substantially offset by the cost of significant increases in the number of customer transactions. when to sell. tailor products and services to meet their needs and sell these products to them. CRM can help banks in following ways: • Campaign Management . Again customer satisfaction drives the value proposition. and 125% in the consumer credit card market. that the primary value of offering Internet banking services lies in the increased retention of highly valued customer segments. however. how to sell and how to be different to increase profitability. personalized services and increased accessibility.Banks need to identify customers.2 Needs of a Bank The banks now need to find out what to sell. enhanced value offerings. 3. Banks also need to identify customers and products that would be most profitable and target customers with products that are most appropriate to their needs and serve the customers with greater cost efficiency. Studies have now shown. since customers would use them instead of a branch to transact business. Banks also need to find out the avenues for increased customer satisfaction. The increase in customer satisfaction has translated to loyalty that resulted in higher customer retention and growing franchise value. Banks need to differentiate themselves by adding value-added service. which best suits their needs and satisfies them the most. was a significant increase in that intangible called customer satisfaction. which leads to increased customer loyalty. 3. 5% increase in customer retention can increase profitability by 35% in banking business. Bankers invested in Internet banking. however.

Enhanced productivity – CRM can help in enhanced productivity of customers. fax. Thus improved transparency leads to improved efficiency. as well as internal training material. Fax.Instead of customer information being stored in product centric silos. Activity Management – It helps managers to assign and track the activities of various members. Marketing Encyclopedia . the online portals. sales presentations. the required follow-up and interaction with the prospects. banks can identify the most lucrative customers and customer segments. including opportunity. Removal of inconsistencies of data makes the client interaction processes smooth and efficient.g. An effective CRM solution supports all channels of customer interaction including telephone. irrespective of whether the communication is from sales. e-mail. 17 • • • • • • • • . and execute targeted. Contact Center – It enables customer service agent to provide uniform service across multiple channels such as phone. while aiding the functioning of the bank. wireless devices. account. Based on these profiles. separate databases of savings account & credit card customers). income levels and other related criteria. • Customer Information Consolidation . It also links these customer touch points to an operations center and connects the operations center with the relevant internal and external business partners. Personalized sales home page – CRM can provide a single view where Sales Mangers and agents can get all the most up-to-date information in one place. and face-to-face contacts with bank personnel. Internet. with CRM the information is stored in a customer centric manner covering all the products of the bank. thus leading to enhanced customer satisfaction. email. finance or support.These enable organizations to effectively manage leads and opportunities and track the leads through deal closure. proposal templates and marketing collateral. (for e. news. partners and employees. 360-degree view of company – This means whoever the bank speaks to.Central repository for products. and expense report information. CRM integrates various channels to deliver a host of services to customers.by importing data from external applications to evaluate customer profitability and designing comprehensive customer profiles in terms of individual lifestyle preferences. Operational Inefficiency Removal – CRM can help in Strategy Formulation to eliminate current operational inefficiencies. the bank is aware of the interaction. Lead and Opportunity Management . pricing and competitive information. personalized multi-channel marketing campaigns to reach these customers and maximize the lifetime value of those relationships. ATMs. This would make sales decision fast and consistent.

Have defined Objectives . Customers can get account information. IDBI.4 CRM is Business Transformation Too often banks have focused on the wrong areas of CRM. Customers can be evaluated within a scoring framework. Data warehousing solutions have been implemented in Citibank. Combining the behavior key figure and frequency to monetary acquisition analysis with a marketing revenue quota can optimize acquisition costs and cut the number of inefficient activities. With such knowledge. Make changes internally before going for CRM: Many banks have spent a lot of money on CRM. National Stock Exchange and PepsiCo. At the same time there may be a few customers who still prefer the traditional methods of banking. And Business Intelligence players hope many more will follow suit. uncover trends in customer behavior. CRM with business intelligence allows banks to assess customer segments.Measurements of profit are often constructed to embrace only the initial cost of sale.Banks need to analyze the performance of customer relationships. CRM is really about business transformation—changing the business from services-centric to customer-centric. and that this is reflected in actual marketing budget allocation. MaxTouch. and understand the true business value of their customers. 3. Unfortunately for these banks. Customers may not want what they get: A CRM system apart from improving front office operations and customer servicing also helps in coping with many services that do not need manual intervention. banks can efficiently allocate resources to the most profitable customers and reengineer the unprofitable ones. State Bank of India. 18 . turnover etc. A word of caution…. ACC. This is of little use if the ongoing cost of servicing a customer outweigh the margin of profit that customer is generating. such as RoI. Sales etc. ICICI. Banks need to be flexible enough to continue to extend the "personal touch" that such customers prefer. These are serviced by channels like IVR. which help them calculate the net present value (NPV) of a customer segment over a given period to derive customer lifetime value. finding it easier to buy CRM technology than to make the major internal changes necessary to really make CRM work for them. Reserve Bank of India. the software has often failed to deliver. Internet and ATM. It is critical that banks have recognized and embraced the importance of the trend towards customer development.• CRM with Business Intelligence . information on credit balance. issue instructions for drafts or even transact through these.Many CRM implementations have been approved without examining aspects like profitability. Consider Complete Life Cycle Costs while budgeting . CRM implementations should have well defined objectives.

5 CRM Implementation in Banks in India According to Nasscom report “Strategic Review 2004”. There are many players and competition is tough. and make critical information available to relevant stakeholders. Good Decisions based on Right Information.Design innovative programs focusing on customer acquisition. 19 . and customer service.3. Design programs. retention. The pressure will be on banks to integrate data from every channel and know what customers say so that the banks deliver what they want. cross-sell. Banking and financial services segment has a high growth potential and accounts for 22 percent of CRM license revenue. based on customer insights. Gather customer information at a broader set of touch-points. Consolidation and technology would become must for sustenance and growth. Indian CRM market was estimated at US $ 14 million and is forecast to grow to US $ 26 million in 2005. Customer Relationship Management is an important weapon in this fight. As the competitions increase. experience and industry best practices. perform in-depth analysis. The retail banking industry is undergoing revolutionary change. HDFC Bank and Citibank.The information from a CRM program can often guide better operational business decisions at many levels of the organization. The ability to mass customize the customer experience and refresh the value proposition is necessary to retain the right to do business with the customer.Do intensive data analysis and value-based segmentation to highlight the value of different customer segments and the underlying drivers of that value.Design internal and external processes to support and sustain successful programs. banks will require the robust CRM functionalities in order to manage their most valued asset – their customers. loyalty. which are using CRM products. Design Processes. Disciplined work along four dimensions can significantly improve results from CRM initiatives: Customer Segmentation. There are many banks such as ICICI Bank.

in order to create a new contemporary profile.1 Consumer Exclusion and Social Responsibility in Marketing Decisions The radical changes occurring in the micro and macro environment. education. Considering the implementation of eventual globalization it is crucial to remember some of the basic axis of the concept. that the traditional marketing concepts as well as global management principles and foundations. there is a need of a worldwide community to capitalize effectively and efficiently the opportunities based on the principles of the "system". the creation of a global community has to underline and incorporate local and regional social characteristics. Moreover. have been used as a cover in various decisions concerning the selection of target markets. the authors argue that companies have to be repositioned in the society as well as in front of their selves. are widely known. The defenders of the concept of globalization argue that it ideally leads to a multi/cross cultural and without boundaries world. communication and information. It is certain that technology has a pivotal role in the context of globalization. in contradiction to the new role they have to play in the adoption of the globalization concept? The focus of this paper is on the companies' role in the implementation of globalization under their social responsibility's point of view and the re-thinking about some basic marketing concepts. 20 . However. For example. the concept of societal marketing having as its core theme the company's orientation toward the well-being of the customer and generally the society creates at the same time a field of dialog between the academic community and the industry. as a direct consequence. technology is being presented as the magic "stick" that could eventually overcome any obstacle or problem and create a worldwide community to sharing equal opportunities in progress. In this context. It is known that companies often underline their role within the society as the meaning of their new profile and orientation. which dynamically affect the marketplace and its participants. This is of great importance only when it is clear that technology has to be user/citizen oriented and publicly accessible. in tune with the needs and evolution even of the regional and local communities. In practice this can be translated into specific directions for public and private organizations and their various orientations in order to provide opportunities at local and regional levels. Both the industrial and the academic communities have to realize the need of a re-determination and re-evaluation of many basic and traditional concepts of the strategic marketing plan. Moreover. What happens in the real world when attempting to create the "global community"? Is there any re-orientation of the aims and objectives instigated by industries? How do companies target the market in terms of geographical dispersion? Which are the main criteria when evaluating the selected target markets? Is there any "space" to serve small or isolated communities? Is there any possibility.Chapter 4 SOCIAL CONCERNS 4.

Financial exclusion also is accepting self-exclusion. and of course. due to a certain distribution-related decision (access exclusion). we can see that in the vast majority of the small isolated islands in India. offered in isolated areas in India. may create barriers between the customer and the company that do not support a further relationship. This is exactly the case. not matching image (as a result of false or "correct" perceptions). often called a strategic partnership Financial exclusion is strongly related to service providing. However. It might be caused by macro-economic factors and facts or. In these cases. 21 .not affordable price (price exclusion).Services are becoming more and more a major competitive tool. the customer is definitely an integral part of the marketing and delivery process. any mentioning about "corporate identity building" and "corporate / brand equity building" is to be avoided. This is because exclusion decisions have already been taken and implemented. In any case. even in the physical goods industries. A decision made by the customer as a result of dissatisfaction from a previously related experience. strongly related to a previous experience (condition exclusions). from the strategic point of view. Financial exclusion could be experienced in many different ways.Marketing should always be addressed to customers in order to gain the answers it looks for. when this kind of exclusion occurs. then the living standards become even lower. It is widely accepted that the social role of companies is manifested by the improvement of the living standards of the society. However. as the result of decisions made by the management of a specific company or even by the whole industry. of course. Referring to the specific example of bank services. However. to all its inquiries. In some cases the lack of the provision of financial services becomes unjustified having in mind the opportunities provided by information technology. Marketing ethicists have long criticized some marketers for making nonsocially responsible or even unethical decisions in the market selection. Particular conditions related to the marketing mix factors (marketing exclusion). when referring to the banking industry. such as a high . necessitating a close relationship. the local post office branches are servicing customers. Its key characteristic is the inability of some customers to access necessary financial services in an appropriate form. the service provider via the implemented processes and the humans involved is the one with the determining role in its implementation . but even traditional local bank branches are not provided. not only technology aided banking services. particularly when talking about service provision. they are providing only the most common banking transactions. not all customers experiencing financial exclusion are of any interest for a company. These issues have been referred to as the ethical issues of inclusion and exclusion and these are the basic axis that marketers have to follow in order to adopt a new orientation in the context of globalization (An example of an exclusion decision is not providing a needed product / service to a segment of the population which needs it ). the lack of accessibility. as probably expected. But this is to ascertain that when social exclusion occurs.

these neglected customer segments can be of interest to the banking industry. including increased competition from new entrants in the markets. Only few financial services were traditionally offered in these areas. Contrary to common belief. these conditions can accelerate the use of new technologies and modern financial products. isolated population and: Investigates the banking services currently used by customers. Nowadays. those who have never been included. mergers and information technology. The inhabitants of isolated areas cannot satisfy their banking needs although they have a healthy income profile and financial strength. this paper attempts to examine the issues further. There are many small isolated islands with no traditional local bank branches in India. such as cheques and credit cards is the norm in isolated areas. The research is exploratory. • Investigates the usage of virtual banking services. Lack of awareness in the use of technology and limited contact with payment systems. the familiarity with banking services and the use of technology for the consumption of these services have been the subject area of previous research. the most common banking transactions are often provided by the local post office. are present in the banking sector in India. Banking needs. as the available information in relation to customers living in isolated areas. • Identifies their perceptions of the existing banking services. resulted in the development of a combination of tactics related to the adoption of cost cutting activities and increased emphasis on market segmentation and appropriate targeting. When available. • Explores their banking needs. This study was designed to focus on a distant. by the inhabitants of two remote and isolated islands in Greece. 4. no technology aided banking services are provided. is insufficient on these elements. It examines the expectations and the satisfaction of the banking services.2 FIELD RESEARCH OBJECTIVES Financial exclusion is often largely attributed to structural changes in the financial services sector. 22 . due to the increased competition in the market. little is known about the above and the elements contributing to satisfaction for people who have always experienced financial exclusion and are not familiar with technology.This piece of research reveals the correlation between the geographical and financial exclusion concerning two geographical remote areas in India. However. In these islands fully developed financial services have never been offered. The study identifies the banking attitudes of a customer segment that hasn't been investigated in the past. • Investigates their attitudes towards the provision of unmanned banking services via Information Technology. However. In the vast majority of them. All these characteristics. the use of banking technologies and the usage of available banking products.

but not of the whole of Greece. Almost 59% of the respondents never went to High school. As expected. The educational profiles were more extreme in those that never left the islands. further more they were significantly better educated than women. it rarely happens to the citizens of those areas to be selected as respondents to surveys. has a long tradition in sugarcane farming and attracts manufactures of sugar and allied products. 23 . they feel excluded not only from what is happening but even from what is being planned or prepared by almost all sectors. It is not surprising to find that a quarter of the inhabitants are retired as the population of these islands is ageing. Sitapur is a suburb and attracts mostly business class. while only 12.5% of the sample had a higher education qualification. where most people graduate from high school and the majority continue a higher education. The inhabitants experience a certain kind of "exclusion" by both the private sector and the public sector. due to resource limitations. 190 were interviewed in Sitapur and 169 in Biswan. and.3 METHODOLOGY Sampling Frame Two of the most isolated suburbs. not only as customers or as audience but even as citizens that "their opinion counts". The education of the sample is representative of the educational levels of isolated areas.In both places there is a post office. So.4. living in two villages. offering a limited range of financial products. It is worthy to mention that. In 1991 it had a population of 267. were chosen as collecting data from all the remote Uttar Pradesh cities is almost impossible. Of those. The men had stayed in areas other than the place of origin. A total of 359 people (representing approximately 51% of the inhabitants of the islands) were interviewed (table 1). Sitapur and Biswan. The area of Biswan is somewhat bigger. this kind of exclusion leads them to a greater disappointment in conjunction with the other forms of exclusion.

47 13.18 5.14 4.6 12.11 10.42 26. who were quite different from those in Lucknow.28 100.27 6. the capital of Uttar Pradesh.47 45 51 63 65 41 94 21 189 99 45 5 17 3 17 89 109 11 34 49 9 21 359 12.53 174 48.21 25.88 1.65 27.07 6.04 60.55 18.4 TABLE 1.35 2.74 19.74 2.05 16.06 9.12 34.53 14.16 27.84 4.74 5. it was decided that the questionnaire should be pre-tested for a second time.75 28.96 13.07 3.33 13.42 19.11 3. it was appreciated that 24 .00 Male Female Age 18 – 25 25 – 35 35 – 45 45 – 55 55 – 65 65 + Education 73 114 26 23 36 32 19 51 13 108 53 11 2 None Primary School High School University Other Occupation Farmer Trader Salaried Retired Housekeeper Total 13 2 6 47 75 7 Civil Servant 11 Businessman 14 Privately employed 4 Other 8 187 The actual study was conducted over a period of two months in three stages: A draft questionnaire was developed during the first stage.95 57.40 24.21 17. Since the sampling frame contained respondents. Research Instrument and Procedures TABLE 1.77 2.91 7.88 11.49 2. In addition.90 12.79 30.51 5.58 6.34 5.95 1.74 24.11 11.00 4. Demographics of the sample Never lived away Total Gender % 39.37 20.28 15.65 47.85 52. under real circumstances.13 40.19 12.33 0.65 2.4. DEMOGRAPHICS OF THE SAMPLE Data Collection.74 0.00 185 51.25 17.88 7.85 100.53 1. The questionnaire was pre-tested in Lucknow.09 26.36 3.70 19.39 4.30 19.77 1.79 25.56 100.00 Lived away>1 Total year Total % Total % 112 60 19 28 27 33 22 43 8 81 46 34 3 4 1 11 42 34 4 23 35 5 13 172 65.

descriptive statistics are displayed. using T-Tests.identifying and approaching the inhabitants of these isolated areas was very difficult and contacts with the local opinion leaders should be developed to overcome these problems. in order to identify the exact relationships. More precisely. it was clear that data should be collected by person-administered interviews. although helpful and very interested to express their opinions. particularly social and financial one. observed significance level of the test (p) less than 0. 4. To overcome this problem and in order to capture the true perceptions of this particular sample. Five focus groups with inhabitants of each suburb. In this section. we performed a series of extensive statistical analysis. Friedman two-way ANOVA test was conducted. almost all respondents have some sort of bank account. the hypothesis that the variables under investigation are independent was rejected. chisquare statistics. It was apparent that the prospective respondents. Pearson χ2 was also used in order to examine comparisons of categorical data. we discuss the key findings of this study. During the second stage. As expected. independent samples t-test was used. Because of the exploratory nature of all the issues examined. in order to reveal the provision of those services in the particular areas. As shown on table 2. followed. the quantitative data was collected via in-home interviews and interviews in public places that locals tend to visit on a regular basis. the study highlights their perceptions about the provided services.5 Data Analysis Research on the inhabitants' views in these areas is relatively limited. An interesting finding is that a high percentage of the sample 25 . For all tests. as long as they make the effort to obtain them. had difficulties in understanding and filling it in. the priest.05. the Mukhiya.e. the final research instrument was developed and links with the local communities were established. in order to examine the hypotheses that the opinion of people in the two samples and the fact that the one group has experienced living away from the island was not related. I collected the quantitative data. Basic information and support in reaching the general population was given. During the last stage. the population of those remote areas is not denied access to financial services. As a next step in our analysis.6 FINDINGS A primary objective of this study was to investigate the banking services currently used by customers. In addition. in order to provide also a new perspective on companies' social responsibility issues combining those with "exclusion". Ten semi-structured in depth interviews were conducted with local opinion leaders (i. The fieldwork for this part of the study was conducted in four days. by examining the mean rank differences. helped in the development of a general understanding of the situation and attitudes towards both technology and banking. This was mostly due to their limited experience in participating in research and answering closed questions. the questionnaire was pre-tested. 4. teachers in the local schools). During the focus groups. To assess the ranking of different variables.

7 12 6. p= 0. it is clear however that 30. p=0.06).00 Once a week Once per 15 days Once a month Less than once a month Never TOTAL An interesting finding on a related topic. The results highlight that it is almost compulsory for someone who wants to satisfy banking needs to visit another island. technology and its contribution to the areas wellbeing is that all respondents identified technology as a key factor in the development of their area (table 4).4 44 25. Only 5.00 As far as the conditions of use is concerned. Those that have lived away were even more disappointed with the services provided.11.0 Four or more 4 2. i.7 5 2.0 Lived away> 1 year Total % 0 0. since staying away overnight or even for a longer period is often necessary due to the frequency of the islands' connection by boat and the weather conditions.2 11 6.1 Two 76 40.97.6 56 32.56 43.1 Total 187 100. technology was also found to be far from being adequate.(56.e. while all residents travel with a similar frequency (Pearson x2= 2. although the observed difference was not statistically significant.5 62 33.72).1 One 90 48. more qualified young people will stay there.26 18.9 172 100. This cause additional cost to them associated with banking transactions.37% of the sample claim that they need to travel to another island at least once every two weeks to make their required transactions. are banking with more than one financial institution.29 100.11 35.8 75 43.57%). Frequency of travelling for contacting financial transactions Never lived Away Total % 5 2. TABLE 3.06 11.70 2.00 65 37. Number of financial institutions used Never lived Away Total % None 2 1.0 Lived away> 1 year Total % 9 5.0 Total Total 2 155 151 42 9 359 % 0.0 Total Total 44 65 129 102 19 359 % 12.2 64 34.93 28.2 172 100.41 5. TABLE 2. since it was revealed that they believe that unless the area develops. Those respondents who have lived away does not presents any clear differentiation of those who have spent all their lives in the island regarding the use a different number of financial institutions from those (Pearson χ2= 8.6 52 30. 26 . Similarly to banking services availability.4 44 23.6 27 15.29% of the sample cited that they are able to make them all in the island they live on (table 3).51 100.2 187 100.6 Three 15 8.18 42.

83 0.10 1.85 1.71 4. Importance and availability of technology and bank services Never lived Lived Away away> 1 year Mean SD Mean SD Technology is a key factor for the 4.36 1.81 0. the people feel that payment of bills is the service to which they have the most access to in their region.Respondents provided low scores regarding their ability to access to the various banking services in their area (table 5).49 development of the region The needed banking services are 2. they feel that they do not receive the quality of service they perceive as standard.31 1. TABLE 4.61 -0.80 0.79 0. followed by withdrawal/deposit (x2=1108.68 -0. and therefore they have experienced ATM and other technologies usage in the past.00). those respondents that have been away for a long time.84 1.22 0.98 1. Particularly.25 available in my region The need for financial services 4. Only when referring to the most basic services (withdrawal/deposit) this is not the case.20 0.63 increase in summer 1= strongly disagree.83 27 .07 0.79 4. More precisely.78 0. a=0. 5= strongly agree Total Mean SD t-value p 4.82 0.73 4.

29 0. a=0. indicated to make use of any kind of credit cards for their transactions.26 0.84 1.81 The great majority of the respondents (67%) claim that they perform bank transactions at least once a month.14 0.38 3.12 3. Only a small % of respondents.94 1.40 0.67 -1.75 Credit cards payments 1.94 1.41 Subsidies 1.60 0.17 0. although the latter is still one of the least used services.02 Friedma n Mean Rank 6. Access to various banking services Never lived Lived Away away> 1 year Mean SD Mean SD Withdrawal– Deposit 3. 5 = very often Lived away> 1 year Mea SD n 3.73 1. appear to use the basic bank services more than the others and make more stock exchange transactions.48 0.67 1.31 3.72 2.14 0.06 2.00 0.53 -2.49 0.12 1. the basic banking services (withdrawals/deposits and payment of bills) are those that are used the most in the area (x2=1158.28 0.22 t-test SD t-value p 1.17 0.47 Subsidies 1.02 3.78 Friedma n Mean Rank 5.23 transactions 1= very difficult.88 2.57 3.19 0.03 0.47 1.29 1.15 0.31 3.59 1.62 3.26 Foreign currency exchange 1.04 28 . It seems that it is the custom of the area to pay in cash.67 Credit cards payments 1.89 4.45 0. 5= very easy 1.12 -0.48 1.82 2.96 1.36 1.67 Total Mea n 3.35 1.52 0.00) (table 6).10 0. TABLE 6.35 1.73 3.51 0.67 -0.16 0.18 1.36 0.98 2.70 3.25 1.88 1.86 0.80 0.21 1.24 1.51 0.51 0.31 0.46 1.98 Stock exchange 1.23 Stock exchange 1.18 0.58 1.84 0.93 1.75 3.92 Loans 1.03 5.84 Loans 1.47 transactions 1= very rarely.43 0.61 1.24 0.05 0.23 1.94 0.28 0.81 1.41 1.15 0.93 1.80 1.24 0.09 0.71 0.00 1.81 1.46 1.69 t-test t-value p -2.20 1.77 Payment of bills 2. Again. Those that have lived away.58 1.20 0.26 5.10 0.44 Payment of bills 3.TABLE 5.91 Foreign currency exchange 2.06 0.83 1.23 1.52 0.44 3.47 0.08 3.38 1.86 Total Mea SD n 2.17 0.39 1. Use of various banking services Never lived Away Mea SD n Withdrawal– Deposit 2.

it was revealed that there was no difference in the perception of the importance of all these elements (a=. the findings imply that they all agree that the quality of the service provided was not what they expected.00).31 4.85 0. Requirements of the banking services in the region Never lived Lived away> Away 1 year Mean SD Mean SD Reliability 4.33 4. However they all expressed some discomfort in relation to the speed of the system.38 0.54 3.40 0. where the participants linked their desire to have some personal contact with the bank employees with the fact that they have to make an actual journey to visit the bank.57 1.60 t-value 0.89 0.89 0.92 0.88 0. Although all respondents appear to have limited experience in using ATMs. For example. TABLE 7. the respondents all shared the same perceptions in relation to the standards of the banking services offered in their region. But.90 0.41 3. this finding was somewhat supported by the views expressed during the personal interviews and the focus groups.28 4.43 Personal contact 3. This could be a plausible explanation. When compared with the others criteria measured. (Pearson x2=8.89 0.74 1.39 1. Those that have spent some time away from the native place believed that this feature is of less importance than those that have stayed on the island for most of their lives and are used to doing business through personal contact.91 0. or in other words. more technologically developed areas.691.34 Security 4. appears to influence positively the potentiality of ATMs.90 0. They did not express any major concerns in terms of the security of the banking services and were reasonably content with the reliability of the systems.31 2.39 4.89 0.93 0.04 The use of ATM services are not at all popular. only "personal contact" received a slightly lower mean score. it seems that the experience of living in other. more than 44% of the respondents reported that they own and use a mobile phone.As shown on the following table (table 6/7). not excluded areas.33 4. their major concern refers to the coverage of the banking networks. 29 . or even in the past "they have never used" an ATM (table 9).32 4. security and convenience are most important features of the provided banking services (table 8).19 -0.32 Speed 4. since they use other technology.27 4. Among all requirements of the banking services in the region.88 0. When paired sample tests were performed.94 0.90 0.07 P 0. However. speed. 5= strongly agree Total Mean SD 4. the results indicated slightly differences among those who have lived away and those who have stayed for their whole lives on the island. implying that all respondents agreed that reliability.30 Convenience 4. Once again.00).76 0. a=. as 71% of the sample cited to be non users of ATM services.93 0.64 1= strongly disagree.

25 70.75 100. it was clear that the Internet was only used for information gathering. The inhabitants of these islands were security conscious. Moreover. By explicitly considering these issues.46 145 77. or it is the result of their interpretation of some basic marketing concepts? 30 . that less than 2% of the respondents have ever used a bank's web site. and ATMs were perceived as such. None have used the Internet for banking.TABLE 8. and were not willing to trust the equipment.00 I have used ATMs I have never used ATMs Total In the in depth interviews. Some of the people interviewed felt that using an ATM machine is risky. the exclusion of these places entail also very important social and political implications.37 172 100. This is mainly due to problems with the telephone connections used at present to support the ATM network. Is that the "real world" bank deny their social role. When they were asked.00 Lived away > 1 Year Total % 63 36. Use of Automatic Teller Machines (ATMs') Never lived Away Total % 42 22. one can argue. that many of the respondents could (and therefore should) be among the target-customers of the major banks of the country. However this does not occur.54 187 100.63 109 63. and believed that using a computer to perform financial transactions is highly dangerous. after all. It was not surprising. based not only on their intention but also on their potential.00 Total Total 105 254 359 % 29. it was revealed that the inhabitants of these islands were experiencing difficulties in using most of the highly sophisticated equipment.

the new emerging marketing paradigm could thus be called relationship orientation. As Frederick et al. The 'social responsiveness". "social responsibility" under which companies recognize a wider spectrum of relationships with the different stakeholders and enhance certain levels of interaction with such groups. as Kantner claims a "successful partnership manage the relationship. Moreover. in the definition / identification of the "various participants-members of the particular network who are going to be involved in a relationship"! Who decides the criteria under which somebody will become member of the "network"? 31 .1 Setting socially responsible Marketing Objectives and Strategy In the free market economies. The real importance of company’s social responsibility has not to do with its reactions to particular facts or events. the subject of social responsibility of a particular company shouldn't be left to ones managers hands. where the companies are more open to moral issues and influenced by involving the acting social groups. business organizations are free to choose what goods and services they produce. Instead. but to their view. the processes by which they produce as well as the markets they aim to serve. to their contribution and role to the society. Therefore. taking into consideration the Social Responsibility notion. not just the deal". involved in a process based on the axioms of "mutual exchange and fulfillment of promises". It means the company's orientation in offering its products/services in a more "social way". So. a social service does not necessarily mean the offer of specific additional services to particular customers. it is important to recognize that the concepts of "social responsibility" and "any kind of exclusion" are not theoretical claims or even new. The so called "social obligation". adopted by companies which act. Therefore. it is a certain philosophy of doing business with serious consequences to society's well being.e. and finally. Relationship Marketing focuses on the creation of long-term relationship between various participants . where strength and quality of the relationship as well as the quality and profitability of the relationship play significant role. the manner in which organizations make strategic decisions. In market economies where companies do have a high degree of autonomy. but it should be the core concern behind a company's existence. becomes in itself a matter of discretion. But the question arises exactly there. "smart" ways of determination of a "competitive advantage. i. Apart from Societal Marketing. in accordance to what the law requires.members of the particular network. which should also focus on a long-term orientation towards customer satisfaction without excluding of course profitability and stable growth.Chapter 5 CRITICAL ISSUES AND TERMS 5. (1992) suggests there are 3 broad views of the social contribution of the company. So.

"customer valuation" forces to a more rationalized way of usage of the above mentioned strategic tools. 32 . As a result. community’s "well being" has to become the "compass" of segmentation criteria. The question is about the criteria this strategic decision will be implemented. Nowadays. how much emphasis has been given to the particular target markets and what balances with society as a whole? Referring to the traditional Marketing concepts of "segmenting . The traditional marketers claim that "consumer/customer is the focus" and that consumer's needs and desires are the raison-dieter for marketing (the marketing concept can be described as an integrated effort aimed at providing customer satisfaction…). the societal marketing concept holds that the organization's task is to determine the needs. we strongly believe that under the scope of re-formulating the companies' roles in society. self-concept etc).Even. Therefore. So. setting. Thus. measurable. demographics. The main purpose of segmenting is to create substantial. one could claim that the "focused targeting" is among the most successful strategic options. it requires that the business organization includes social. Is it not the appropriate time to focus on the consumers' well being and make use of the several variables according to this notion of well being? Otherwise. value is seen as something that has to be extracted from customers to create shareholder value and all customers should be shown sufficient returns to the organization. But.e. that the societal marketing concept requires the promotion of "proper consumption values" so that "long-run consumer welfare" may be attained. lifestyle. product and market planning. it is already clear.targeting . accessible customer segments in order to target effectively and efficiently in the future. this has been implemented based on product-related variables (i. one should re-define the segmentation criteria as well. wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer's and the society's well-being . the claim "consumer is the focus" is not totally true and it should be modified to "consumer of our convenience is the focus". since the customer of the company becomes the "consumer of the wealth of the organization".positioning". ethical and ecological considerations in its. product usage and product benefit) and consumer related variables (i. Although traditionally.e.

from customer support to back office to customer analytics. helping. Managing Customer experience is the biggest challenge faced by businesses today. by training both the old and newer generations of customers to be more wary and smarter. increased business and enhanced profitability. 33 . this translates into reduced service costs. Customers want to trust the companies they buy from and in some case may even value a relationship of a sort. 5. Customer 360º integrates both direct and indirect interactions of a customer along the entire lifecycle from prospecting to acquisition to service to retention while also delivering insights through customer analytics. What is Customer 360°? Customer 360º is a proprietary framework for integrated Customer Lifecycle Management (CLM) services that touch every point in the customer lifecycle of your business. retain and grow customer relationships is determined by an organization's ability to quickly adapt to changing customer needs. This demands an integrated approach to managing customer interactions. it translates into customer delight and enhanced customer satisfaction by catering to their current and future needs.5.3 Customer 360° It is in line with these needs that a concept called Customer 360° has been generated .2 Customer Dialogue Builds Loyalty & Profit Customers and potential customers are getting more sophisticated. From a customer centric viewpoint. The ability to acquire.an integrated framework that addresses every point of the customer lifecycle of a business . The very marketing techniques used to separate the customer from their hard earned money are. From a business point of view.

34 . 5.4 Inbound Customer Marketing Research Report The world of targeted marketing is moving on apace.Customer 360° comprises of: • • • Customer Interaction services Back-Office services Customer Intelligence service How will Customer 360º benefit your organization? Traditional delivery models address short-term business objectives like the need to attract new customers or provide support . e-mail and SMS all joining the fray. website. competitiveness and assured business. and insight driven. multi-stage where a number of contact events are tracked prior to making the sale. Customer 360º is an integrated solution that can ensure market adaptability.which caters to a single customer touch point. where consumers are targeted based on their predicted behaviors or the occurrence of specific events in their lives. Organizations no longer rely just on direct mail to get their message across. This approach lacks a holistic view . The norm is fast becoming: multi-channel with the call centre.in terms of customer experience across other touch points and insight into customer's needs and behavior.

However. the majority of customers are proving slow to take it up.Chapter 6 SWOT ANALYSIS OF RETAIL BANKS 6. “With the coming of CAT. The development of online banking has proved a mixed blessing for retail banks. By allowing customers to service their accounts online.” 35 . the threat is pensions mis-selling have made many consumers wary of the motivation of the IFA. A lot of the banks are interested in getting away from IFAs and owning the client directly. online banking represents a clear opportunity to reduce the costs of face-to-face banking. the selling of financial products will have to be done on a simpler. whether provided online or over the telephone. more direct model. The problem is that for most banks. providing the personal support that customers’ value so highly can rarely be justified. “free” financial advice. In the past this circle was squared through the medium of an independent financial adviser (IFA). offering free advice in return for the opportunity to sell financial products on commission. But at the same time bankers admit that the single biggest reason that customers didn’t effect was the inconvenience of changing banks. while the introduction of CAT standards for a number of financial products is cutting into the commission available to fund. However. the study suggests that over a quarter of Internet users are now using online banking. 6.” says Dave Patel of financial software developers DPR Consulting: “You can’t have five layers of people taking 1% commission and then managing that product for the customer’s lifetime. personalized advice.1 Banking on an Online Future These are the following opportunities and threats posed to retail banks by online banking.2 Cost Trap It seems that banks are caught in a classic “cost trap”: Customers want detailed. and even those who do still demand the reassurance of one-to-one personal support. one-to-one. with 63% citing responsive service and being treated as a valued customer as the most important factor driving their overall satisfaction with their bank or other financial institution. A survey underlines the fact that customers valued the personal touch. yet neither they nor their financial providers are prepared to pay for it.

Banks’ motivation to move into the provision of advice will be as much about. but in return they receive instant feedback.3 The Rewards The payback for the bank is in the amount of information about customers the online check delivers . and the withdrawal of players like First-e from the market has made the prospect of Internet-only banking as distant as the paperless office. E-commerce generally has failed to live up to expectations. and by the end will have created an online portfolio from which they can continue to manage their affairs. A financial adviser probably has knowledge of no more than 100 products. With several retail banks. A suite of products should be created which can be tailored by banks to offer a detailed wealth check to their users. Users need to spend about 20 minutes entering their details. and obviously if a financial adviser introduces business then that creates the opportunity for them to speak face-to-face with the client. but we do less advertising and pay the intermediaries what we would normally pay for acquiring customers through advertising.up to 300 items of information on employment. It’s also more personal that one can say he does not want any IT investments. Once implemented.” 6.” Ms Mackintosh says that If. and also be used to underpin the personal advice given to customers with more complex affairs. customer retention as selling products – the challenge is to be able to do it cost-effectively. home ownership and so on. The product costs the same. He believes that the answer is for banks to invest in online. In the end the customer doesn’t pay anything for that advice. or that he only wants environment friendly funds. online advice systems can be made available at no extra charge to less valuable customers.com took a conscious decision when it launched not to offer financial advice: “About 60-70% of our mortgage business comes from intermediaries.” says Angela Mackintosh.000 in liquid assets. rather than that it was what the customer wanted. marketing director of “multi-channel” bank If.” 36 . And the software will spot contradictions in his responses. “It’s like the 1980s when people did all sorts of computerised stuff on the basis that you could do it. but you have to look at the costs and benefits. “There are lots of nice things you can do online.com. This approach is most applicable to the “mass affluent” customer with over £10. there seems to be a great deal of caution about creating more and more online capability. self-service products which use knowledge management techniques to automate the provision of advice which is nevertheless personalised to the user.

6.4 Understanding Your Customer Base However, the ability at any time to drop out of the website and contact a human being is seen, as equally important. The problem for direct operators is that they are heavily dependent on branding, and therefore cannot switch advertisement spendings into customer acquisition through intermediaries. And, like all players in e-commerce, they are discovering that the opening of new channels to the customer does not necessarily mean that old ones can be phased out. There is an assumption that people who are technophiles and who use the telephone and Internet a lot will do that across the board, but that’s not so. A lot of people are happy to do their banking online but for other things they want to see someone. A lot of the basic transactional customer calls are going onto the web or to SMS banking via mobile phone. 6.5 Cautious Future Expected Banks have indicated that while online advice is something that they are looking at in the medium term, in the absence of any strongly expressed customer demand, it is unlikely to be a priority. Either way the tradition of getting financial advice funded by the backdoor looks set to continue for some time. People are not prepared to pay the money but there is a balance between paying the money and spending the time. Ultimately the more affluent will pay for advice simply to free up their time.

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Chapter 7
RELATIONSHIP BANKING IN TROUBLED TIMES
In the present uncertain economic climate, can banks and customers benefit from an actively managed relationship? Relationship banking and its effectiveness in today’s challenging economic circumstances. It is observed that despite serving the economy well, banks are generally focused on distribution at the expense of understanding the needs of their customers. The growing fears of recession may be reflected in how banks deal with their customers. It can be argued that a bank’s relationship with a customer is driven both by the current macroeconomic outlook and by the bank’s assessment of the impact of recession on the customer’s business. 7.1 Strong Power Base The “big” banks in India provide about 75% of domestic lending, and as such enjoy even greater power than their counterparts. 7.2 A Key Element In conclusion, relationship banking is the key to successful banking. The bank gains a better knowledge of the customer, the business and their needs. The customer enjoys a partnership with their bank, allowing both sides to manage issues in good times and bad. Despite technological advances and change, banking remains a people business, and the successful committed interaction of people is the foundation of true relationship banking.

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Chapter 8
CRM IN FINANCIAL SERVICES SECTOR
CRM is one of the primary initiatives in any industry and more so in financial industry sector, where competitive pressures from both financial and non-financial services are fueling the movement toward CRM as the companies are systematically raiding a bank’s territory to pick-off the most profitable customers. Thus, one has to begin with a financial institution’s strategic goals, develop a consistent technology platform that is scalable and support across delivery channels, train people at all levels and incorporate a customer-centric approach to every customer interaction. This article gives an overall picture of CRM with reference to financial service industry. Customer relationship management (CRM) is one of the primary strategic initiatives in industry today, regardless of whether the company serves retail or wholesale customers, whether it provides services or manufactured goods. In the financial industry, the movement towards CRM (also known as ERM for enterprise relationship management ) is being fueled by competitive pressures from both financial and non-financial services companies that are systematically raiding a bank’s territory to pick off most valuable customers. Although CRM is not a technology, modern high-tech applications, from relational databases, to data mining, to computer telephony integration (CTI), to Internet delivery channels, are providing the means to implement customer relationship strategies today. Estimates on the size of the CRM market vary, possibly because of the difficulty in defining CRM. International Data Group predicts the CRM market will grow from $1.9bn in1998 to $11 bn by 2003. AMR Research says the CRM market will grow from $2.3 bn in sales in 1998 to $ 16.8 bn in 2003. 8.1 Defining CRM One of the greatest problems with CRM is what it means. “The whole CRM concept means different people, depending on what they want to do,” says Jimmy Sawyers, consultant, Reynolds, Bone & Griesbeck, Memphis, TN. • Financial services that are transaction based, such as credit card companies or bill payment providers, want to manage the customer relationship to drive up transaction volumes and squeeze out expenses from individual transactions. One customer generally has one account and it doesn’t matter if others within the same household have accounts. The goal is to provide incentives that get the customer to use the service more. Transactions become commodities. The customer responds to price incentives and loyalty programs. There is almost no opportunity to cross-sell to the individual customer.

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Consultative financial services, such as investment advisors and financial planners, use CRM to deepen the trust the customer has in the service provider in order to increase the fees for services. These companies earn fees regardless of the number of transactions the customer makes. They may be able to increase their fees base by cross-selling additional financial services to individuals, or obtaining additional relationships from the same household. Retail oriented financial institution defines CRM as a combination of the two extremes- managing the entire customer relationship in order to reduce costs and increase the depth of the relationship with the customer. Generally, reducing costs means getting the customer to use less expensive delivery channels. Increasing the customer relationship means either obtaining a larger “share of wallet,” or increasing the number of fee-based services the customer uses, or both.

8.2 The Evolution of CRM & The Challenges of Personalized E-Support Historically, customer relationship management has been the specialty of community banks. Bank management came from the community. Bankers knew their customers, their families, and their businesses. Lending decisions were based as much on good payment histories as on good standing in the community. Customers gave all their business to one bank, appreciating the good services they receive as a reward for their loyalty. As banks automated back-office functions with mainframes, and the number of products and services a bank offered grew, banks found it increasingly necessary to replace branchbased filing cards with a central information file (CIF). In early 1970s, CIFs in even the largest banks were centrally located file cards. But by the mid-to-late 1970s, these cardbased systems gave way to mainframe-based, hierarchical database systems.
8.3 Customer Support – A historical perspective The Customer is King. This mantra, although used for a long time, has not been put into practice until recently. Forget the ideology of royal treatment; customers were not even treated with dignity by most organizations. As recently as the 1970s and 80s, the concept of customer support meant that organizations were doing a favor by answering a few questions for the customer on the phone – after putting them on hold for an hour! Standing in line to buy something was common and expected. Remember when the customers had to go to the airports to buy tickets only because the airlines kept them there? Organizations simply lost touch with the realization – that they existed because of these customers. The 1990s brought two new concepts that challenged the prevailing business landscape: Deregulation and the Internet. These forces brought down the barriers of entry, resulting in an environment of intense competition. Stores faced competition from on-line start-ups. Traditional bricks-and-mortar banks fought for customers with online or virtual banks. Airline tickets were increasingly purchased from the convenience of your home. The explosion in

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The customer was now truly the king. However. technical support. There were also a few problem-tracking tools for help desk such as Remedy. field support. they are not effective in meeting the needs of an organization’s strategic enterprise customers. 8. additional applications emerged in areas of customer support. and margins. Furthermore. Although these solutions provided automated self-service to customers. Customers received what they have always deserved – respect. The advent of e-CRM applications was the first big step toward providing better support to the strategic business customers. the focus of these applications is more on improving call-center productivity. The emphasis focused on expanding the consumer base regardless of positive cash flow. although always treated with more respect than individual consumers. As companies focused more on customer relationships. these applications add value and help many organizations execute their CRM initiatives. Each enterprise customer has its own needs and craves personalized support. Most of the ERP players are also expanding their solutions to include CRM. sales force automation. revenue. Customer service became the only major differentiator in many cases. and marketing automation. Business customers.4 Evolution of Customer Relationship Management The genesis of CRM (Customer Relationship Management) lies in Sales Force Automation (SFA) tools. There are a number of niche players focused only on certain pieces of CRM such as e-mail management. Clearly. among others. Companies like Siebel and Vantive (now part of PeopleSoft) took the early lead by introducing tools to help the sales personnel become more efficient in tracking their customers. The demise of many dot-coms brought an epiphany. “CRM is a business strategy designed to optimize profitability. Most CRM companies today are trying to address these four areas usually by partnering with other companies.information allowed consumers to compare features. they still treated all customers the same. Products became commodities and prices could not be lowered further to ensure survival. revenues. and customer satisfaction” – Gartner Group 41 . Companies realized that they needed to focus on their enterprise customers. were more or less ignored in the early stages of the Internet boom. marketing campaigns. and prices across multiple providers.

essentially. the core application within the CRM landscape that truly builds customer relationships is the customer service application. CRM. as described earlier. processes. order status. etcetera by logging in to the vendor’s Web site. or through the Web site. and people. While this solution works for a B2C model. Customers can look up their basic information like billing.5 Current CRM and E-support Environment There are currently over 200 CRM software vendors and the number continues to grow. there are various types of applications included in CRM suites. and suppliers in a personalized and automated manner. partners. via e-mail. by fax. there is still a lot of confusion around the concept of CRM. to enable companies to manage and increase profitable relationships with their customers. Most customer service applications now provide Web-based self-service features for companies to offer their customers. Many of these applications were initially focused on providing an environment to improve the productivity of call-centers. is a strategy that involves applications.Although there are quite a few vendors providing CRM related products and services.on a 1-to1 basis. So. Although. Enterprise customers demand personalized support in order to access their information quickly and easily. In addition. their query is prioritized and channeled through the same mechanism. whether the customer was trying to reach the call-center by making a call. They want the vendor to understand their needs. True personalization is not easy as each customer has its own needs and requirements. especially to enterprise customers is challenging. • Information Updates: As the information is constantly evolving. 8. These challenges include: • Relevant information: One major issue that most organizations face is finding information pertaining to each customer. policies. The issue is further complicated by the fact that these customers are in different vertical industries and also geographically dispersed making their requirements even more unique. some of these applications integrated message queuing functionality to provide a common environment for all channels. business context. In the era of information-glut. this simply doesn’t work. for enterprise customers with hundreds of users and hundreds of products to support. though useful. they want specific and relevant information. CRM is not just an application or a technology that can be thrown at the customer satisfaction problem to make it go away. continuous updating for customers’ reference is required. They want companies to build a strong relationship with them . information is updated on an ad-hoc or periodic 42 .6 The challenges of personalized Enterprise E-Support While certain aspects of personalization are relatively easy – such as allowing customers to create their own preferences on the Web site – the process of providing only customer-specific information. 8. Companies are trying to manage relationships with their customers. this information is buried in disparate databases and extraction of relevant information at a customer level is a Herculean task. are focused on helping the vendor rather than the customer. Most often. An enterprise’s strategic customers expect top-notch treatment. Other pieces. In most cases.

This approach is not only bureaucratic. • Personalized Applications: Some vendors offer personalized portals based on custom profiles created by users. User authentication and management can be a nightmare for vendors trying to manage thousands of users coming from diverse locations. Response times get slower and systems can breakdown. • Publishing of information: Since the information resides in various diversified functions within an enterprise. It puts the burden on users to define in what information is more relevant versus not. customers can give instant feedback to the enterprise. The solution is not just about providing support on the Web. 8. and expensive but also excludes a wealth of tacit and explicit knowledge that never gets published due to lack of tools. deployment in a personalized fashion focused just on enterprises. 43 . with real-time information that pertains only to them. organizations need to increase their focus on enterprise customer relationships. A critical challenge is to enable a process where business customers are able to truly interact with the vendors. Enterprises cut their costs by drastically reducing the number of calls into the call-center. Customers are able to get specific and relevant information -quickly and easily . • Security: Security continues to be a major issue for organizations especially for -based support. Each customer gets their own personalized Weblet. Traditionally. Although these models work for the consumer level user.7 Overview – More than just E-Support As competition intensifies. publishing was restricted to certain IT professionals and business users who typically forward their documents to these IT groups for publishing on the Web. An urgent need exists for solutions that enable enterprises to manage relationships with their key customers on a personalized basis. beyond the usual e-mail and phone options. Most esupport and relationship portal solutions are designed for enterprises to communicate to the user.basis resulting in delayed and inaccurate information and high overhead costs of updating the information. • Scalability: When hundreds and thousands of users try to get to the same information in a central database. where customers receive an autonomous and personalized environment for their support needs over the Web. Deploying a Webbased support system is even tougher. • Deployment: Deploying a CRM solution is a tough and lengthy process. they do not provide value for enterprise customers. scalability is a big issue.to resolve any problems or issues without going through numerous steps or phoning the call-center. Most of the current solutions fall short in providing a truly scalable model. Companies are trying to solve the scalability issue by throwing more and more powerful hardware at it. publishing of information is a major problem. that can be a rat’s nest if not implemented carefully. Furthermore. It’s about managing relationships with key customers. Business customers need an autonomous environment can all their users interface with the vendor enterprise and get the relevant information quickly • Communication: A relationship is based on two-way communication. Since these Weblets allow bi-directional communication.

allowing them to deal with enterprise customers on a one-to-one basis. without creating separate processes. innovative. Organizations can achieve a return on investment of 20X of their up front licensing and implementation costs. The solution enables companies to interface with multiple customers through a mediator. Example of how CRM solution works Source: Maaya solution 44 . and suppliers. The solution not only provides a major competitive differentiation. it also enhances an organization’s shareholder value. partners.The following diagram shows how solution integrates disparate databases within the enterprise and provides targeted Web-based support to the business customers: patent-pending mediation technology provides a unique. and intuitive architecture that automates an enterprise’s collaborative ecosystem comprising of customers.

The Screenshot below will provide a fuller example of how this looks: 45 .Chapter 9 The Today's Events function displays a continuously updating list of companies who have recently released market information. Although the opening page only lists those companies on which information has recently been released. This listing is updated each evening so as to keep you abreast of all the latest changes. it is also possible to list every company currently being tracked in order to get more information on what that company has been doing. Each company listed is then also hyper-linked to the latest relevant press release relating to that company.

source: financial editorial “ Money mantra”. ( Publication: vikas press) 46 . 1999 Oct.

most successful banks in India. while other execs scrutinized their feet. not for drinking coffee" was a typical example of how a mindset about customers can filter out and resist hearing ideas or concepts that do not match prior conceptions about customers. referring to their CEO. Ultimately. I felt it was okay to fill the void and speak. a firm must change its orientation and design its business capabilities. A customer vision has to be developed. 47 . did not want to hear that customers were more interested in their coffee cup holders than other attributes of the vehicle. but also what they don't do. of an ideal bank and of the ideal customer experiences during touch-point interactions with a bank's telephone contact center. the more profit you will make Eventually all companies want customer contact to be conducted at low-cost channels. The automobile company. This becomes so embedded that firms practice this without realizing it. Not many executives realised this aspect to serve customer at a lower cost.2 Retail Bank: Let's Ask the Customers At one of the largest. outside-in. rather than via highcost brick-and-mortar branches". because the more you can change customer behavior by providing a desirable.there were in a quandary because tens of millions of rupees had been expended on telephone contact centers. There are several real issues to overcome to do that. yet the volume of calls was growing at such a rate that the capacity of that relatively new equipment would be exceeded in a year or so. as an outsider. Some examined the ceiling tiles. but if they call your contact center it reduces your cost by 90 percent?" well the answer is yes.BIG FACTOR 10. No one made eye contact. "Who's going to tell him?" asked one executive. One element of this vision is what the customers' view of how the bank could provide greater benefit to them by contacting them at home (under certain circumstances. 10.1 Ten Myths About the Customers To become customer centered and customer preferred. in a survey. Besides. infrastructure. for example. "Thus volumes are growing. "We build cars for driving. decision making. The first is that a firm's current beliefs about its customers tend to drive its policies.Chapter 10 CUSTOMERS WANT. which the customers would highly value). and measures of success from the outside-in by using the customers' perspective. less-costly access channel. and not only what its employees do with customers. . how an offer of a product during a service conversation (cross-sell) would be feasible. and thus resulting in a great resistance to new ideas about customers when the old ideas are so heavily ingrained. The silence grew heavy. "If a customer comes into your bank it costs X to handle the interaction. apparently concerned that some shoelaces might be loose and in need of tying.

literal customer feedback versus intuitive beliefs formed and reformed over the years. such as those of the bank contact center. in the current environment of rapidly rising service levels. they often lack the ability to place themselves in the customer's position to envision creative new offerings and interactions that would appeal to deeply hidden or newly emerging customer value systems. That does not mean that the company has no valuable information at all. however. such desires are fast-changing and if one has no formal vehicles to monitor these. Perhaps the greatest inhibitor to go beyond "Have a nice day" service platitudes is the belief within a firm that its prior history and years of experience result in perfect knowledge of what customers want and do not want. exactly what customers wanted. and product or service offerings." However. customerfacing personnel can be a valuable source of information regarding the performance of current processes. over time it can become less clear which of your beliefs regarding customers is actual. Even if known once. arguably one of the most rock-solid examples of a commodity. while front-line employees may know what customers like or dislike about current products and services. then do not know them. there is no other substitute. outside-in vision of business from a customer can enable it to stay up with newly emerging needs and wants and to overcome the myths that currently have an impact on the organization’s effectiveness. Myth 1: Customers want the lowest price—period. in fact. In many cases these can be leveraged to provide great value to differentiate a firm or product and can often warrant a higher price. By probing directly with the customers why they want things—and understanding how customers get value/benefit from the things 48 . channels. and then lower the price to drive additional sales and "make it up on volume. is that the information still come directly from the customer. Myth 2: We know what our customers want (or don't want). The result can be a strongly held set of beliefs. Customer complaints and customer service contacts provide excellent feedback on what's not working. The important thing in those cases. not from one’s intuition due to years of "being in the business. the firm has been in that business for (number of decades here) and no one knows their customers better than they do. The fact is that the savvy business can differentiate even a roll of steel. Ten common myths about your customers. customer-defined future vision of the firm. that are rigidly driving the wrong actions. A powerful concept to remember is that a product or service offering is rarely a commodity that can only be differentiated by price. Virtually every firm at one time has felt it could skip the development of requirements via "customer visioning" and go straight to implementation of new processes and channels for customers." Consider how to attract and retain customers on a value proposition other than price: The value-added expert advices that can be given to help the customer better use that product. Front-line.Securing an actionable. although the competitors offer a lower price. There is. After all. The traditional way to compete with a commodity is to lower your cost of manufacturing. someone else who better knows what the customer wants—the customer! In order to develop an ideal. Finally.

" But that is not because customers lack the capability to envision things that do not exist. and dislikes onto the customers. I see that you are an avid golfer (perhaps Thompson used his credit card to charge a set of clubs or a golf cart rental). As with all these items. besides. which brings us to the next customer myth. Always. likes. focus groups are a waste of money and. As you may know. and from a customer. customers in visioning workshops for many different industries have stated that the primary problem with being contacted at home is that it is almost always by a blanket marketing program and not targeted to their specific interests. Before we end our discussion. "Eureka. Customers hate to be contacted when the call has nothing uniquely to do with them. This wonderful myth is born from many firms expending great sums on research. Sony could have arrived at the same idea.they want—it is possible to jointly envision and develop creative. but is merely part of a mass-marketing campaign: "Don't call me about your great special on boat insurance if I don't own a boat!" However. mass-market. if a customer owns a particular investment product and something happens that could impact them personally—perhaps new legislation that could have tax implications— they would actually appreciate receiving a targeted. Probably no customer spontaneously may have said. This is a common misconception resulting in missed opportunities in all industries to provide great customer value during touch-point interactions." Myth 5: Customers do not want to be sold to. As the banking client learned. probably earlier. no Sony customer ever envisioned the Walkman. new breakthrough ideas. including focus groups. it is because market research techniques often do not generate a line of thinking that breaks the person out of using only currently available and existing things to develop their vision. "Mr. With such approaches. Second. envisioned the Sony WalkMan. not customers. our travel service department has a special offer for two nights at the 49 . And with such approaches. never try to sell a customer something until you have handled—to their satisfaction—whatever the issue was for which they originally called. Rather. The risk with this one is twofold: First. never make a generalized. when they telephone for service. Anything. there is both opportunity and risk involved. any business can. I'm glad we could resolve that for you. It may be true that engineers. In fact. blanket offer. it is unwise to project one’s own personal prejudices. Myth 4: Customers do not want to be telephoned at home—always. personalized. Thompson. can be disappointing and ineffective. it is almost always appropriate to make them an offer as long as it is tailored and targeted to their personal interests and values. Myth 3: Customers cannot envision what does not exist. individual-specific contact. done the wrong way. and sitting for hours behind one-way mirrors watching ineffective focus groups that yield little of value. I want to take my big console radio and strap it to my head for music while I am out jogging—if only engineers could reduce the size of the components and then come up with cool-looking headphones. The opportunity here is reciprocal: After the customer's issue has been addressed. "Except during the dinner hour.

Would you be interested?" Myth 6: Customers do not want to give us information about themselves. For example. that should occur with no more than one transfer. and customer-specific interactions. but also your market Myth 7: Customers who call hate to be transferred. can actually increase loyalty. Customers are often delighted with how a firm responds to and corrects a mistake. the term tailored and personalized crept into their vocabulary by the late 1990s. and plain old irritation at being contacted by someone who has obtained one's phone number. customers repeatedly say that the most powerful thing a firm can do after an error is to admit it—and apologize. or Internet address. Customer 50 . culturally. And to receive the benefits of targeted. During the early 2000s.00 next weekend. identity theft. the firm must secure the data (with controlled. While this statement appears to be intuitively correct. In today's world there are well-publicized and growing public concerns regarding the use of personal information. they do not expect the first person who answers incoming calls to also be an expert in all things. the reality is actually counter-intuitive and it depends on why they are calling. individualized. they only want some form of personal compensation or concession for mistakes. However. However. customers will share information with you. These include. a transfer of their call can actually reassure them they are going to the "right" person who has the expertise. If a customer contacts for general information regarding your business. and role-appropriate access) and then use it only for the purposes for which it was provided. prices. In this case. This is almost universally incorrect. breach of confidentiality. with free golf. products. A common myth that drives the behavior of customer-facing employees is: Our customers don't want an apology. postal address. Personalized interactions can literally become your most powerful loyalty generator. the apology should also be accompanied by assurance that action has been taken to insure the error will not occur again. Myth 8: An apology is never enough (so we don't do it). However. and so on. and some well-earned trust in your brand. they may well expect to get an answer from their first point of contact. real issues of invasion of privacy. In return. This is a highly volatile and critical issue that represents both opportunity and risk to the extreme. followed by a letter from management that the reason for the mistake has been determined and that corrective measures are now in place. For example. However. employee-only. if they want expert advice. in order to have the greatest effect. for only $99. In many businesses that myth is not only accepted. you can lose not only your customers. In fact.Hilton in Myrtle Beach. an apology during the customer interaction. but if you misuse customer information and lose their trust. but are certainly not limited to. customers also place a high value on the benefits and value they can receive (see Myths 4 and 5 above) from targeted. for fear it would only encourage the customer to feel aggrieved and would somehow later be held against them. personalization moved from a distant rumble of occasional customer delight to a roar of expectations. With these assurances. but it is an actual business practice to never admit or take responsibility. personalized products and services customers must now enable their vendor with relevant data about themselves.

industries. it can progress to "run. These firms are also the ones less likely to have processes and competencies for listening. industry. It's that 30 percent of variability that can still kill the business. e. but to attract and retain each of them requires a dramatically different offering by the industry. It assumes that product expertise equates to also knowing what is best for the customer. or geographies. "What They Need: Customer Visioneering"). due to their product expertise. need). Within an industry. This myth or misunderstanding is tightly linked to discussions that firms founded on their own internal expertise and product knowledge often continue to believe that. we also find that approximately 30 percent or so of the actual customer needs are often unique to a specific industry or customer set. financial services where older people value safety over growth and younger ones tend to prefer taking risks in order to attain growth. even the companies that listen to what customers want almost always lack the insight required to know and fully leverage what the customer actually needs and would most value. or geography are unique and quite different from those of other firms. Both groups need growth and safety. . Beyond the prioritization or importance weighting differences. and that underlying benefit is why they NEED it.2 However. customer segments will tend to have similar needs but different priorities. Understanding what they want is good. although it is a need shared by both. not only the company. timely access to their vendors.. This is quite different from the issue of what customers want. • Once the firm can "walk" and provide such basic loyalty-driving needs. and easy. firms with extreme product competence may be even less likely than others to know the (changing) needs of their customers. This is because only the customer completely understands how they get value or benefit from something they want. Myth 10: We know what our customers need (not want . 51 . Another common misconception is that customer needs for a given firm. Beyond that. In fact.defections in those instances were actually less than the defection rate of customers who had experienced no problems at all. Virtually everyone needs responsive service. Understanding why they need it is critical to creatively develop new products and services to better meet those needs. future products and services (see Chapter 9. And that is why the customers. understanding. The customers of an accountant will more greatly demand precision than customers of a hair stylist. must be included in creative visioning of needs-based. and responding to customers in a rapidly changing environment.g. irrespective of industry. Myth 9: Our customers and their needs are unique. the customers of a stock brokerage will place a higher priority on quick and easy access to placing their orders than customers of a locomotive manufacturer." via market research to determine the 30 percent or so of unique needs and any prioritization differences that may be necessary to attract and retain segments. they are the experts on what customers need. it is dangerous to then assume that when a business model is successful for one customer set that it can be cloned as "our standard set of corporate processes" and will work around the world. • However. . What is important here is: • A firm can begin its customer journey and focus on some basic needs that are relatively common to all customers (and which I will share with you in the next chapter).

and actually appreciated the call? Why? What was it that you valued greater than being undisturbed? Have you ever received an offer or proposal. would you be comfortable with and trust the answers you get? Do you think the above is true only for financial issues. advice. can you envision teaming with a vendor and discussing why you want what you want and then together envisioning new ways they could better provide that benefit? Could a firm that offers this steal away your business? • What about your customers? • Would they answer the above very differently? • Are you treating them differently? 52 . or would you need to apply your knowledge of why you need things and how you could get the greatest benefit or value? For example. do you expect the first person that answers the phone to be able to answer questions or handle issues on any topic? Why or why not? If you need advice on a complex matter such as investment products. at home. to be offered something (such as a product or service)? When you contact a business. although you originally initiated the contact on a different subject. when have you bought something and known a similar item was available elsewhere and cheaper? Why? What was it that you valued greater than price? Have you ever been contacted by phone. how secure are you that a salesperson can also give you accurate technical advice about the electronics under the hood of your new ZOT 12? Would you be happy if a single transfer could get you from the salesperson to the right technically knowledgeable person? What if a business made a major mistake with your account? Would it be important to you that they apologized? What if they did not? What if they would not even admit to the error? Can a vendor best envision new products or services to meet your unexpressed future needs.Exercise: You Are the Customer What about when you are the customer? Do you always search out the lowest price? And do you always then purchase from that lowcost provider? Always? If not. and counsel? Or is it also true for other businesses—such as yours? For example. do you expect to be transferred to reach an expert on that subject? If you were not transferred to someone who specialized in such a topic. and appreciated it? Why? What makes it okay in your mind. even great.

3 Five "Doing-Areas" We can categorize what customers want to do on the Web under five "doing areas. The survey showed that the provision of quality information is the most important attribute of a vendor's site.What Customers Want 10. They're likely to look at parts of the site that give them an idea of what the company is up to. information on a company when they are new to the market for a product. and evaluation of. like brochures. Stay tuned in as e-customers. 2. 4. How well the company has used technology will give customers an idea of how switched on it is. Of course. 5. they may actively seek out information on a particular incident or company activity if it affects their preference for that company. depending on where they are at with what they're trying to do. Customers want to make sure they like a company enough to do business with them. Sometimes that evaluation will result in a sale (either online or offline) and sometimes it won't. from evaluating businesses and products to becoming customers to receiving after-sales support and information 1. Select products and transact with e-service providers. as part of their decision-making process. the greatest cause for customers to leave a site is not being able to find the information they were looking for. but it is all critical to the decision-making process. Customers will operate in one area more than another at a given point in time. a company must be the type a customer is looking for." as follows: 1. Customers may also evaluate product information available in other forms. EVALUATE COMPETING BUSINESS AND PRODUCTS Customers have to decide between businesses and products. However. Evaluate competing businesses and products. 3. Customers will evaluate different products offered by one company and by different companies. Customers who already have dealings with a business are less likely to actively seek out their general company information. In addition. Get help. The search for. We can think of the five areas as a rough progression. When deciding among businesses. Potential and existing customers will get a feel for a company just by being on its Web site. and evaluate. product information is key for new and existing customers. Provide feedback. Web sites are a part of that decision-making process. How customer-centric the site feels will give them an idea of the quality of the customer service they can expect. Customers are more likely to actively search for. 53 . The importance of being able to find useful product information has been reinforced in GVU's tenth user survey. customers will either actively or passively get information from a company's Web site. These five areas are all important. and must offer the type of products a customer wants.

By changing the variables and running the process a few times. customers are pretty single-minded. 54 . This can make it difficult to direct and respond to customer questions. and a business. 2. They will make selections to personalize their experience and the services and products they receive. and they may do that right then and there on the Web site or come back a few times to try things out. when they register to receive particular information online. You can lead customers to ask more meaningful questions. Sometimes that is simply information. you can't tell customers everything they need to make a decision. The tenth GVU user survey showed that Web users can spend up to half an hour looking for the information they want. and how easily they can get it. if you give them some simple selections to make when entering their comments.Customers' evaluation of product information is not about passively viewing product blurbs. they give you something in return for a service. that selection will lead to a transaction. to find out how much it will cost them. This transaction may or may not be financial. In these cases they will ask you questions or request more information. over a certain loan period. This can take many forms. The more usefully interactive product information is. and they're unlikely to give you a whole lot of background information when asking questions. the more the customer will use it. sometimes this makes inquiries easier for customers. They will enter information to get a personalized response. SELECT PRODUCTS AND TRANSACT WITH E-SERVICE PROVIDERS Customers are faced with a lot of choices when they go to a Web site. the more likely they are to spend time evaluating them. to find out what suits them best. and they'll come straight to you and ask for it. Customers are quick to use any sort of useful interactivity to get a better view of what a product offers them. chances are customers will abandon your Web site for someone else's. And sometimes. At this point. Customers will provide information on themselves to get an intelligent response. Mortgage calculators provide a good example of useful interactivity. and the various features they require. Customers seek out product information and interact with Web sites. Sometimes. When customers transact with you. Customers will take time out to evaluate products. And they want as much help doing that as possible. The more useful the information. customers get a good idea of what they're in for. In fact. Or customers may not be able to locate the information they need. That selection will comprise the choices they make to get around your site and identification of the things that they want or that particularly interest them. for example. not just strictly mathematical as in the mortgage calculator example. how much that will cost. This may involve choosing a particular product there and then or setting themselves up to receive information and services later. Customers enter the amount of the desired loan. They want to compare the various scenarios they've generated and the responses they've got. If product information is not useful.

if they have a problem that can't be easily resolved online. Customers will interact with your site to: • Work out how to use your site. They also use tools that help them receive personally relevant information and services. • Find out where to go. 4. such as site maps. Customers will also seek out help on different levels: getting around the site. evaluating what is best for them. and solving a particular problem. Customers will complain and unprompted feedback is usually negative. And don't forget. such as entering personal information to create profiles and receive personalized content.Customers have to select the path they take through your site as much as the particular services and products they want. as part of their evaluation process or after they have made a selection and transacted. search functions. Customers sometimes want to provide feedback on an experience they've had with you. A Web site provides a medium where people can have a good moan without having to talk to someone in person. • Resolve a problem online. oftentimes. and getting the best out of something. this only comes from talking to someone. then. Customers want to learn how to get around and optimize the use of your site as quickly and easily as possible. When making their selections. 3. This may be voluntarily provided by e-customers (unprompted) or solicited (prompted). It's unfortunate because it can create a skewed view of how well you are doing 55 . a Web site is only part of a customer's experience. unfortunately and fortunately. customers rely heavily on tools to seek out personally relevant information. PROVIDE FEEDBACK Customers will provide feedback. They are using your Web site to create a context that is relevant to them personally. E-customers will find Web sites irrelevant and intrusive if they do not receive something personally relevant and useful in return for the information they have provided. based on facts related to their own particular situation. E-customers are more likely to provide personal information on Web sites that clearly offer valuable and useful information and functionality in return for the information they have provided. and shortcuts. indexes.GET HELP Customers may seek help at different times. Selection. or whom to talk to. or in general. Tailored advice is still very important and. is the process of personalization. • Find out how something works once they have it. Personalization should allow e-customers to modify the information and functionality they receive on Web sites. either on your Web site. Customers may also seek help outside of your Web site. Personalization is an all or nothing proposition.

Seeing the difference the feedback makes may be enough for a customer. and they'll state it in simple terms they understand. Customers are more passive when it comes to prompted feedback. again. • Get the most out of the product they've purchased. And. What they want to do will comprise getting around a site and making use of the content and functionality it offers. 10. and give them some guidance on what you want to know. "Your Web site stinks" might be all the feedback you get after a customer has spent half an hour unsuccessfully trying to do something useful.4 Seventeen Customer Directives. For example. if you prompt feedback in places related to specific things you know customers are trying to do. STAY TUNED IN AS E-CUSTOMERS The level of day-to-day involvement e-customers have with businesses as e-service providers will determine how much they want to "tune in" to their Web site. 5. Those customers still need to see payback for time spent. It also gives you a chance to get things right where you may not have otherwise known something was wrong. or requests. they just know what they want it to do. because customers don't understand the way your Web site works as well as you do. However. they will still use your Web site to: • Access and maintain any information they've given you or that you share as a result of your service relationship. a bank's customer is more likely to want to use a Web site for frequent transactions than a computer supplier's customer who may only purchase once a year. However. This payback does not equate to a bribe either. customers will give you information. • Access special deals or offers. There are some complaints.CRM When we get in the way of what customers want to do on the Web. You may never find out what the customer was trying to do or exactly what went wrong. they get frustrated. let's not forget that a Web site is only part of a customer's service experience. in relation to a whole range of Web sites and industries. 56 . Customers may have relationships with people within the service-providing organization. provided they get something worthwhile in return. A customer who is very involved with your company or your product may want to have some involvement with the decisions your company makes. Feedback on your Web site may not be particularly helpful.evolution of E. and these are also an integral part of day-to-day support. Even if customers are not transacting with you on a frequent basis. you're more likely to get useful feedback. • Be sure they've gotten the best deal you can provide.and fortunate because it provides an outlet that customers may not otherwise have. Customers don't know all the marketing and business reasons behind the way a business has done things.

Also. Multiplicity Another common frustration is taking one path to find information and then taking another. and these customer directives will set a frame of reference for later. Sometimes it's just obvious that that part of the site is under construction. Customers feel that companies should make the effort to complete each page before offering it online.However it does not imply that customers will be equally frustrated by all these blunders. If businesses and Web site designers are aware of what frustrates customers they will be more likely to direct their energy into areas most likely to result in customer effectiveness. This is particularly problematic in relation to calculative or scenario-based functionality. and the performance of the system in general. The following customer directives will give some triggers for thinking about all of the factors that contribute to a frustrating customer experience. Dead ends It is surprising the number of times a customer comes to a "dead end" on a Web site. Under construction This doesn't necessarily mean that a business should refrain from presenting a page that is "under construction. customers will take the Web site on balance. They will be most frustrated by what gets in the way of the things they want to do the most (and this will change depending on where the customer is at). All of these dynamics will be explored in depth in this book. where the customer sees quite different variables and considerations leading to exactly the same outcome. Slow download speed is still rated by customers as the biggest negative in their experience of the Web. a point where no new content is delivered. the content that ends up there. Customers expect different paths to reflect different customer needs. that's a given. If they are provided with some very useful things. but they live with it. only to find yourself receiving exactly the same information. Customers get mad when they wait for a page to download and then find there's very little on it. On the Internet we have to wait for things to download. 1. A page should not be offered if there is no new content available on it. If the outcome is the same for all the 57 . the visual interface and interactive functionality. Customers will feel cheated if they spend time following a path only to find their ultimate destination under construction. It should Be Worth the Wait Everything we offer on the Web is subject to higher expectations because customers have to wait for it. they may put up with some blunders and learn how to get around them (but that's not an excuse for making the blunder). This is especially true of Web sites where a standard navigation (such as frames) has been used across all product content. and they get annoyed when they find the same information having taken different paths." but it does need to be handled appropriately. the thinking and planning that goes into a site.

nothing more. The level of annoyance would be even greater if it was something fundamental. Customers need to make an informed decision of whether or not it is worth their while to head down a particular path or partake in a particular process. The download takes about five minutes." chances are. worth the wait. The more we can tell customers about the consequences of their actions. TV is a better medium for the ad anyway.different variables. Customers will see anything that doesn't exist for a reason as gratuitous. And "telling" a customer what's going to happen. to complement the ads. Blunders Navigation leading to nothing Say a Web site offers "tips from other customers" as part of the standard navigation for evaluating products. Worthless downloads Consider a company who has run a series of TV ads and has decided to profile those ads on their Web site. therefore. or is happening. Blind action and hidden consequences Unfortunately. we often don't make a certain path clear to customers and they don't know what they're committing to when taking a certain action. 2. only one in five products actually has customer tips associated. Customers who complete the download find it to be a reproduction of the TV ad. This will get annoying after a while. Customers can click on a picture of a screen shot from each of the TV ads and this starts a download. The result of an action isn't always clear. will involve written and visual cues. why would a customer bother going through the process of generating scenarios always to end up at the same place? Gratuitous content and functionality Download time also makes customers more sensitive to time wasting. they just want these things to be a worthwhile part of the journey. 58 . After all. This means that customers will not try the action or will try it and be disappointed or confused. and. They wonder why they bothered taking the time to see something they've already seen on TV. It's just physically impossible. They expect the Web site to give them more information. When the customer clicks on "customer tips. like product prices. nothing less. What Customers Get If They Do This Web sites can't show everything all on one level. there won't be any. not just reproduce them. that was sporadically available. This does-n't mean they don't want graphics or other interesting and creative devices on Web sites. However. the better. We have to put different information on different levels and give customers paths to navigate their way through it.

offer registration. Blunders Blind registration A researcher comes to a Web site to find out about a particular piece of research they know has been completed by a research organization. Many customers also aren't comfortable with performing downloads. they feel they don't know enough about what's going on. Irrespective of this. they'll be disappointed. one for clients and one for a complimentary account. because they expect it to give them access to the piece of research they're looking for. This might result in customer delight if they are eligible for more than they expect. but are prepared to register and pay for the research if necessary. and this will prevent some customers from purchasing online. Some customers will venture a download. chances are. On coming to the Web site the researcher finds that the information they want is not publicly available. (It would have been five or six if someone else had chosen the same username or password as they did. There are two types of registration. but don't know exactly what that is until after the transaction. but they need to know exactly what's involved up front and receive help along the way. but they can't access the full transcript without client access. it finally becomes clear to the researcher what they are eligible for. The Web site does. Hidden time requirements Some processes take up a lot of customer time. Also. they want to know what the process is and need help every step of the way (including confirmation of a successful purchase at the end of the process). It turns out that they can access the research they want. however. but the customer doesn't know that up front. The researcher goes through four screens to complete the registration process. 59 . They are not a client. Downloads are particularly problematic because of the time taken to complete them.) On completing the registration process. Customers often feel uncertain about what's happening to them if they don't understand the steps they're going through. This lack of understanding sometimes results in fear. but.This is particularly problematic when customers become eligible for something as a result of a transaction. as such. but they get angry when things unexpectedly pop up along the way. There is no explanation of what the registration processes will offer. when customers are considering whether or not to purchase online. the researcher is willing to register for a complimentary account. Customers don't mind investing a bit of time if the payback is good.

Figure 2-1 60 . what they had to do to get the information they wanted. up front. is worth all this hassle. The sequence the researcher goes through is shown in Figure 2-1.The researcher now has to go back and find out what is required to qualify for client access. if they can actually get hold of it. They are perturbed that they didn't know. Let's hope the research.

to save them from reeking it each time. The customer would have to select the exact place they are calling from the drop-down list to find out the time there. as well as later on. or a drop-down menu. The customer is confused as to why the tool couldn't tell them the time at the place they were calling at the same time as telling them the cost of the call-they had already provided information on where they were calling. 4. Blind Registration Sometimes customers want to be anonymous and sometimes they want you to know exactly who they are. they expect the information they enter to directly affect the outcome. and they give you personal information the first time. where people agreed strongly with the statement that they valued their anonymity on the Internet and enjoyed online shopping because of the absence of sales pressure. They find a calculator that allows them to enter where they're calling. Problems arise when we misjudge when people want to be anonymous and when they want to be identified. Web sites sometimes don't make it clear whether customers are anonymous or not. This is likely to be later in the process when identification benefits the customer. they wonder why you needed it in the first place. In addition. Figure 2-1 Blind registration. Customers have to use what is generally given If you ask customers for information. Additionally. Customers can sometimes incorrectly surmise that they have been identified. and also presents a drop-down list from which the customer can select the time at various places called. and when. Customers get frustrated when they enter information and it doesn't change the outcome. customers expect Web sites to remember things so they don't have to tell you the same thing over and over. Customers use their anonymity as a basis for getting impartial advice and information without any sales pressure. This is particularly true when customers transact-if they seek to do a number of transactions sequentially.3. If customers are using functionality. This applies to information that returns a response then and there. Blunders Go-nowhere selection A customer wants to find out the cost of a phone call to. if customers want to transact with you. and then you don't use it for anything useful to them. 61 . such as a calculator. The importance of anonymity is reinforced in GVU's tenth user survey. part of the United States. The calculator returns the cost of the call. Forcing customers to identify themselves too early in an inquiry process could prevent them from going through with it. to find out the cost of the call. they may well want you to know who they are. Similarly. if customers give you information about themselves during their Web-site experience. and then get disappointed when they don't receive personalized information. they expect you to use it in some way. say. they expect you to remember it. However. to create outcomes from different scenarios or selections. and if they have a history with you. This tends to be early in the process when a customer is evaluating alternatives.

and they have to rekey it. They then realize that they also need to sign up for the call plan that goes along with the mobile phone. If the error messages or the forms aren't very helpful as well. They go through some scenarios on the Web site to work out what they need. They go back to fix the form but find that some of the information they filled in the last time has disappeared.Insufficient memory A customer wants to buy a mobile phone. The customer clicks through to purchase the product but finds that the form needs some information identical to what they've already entered." The customer submits the form to sign up for the call plan but they get an error message telling them that they haven't filled the form in correctly. 62 . and rekey. They then fill out the form to purchase the product. this customer could end up going back and forth a number of times to rekey. Chances are that this will be the last time they try and order something on that Web site. Now the customer is really annoyed. rekey. OK so maybe they can live with that. they go on to sign up for the call plan they want. They get a form to sign up and discover that a lot of the information they just filled in on the previous mobile phone form hasn't been captured in this form either. The Web site recommends a particular type of mobile phone and the customer decides to get it. Having ordered the mobile phone. The sequence the customer goes through is shown in Figure 2-2. "This could have been easier. By this time the customer is getting a little frustrated and is thinking.

they expect to be able to learn more. It also sticks out like a sore thumb when known parts of the business or product offerings are obviously excluded from the Web site. not repeat everything they've already been told without offering anything new. 5. Customers expect businesses to tell them more than what they already know. this directive is largely to do with integration. Of course. Customers expect to be given more Because Web sites are not the only medium that customers have to find out about companies and their products. integrated marketing and customer service. 63 . If customers already know your company.Figure 2-2 Insufficient memory. And this is something we will explore in more detail later in this book. they expect Web sites to "make sense" in relation to all of the dealings and exposure they have with a company.

But. and that relates to consistency in visual presentation and access as well as it does to the nature of the content that's provided. Having evaluated the first one. The customer then has to work out which of the previous four checking accounts these three options relate to. Insufficient interactivity A customer who is evaluating different mortgage options goes to the Web site of a financial services provider.Blunders Incomplete offering Consider a telecommunications company that offers connectivity to the Internet through an ISP (Internet Service Provider). They then find out. and so on for the seven checking accounts available-forward and back seven times. so they go there. However. or maybe even packaged. 6. Blunders Difficult product comparisons Consider a customer who wants to select a day-to-day checking account. and yet the customer finds that the Web site does not relate those products at all through content or even basic navigation. The Web site does not provide the customer with information relevant to their particular situation. Inconsistent product information Customers get frustrated when product information is presented in such a way that it makes a valid comparison difficult. A customer goes to the company's Web site to find out about its ISP's rates relative to their current ISP. they still can't understand why there are two Web sites. they detail the different ATM and card options. The customer has already gathered information from a few other Web sites and is hoping to be able to decide among them. Customers make Comparison Customers evaluate products and services against each other. But. those products may be offered by one company or across companies. by the service provider. The customer starts off with a list of the accounts available and clicks through to evaluate the first one." that the ISP has a separate Web site. The customer is baffled and confused as to why such a relevant service would be missing from the Web site. Customers also want to compare the value of the different information offerings on your Web site. Some products are obviously related. On visiting a site they find information on a range of checking accounts. But then the customer realizes that the last three accounts are actually complementary to the checking accounts. Both sites may represent two companies. but they're all part of the same service as far as the customer is concerned. mysteriously the company's Web site makes no mention of its ISP. in "other links. Ignoring relativity Customers also struggle when Web sites ignore obvious relationships between products they are evaluating. when the customer gets to this particular Web site they find the available information to be nothing more than what they already have in the provider's brochures. It would have been helpful to evaluate those options at the same time as evaluating the checking 64 . the customer has to go back in order to click through to evaluate the second one. Lack of consistency in how product information is presented makes comparison difficult for customers. Chances are that this company will not win the sale as the customer moves on to check out the next Web site.

none of those services can be clicked on for more information. However. The customer starts to go through the list. However. Each of these Web sites is completely different and each seems to be more of a brag book for a subsidiary company or department than a guide to products and services. The customer decides it's probably quicker and easier just to call the head consultant on the project already completed to find out what other areas the company may be able help with. evaluating services on the Web site would be a labor of love. Now they click through on "products and services" and get a list as long as your arm. The sequence the customer goes through is shown in Figure 2-3. Given that this customer is in the United States.S. the list appears to detail every service and sub-service available. they select the U. The customer goes to the consulting company's Web site and clicks through on "products and services" to get a list of broad service areas. Company structure versus product comparison A customer of a global management consulting company receives good consultancy advice on a project and wants to find out what other areas the company could assist with. the customer finds that each click returns a new Web site-one for every service (each with its own home page). Web site. clicking on the ones that look interesting.account. plus a lot of other items that don't even look like products and services. The customer then goes back to the home page and realizes that this is an international home page and that they will need to select a country-specific Web site in order to get information on services. not to mention being able to get between products without having to go forward and back all the time. 65 . Needless to say.

a printer. From the product page the customer clicks through to a page that allows them to choose the printer model. Missing facts Continuing the above scenario. and they bail out of the process at that point. probably because each printer must be packaged with software. without realizing the fundamentals of what it takes to make it successful. By identifying with some problem scenarios." but unfortunately no prices are given for the different printers. Creating a home page has become quite a common concept-and maybe that's part of the problem. 8. The nature of these fundamentals will depend on the service being offered. the process has to be user-friendly as well. Personalized irrelevance is never going to be relevant. To work well. The customer feels they can't possibly purchase a printer without knowing how much it is going to cost. the customer receives some recommendations. Blunders Inappropriate timing Consider a customer who is evaluating products offered by an electronics company. when too much liberty is seen to be taken. 66 . only to find them ambivalent toward it (or. and what you know from a customer's Web site behavior may not tell you enough to second-guess what makes them tick. Customers make Decision by analyzing the Facts Customers are likely to feel like they're being subjected to a hard sell if they do not have sufficient information before being faced with a decision or an invitation to purchase. disdainful. thus making each combination a different price. Here they are again invited to "buy now. Remember that their use of a Web site is only part of their whole experience. Customers just can't be bothered with the process of personalization unless they get something that's useful to them. one way or another. And. Customers do not want to go through a painful process to create something that may not end up being useful to them. a list of software and hardware products with a brief description of each product. There will be some fundamental information that a customer wants before deciding whether to purchase. People take an idea that may have worked on another site and apply it to their own. The customer interacts with a tool that helps them identify some solutions to common desktop publishing problems. the customer chooses to ignore the inappropriate invitation to "buy now" and clicks through to the product page for one of the recommended products." The customer feels uncomfortable with the process at this point because they don't feel they know enough about any of the products to purchase anything at that point. personalization is dependent on what's being personalized.7. Personalization Many Web sites invite customers to personalize content and functionality for their own uses. The better we know our customers. Everyone is limited in their knowledge of the customers. Customers want business to know their Needs Customers make brilliant and smart use of the Web. the more we can directly address their needs. of course. One be very careful assuming you know what customers need-what they need to know or what they need to get. Next to each product name is a button inviting the customer to "buy now. But sometimes we need to remind ourselves of the obvious because lots of Web sites just aren't getting this right.

This type of decision support is an all-or-nothing proposition to the customer who would say. The results come back as a list of different types of marketing approaches. who their customers are. The customer decides that the tool doesn't know enough about their business. and some Web sites will offer content and/or functionality to help them make the best choice. Personalized irrelevance Apparently. In the meantime. but sometimes this help is couched as "customized solutions"-generating solutions on the basis of customer needs. or find them a waste of time and space. the more we can directly address their needs. and find out what we don't know. before we start making recommendations. etc. but the customer is unlikely to go back to the Web site for advice. That's fine. the better we know our customers. the site offers content areas that don't really seem to relate to what this customer wants to do. if we ask customers to select the things that they find important. what you are likely to spend. the extranet is aimed at sharing privileged information with the industry's top decision makers. The customer finds a section on advertising and promotion right away-it's obviously a hot topic for small businesses that have tight budgets and need focused results." Hopefully. before making recommendations. The customer goes to one of their favorite Web sites. it didn't take a lot of time to go through. "Either make a recommendation based on adequate knowledge or don't bother making a recommendation. Why? Because. which has a center just for small businesses. If we base our recommendations on a good dose of Web site behavior. Customers may find these useful. the products they sell. or identify with. a long list it seems. However. Also. So we can make recommendations on what we know we know. or haven't. if customers' needs are not well understood. rather than take the liberty of second-guessing their needs. we should). and how well you pitch yourself against your competitors. quality information and leave it up to them to make their own decisions. worked in the past. be ambivalent. it is better to provide customers with adequate. then we might have a better chance of being useful. care needs to be taken not to make the worst of a good idea. this directive will become less needed over time as we utilize the Web to better understand our customers. to state the obvious again. The customer makes a selection under each of these areas and clicks on "solution" to get some advice on the type of advertising and promotion that might work best for them. And sometimes we don't know them as well as we think we do. Decision support Customers want to find out which product or service is best for them. Blunders Ill-informed solutions A business customer wants to evaluate the types of advertising and promotion they should be engaging in.Recommendations Many Web sites also make recommendations to customers. things that have. Fortunately. as CEO. we do know what a customer has done on our Web site (well. The customer is given three areas of selection: type of business you are in. geographic considerations. The Web site says that it can offer helpful advice and solutions to small businesses. or know about. and a lot of the approaches don't seem that suitable. In general. we will also have a better chance of being useful. the site assumes that personalization 67 . Unfortunately. For example. The tool hasn't told the customer any more than what they already knew.

Customers also get frustrated when they can't access their personal information online. The things they want to do are likely to fall into one of the five "doing areas" identified earlier. Lack of utility One of the most common areas of customer frustration is not being given access to people within a company. The level of that frustration will increase if those transactions are routine and frequently performed. Often the necessary utility is buried deep in a site and the customer has to ferret it out. and no capitulation is often taken by customers to be inferior customer service. A Web site that only gives a generic e-mail or mail address or phone number. Some Web sites don't even provide obvious links to frequently required utility. Needless to say." However. That information can be cut many different ways. access to personal information is a lot easier than it sounds. Customers expect to be able to get closer to the company they're doing business with. they may even know the name of the product they want (which is no small feat if brand names are given 68 . Frustration also commonly arises when customers can't transfer their everyday transactions to the online medium." What I can say is that. and anyway. Frustration increases when customers are very familiar with a company's products. They want to go straight to the object of their desire. few Web sites classify information on the basis of what customers want to do or tasks they want to perform. everyday transactions.of the extensive database of articles will deliver most of the site's value. keen to discover "one best way of doing it. when information classification gets in the way of customers doing the things they need to do. and the particular approach adopted may help or hinder customers. Obtrusive content Customers get frustrated when they come to a Web site already knowing what they want and end up going through an interminable process of unnecessary persuasion. There is a lot of debate over the most effective way to categorize information. on the face of it. especially if they think it is required to perform routine. I can't say there is "one best way. they get annoyed and frustrated. Information classification Information has to be classified into areas that customers can access. Customers generally don't understand the complexities of providing access to internally held information via the Web. this CEO can't be bothered trying to find some content that might be of interest. While this type of personalization is a good idea. Of course. none of which. are particularly relevant. The CEO decides this particular site is of little value and not worth the effort. These customer expectations were illustrated by Figure 1-1 in Chapter 1. I too have been involved in this debate and have observed customers' preferences with interest. may not be seen to be particularly helpful. not churn through marketing blurb. 9. they can only personalize by broad subject areas. Doing Area For Customers Some Web sites just don't allow customers to do the things they need to do as customers.

but there is a section called "Customer Service. since they will need the bill sent to the new address. the customer decides to advise their supplier online. customers need to make direct access to those products as quickly and easily as possible. they may go back to the home page and try to generate a recommendation for the model they want. The customer notices that they can click through to a product search at this point. Helpfulness as hindrance A customer goes to a car manufacturer's Web site. This customer knows exactly the make and model of the car they are interested in. So the customer decides to risk the search function (their experience with search engines is checkered at best). Rather than sit in a long phone queue. After clicking on "Product Search" the customer receives a page that just lists the same product categories as were presented on the home page. The sequence the customer goes through is shown in Figure 2-4. And there it is. At this point the customer scratches their head and asks themselves "How am I supposed to get to this product?" Depending on how keen the customer is. The customer is not sure which one is exactly the closest to the activity they want to perform. they've seen it advertised everywhere recently. The home page presents "Electricity for the Home" as an area for selection." There is no obvious link to the type of activity the customer wants to perform. they may just go make a cup of coffee instead. and the customer clicks on that.to different products). Or. They go to the Web site and. This customer is about to move to another home in a few weeks and wants to notify their supplier. and they have heard that it's supposed to offer good customer service. If a company has a high market profile. on the home page. but thinks "The Bill" is probably closest. Then the customer gets the "Home Page" for "Electricity for the Home. or they can click on a few other areas. just four layers down. The customer clicks on "The Bill" and gets a page that explains a typical bill. but these are general categories and the customer is not sure which category this particular model would fall under. Blunders Hidden utility A customer finds out that their electricity supplier now has a Web site." The customer clicks on "Customer Service" and goes to a page that categorizes services under a few headings. they remember to scroll down. 69 . at a product level. are met by a "guide" that offers to help the customer plug in some simple requirements to generate a list of models that meet those general requirements. so they can click through from there. The customer doesn't want to head down that route. because they already know what they want. It was there." Clicking on this brings up a form that the customer fills in and sends. The customer goes to the Web site. Just when the customer thinks that they haven't found what they're looking for. "Notify Change of Address.

Since there's nothing else. as well as a link to "Register Interest" in the final version of the product. A promotional Web site comes back. the customer clicks on "Contact for More Information" and receives an e-mail form that allows them to enter comments. "So. how do I get it?" and sends the form. only a contact for more information. with good explanatory information about what this software can do for businesses. the customer simply types. 70 .Figure 2-4 Helpfulness as hindrance. but it sounds great and it's affordable. Customer’s Frustration Customers get frustrated when a Web site leads them down a path to a product and then they can't get it. Blunders Hype and no hustle A customer goes to a software company's Web site for business customers to find out about its special deals. Either the Web site does not give them the option to select or purchase. or they have to go through some convoluted process to end up doing something other than purchasing it. The customer decides they want it and clicks on "Get It. But nowhere does it actually tell the customer how to get hold of the beta version of the software." This results in a page that details what you need to run the software. terms and conditions and how to install it. this new software could help the customer manage business forecasting a whole lot better. One of them looks interesting. The customer clicks on this special to find out more. It's only a beta version of the software. 10. They click on "Special deals" off the home page and get a page with miniads for three hot specials. This happens with frightening frequency in relation to special deals.

consistent system seems to work best-in fact. Navigation systems Inconsistency seems to be the thing that most often trips customers up. The main "anchors" for customers are navigation bars and frames-when these differ. or giving up. we need to provide signposts that show customers where they're going. Another. If a Web site introduces customers to a navigation system up front. they just use it intuitively. customers start to flounder. A single. where we've been. Some navigation systems are better than others. Sometimes customers won't go digging into a "hidden" site. and where we're going. that sense is defined by the customer). Consistency is also particularly important in relation to site hierarchies. Within these systems we use navigation devices that provide the cues as to where we are. as long as it makes sense to them and they can learn it quickly. some customers blame a company's Web site that doesn't do what they want when they hit "back" on their browser. because they don't know its value. for no apparent reason. Some of these are also better than others. they expect it to apply throughout the whole site. up front. customers seem to be comfortable with a reasonable amount of complexity in the navigation system. Customers get frustrated when you throw them too many curve balls. they are designing a system of visual cues that helps customers find their way around a Web site. That said. or they will start to dig. or they mix them up.) Interestingly. We need to help customers navigate.11. we will look at the common things that trip customers up. very interesting. customers don't even really notice it's there. find some useful stuff. they have to learn to use your navigation system and devices. When a Web designer designs a navigation system. because you're inconsistent or it just "doesn't make sense" (and. or layers. 71 . Customers very quickly lose their grasp of your navigation system if the hierarchy is messed up. Here. of information. they're likely to get lost. if it works. they don't get mad at the browser. and get annoyed that they didn't know about it in the first place. We will look at them in more depth in Chapter 7 when considering customer-effective Web site design. Many sites revert to different navigation systems within one site (particularly in cases where the site is structured around the company and not the customer). and have some common way of navigating between them. often Web sites don't clearly show levels. For example. When they go to your Web site. An overly simple navigation system doesn't necessarily win points if it "hides" the site from the customer (as is sometimes the case). without exception. We can think of navigation as the framework that helps customers understand what they are doing on a Web site. there are some common areas where navigation systems frustrate customers. and paths through them. and disappointing. Information architecture and navigation are huge topics. remember. This is particularly problematic in transactional processes where the customer uses the browser to go back and forth while entering and sending information-many Web sites aren't technically able to cope with this and the customer ends up getting error messages. discovery is that many customers treat their browser as an inseparable part of your navigation system. Help Customers Navigate Given that we have to create layers of information. (And note here that a system can be consistently made up of a number of approaches that all function as one system. Customers become angry when you don't allow them to learn your system. Unless customers can see the relationships between these different systems. losing information.

If customers can't understand why this new information has appeared in a new window. only to find that it's not "live". particularly when the label is "company-speak" and not "customer-speak. because customers try to click on them. a search function should appear in the appropriate context and customers should know what the search is being performed on. repeatedly. • What is clickable? Every clickable object should be obvious. and these are often key to the navigation system. Some sites provide feedback on the layers and/or sections of the site customers pass through. and not particularly well directed. I have observed many customers who run their mouse over a page to see what's clickable or "live" once a page has downloaded. customers expect the search to relate to the level of the site in which it is offered. and.Navigational devices Within the navigation system there will be a number of navigation devices-elements of the Web site that allow customers to get around within the basic navigational structure. From your home page. this seems to help customers to keep track of things. they will get frustrated quickly. they will get confused. or don't even realize they are in a new window. Passive images. and lost. very quickly. Sometimes sites combine words and labels to form their own icons. • Inconsistent and misleading use of iconography. Sometimes the links don't change color when selected or the colors are inconsistent. "How did that happen?" 72 . such as "wallpaper" images. I've seen some customers panic when a new window opens and heard them ask themselves. seem to be particularly problematic. However. when these are not used properly. Customers will want to roughly follow that path and make sure they're roughly on track as they go. If you don't consistently show customers what is clickable. vague. Not surprisingly. Some Web sites use new windows to present new information. In truncating instructions to labels we create a real risk of confusing customers. customers get a path (or paths) in mind. In very deep sites. • Changes in the color of links. There are some simple devices that help customers. Often search exists at a number of levels on a site. We don't have room on a single screen to write full explanations of what each object is. • Misleading or nonexistent labels. to click on something that they expect to take them somewhere. To avoid customer frustration. Usually the search is general. we use labels. • Multiple windows. Many sites offer no feedback or only sporadic feedback." Labels that are different from the "standard" labels customers are used to seeing on Web sites are also problematic. and not far enough-they disappear leaving customers wondering what their signposts are. I have seen customers curse because they've tried. One of the most common frustrations is not being able to work out where they are at a certain point in time or where they've been. • Sending no feedback on where customers have been. Customers get confused about the cues they are supposed to be using to find their way around. This leaves the customer wondering what the different responses mean in relation to where they've been. Many labels just don't make sense to customers. • Unknown search functions. they cause the most problems: • Inconsistent or non-existent highlighting to show where the customer is on the site. many attempts at iconography only go so far.

. these symbols often mean something different to customers." "Clients. For example. they are about to make a trade off). trying to decide which system they want to use (i. Also. And there are no links between the two navigation systems. It seems the top-level system (the main navigation bar on the Web site and the pages on each product category) has just been wallpapered over the underlying navigational system (the list of links on the home page and the Web sites they correspond to). The customer clicks on one of the product categories in the main navigation bar." etc. the customer later discovers that these are. This navigation bar categorizes the site by product groups. This takes them to a page that lists all the links available within that "section of the site. an arrow shows direction. This additional meaning may be lost on customers. means nothing to a customer. or learn both. Sometime sites use common visual symbols as a way of showing meaning. Customers sometimes face indexes that they don't understand. I've observed customers totally stumped by this sort of thing." "Search. This has introduced conflicting navigation systems and confused the customer. The sequence the customer goes through is shown in Figure 2-5. This makes the indexed information inaccessible to the customer." and "Special Feature." "Introduction to the Firm." "Services. The top half includes three images that the customer can click on. Some web sites use arrows to indicate movement as well as direction (e. chances are. who has been forced to either lose the perspective of one system in favor of the other. a product index that is simply shown at the top level as A B C D. they certainly don't know all your product names. The home page is roughly in two halves. The customer sits for a few moments going forward and back trying to work out the relationship between the home page and the next level of pages. common symbols may be loaded with meaning over and above what a customer would normally expect. which introduces a main navigation bar across the top of the screen. and. because when they click on one of the links from the home page they get a different Web site with a different navigation bar.Misleading visual symbols. using arrows to indicate that customers can order a list of items by moving them). The home page also provides a list of links to all parts of the site (under the navigation bar). "Articles. • Absence of a navigational system A customer goes to a company's Web site.g. etc. in fact." However. "pseudo" sections and not actually core to the navigation of the site.e. who take them at face value. For example.. Blunders Conflicting navigational systems A customer goes to a company's home page. • Vague use of indexes.. However. 73 ." The bottom half looks more like a list of links to different sections of the Web site: "Contacts. they have no idea how you would categorize your products.

Phew. that this company has no international coordination of local Web sites. There's also a link to the international home page at the top of the left-hand frame set. The customer decides." forgetting that this relates to the local site and not the International site. From here the customer selects the first local office they are interested in. To get to a new section of the Web site the customer has to go back to the home page and make a selection from there. From here. The customer slips up a couple of times while looking around this local site and hits "Home" to go back to the local office home page. and the customer asks themselves "Why couldn't they just put links to all the sections on all the pages to save me going backward and forward all the time?" Good question. Selecting the local office brings up a local office home page with its own "home" icon. so they can select another local office. The customer discovers that clicking on the top half and the bottom half generates a standalone section relative to the area selected. Too many homes A customer goes to the Web site of an international company to find out about the services offered by some of its local offices. the customer clicks on that to get the international home page. the customer selects the next local office and they receive yet another home page. The customer absent mindedly clicks on "Home. The home page downloads and it relates to the international company. This is extremely time-consuming.Figure 2-5 Conflicting navigation systems. rightly or wrongly. and cumbersome. The customer looks around for a while and then decides to go back to the international home page they received on entering the site. Remembering that the international site is linked to at the top of the frame set. only to end up at the international home page. 74 . This time the customer discovers that the "home" icon does actually take you back to the international home page and not the local office home page.

Customers don't always react positively to this. Blunders Badly placed and poorly explained authentication A customer of a consultancy company goes to its Web site to find out what research it has done lately. or authenticate. The customer thinks. This negative reaction is greatest when the Web site doesn't explain what the different privileges are or doesn't give customers equal access to the parts that should be available to everyone." given that they are a client. There is no explanation as to who has access here or how they go about getting it. In other words. The users who can get at this privileged information will have to identify. why can't I search the site to find out 75 . "Hang on a minute. themselves to gain access. some customers can get at some information while others can't. The customer clicks on "Client. Well. The customer then notices a search option in the navigation bar.The sequence the customer goes through is shown in Figure 2-6. wondering what lies behind those magic doors and why they can't get at it too. Figure 2-6 Too many homes. but there is a navigation bar that offers "Client" as an option. The home page does not offer any obvious links to research. Selecting search brings up the same screen as before. the customer doesn't have a login id or password. 12. to receive a screen asking for a login id and password. just a request for a login id and password. Privacy Some Web sites offer different access to different users.

It turns out that all the customer had to do was register. "Aha. It's some time before the customer goes back to attempt to find. or complete. The customer thinks. The customer thinks. "I just want to read the damn article!" By now the customer has decided that they're not going to get the information they want. The sequence the customer goes through is shown in Figure 2-7. I can find out what this research is here. the registration process. They go back to the home page and select "Products and Services. just a request for a login id and password." They select the link to the article and get the same screen again. why are you locking me out?" The customer surmises that the search probably relates only to the "locked" information and not to the site in general. 76 . The customer decides to try another route. They grab the phone and call their consultant demanding to know why they aren't allowed to see the consulting company's research. but didn't know that. Figure 2-7.about your research." This brings up information including mention of an article on one of the consultancy company's recent research studies.

13. or what they need to do. and can't. Incorrect classification will anger your customers because it gets in the way of them doing what they want to do on your Web site. Lists that require mutually exclusive selections stump customers. Your marketing segmentation approach may make sense to you and mean absolutely nothing to your customers. and it just isn't enough. Customer service Customers also get very frustrated when they are presented with limited online services. of the possible selections apply to them? They are forced to limit their response to one selection. without a moment's hesitation. customer classifications are made from a company's perspective and are not meaningful to customers. or maybe even all. They get annoyed when they want to make a particular transaction. scratch their heads and say. Beware of putting your customers in boxes. Too often. Classifying customers Different customers have different needs. unless you really know they'd put themselves in a box. This is probably because it is potentially one of the most useful tools customers have to get where they want to go. and it's a double whammy. Search functions can limit customers' choices when the functions present search criteria unrelated to what the customer is looking for. Some forms ask the customer to check certain boxes and obviously limit the nature of the service available. their problems. and by "anchoring" searches to criteria other than those the customer is interested in at a particular time (anchors are discussed further in Chapter 7). Should Not Limit Customers Choices Poor navigation will. This might work if you know who these different customers are along with their needs. it can have significant consequences. and that can be very helpful and useful to customers. Drop-down lists Drop-down lists can be double-edged swords. of course. Figure 2-7 Badly placed and poorly explained authentication. these lists often fall short because they just don't include the options customers are looking for. What do customers do when more than one. I've observed customers who sit and look at lists like this. or are forced to limit their interaction. This problem is particularly prevalent when customers are completing forms to receive certain services. their needs. restrict the choices customers have because they won't be able to make the appropriate selections to get to where they need to go. and many Web sites classify customers to help direct them to different information. However. They offer finite parameters to customer selections. If customers bail out. Get it wrong. The broader issue of navigation aside. "Search" is one of the areas most likely to frustrate customers. "What do I do now?" Some customers will make a single selection and make do while others will just decide not to interact on the basis of limited choices. especially if they're in the middle of buying your product. or they don't allow customers to send the right messages about who they are. 77 . we will look at some specific instances where customers are directly offered choices and where those tend to be problematic.

Customers get angry. Limited customer service Continuing the above scenario. and quite often. monthly bills. The form doesn't allow them to enter any comments either. this isn't perfect but it's better than the last site. I'll probably make lots of calls and I don't mind having monthly contracts. the professional finds a link on the Web site inviting them to "Provide Feedback on the Site". For example. Actually. Well. location is the least relevant criteria for this professional because they are happy to be located anywhere. or. and the professional is forced to give up. and scrolling. 14. This one allows them to search against lots of different criteria: type of role. The site offers a link that provides "guidance" to customers wanting to evaluate mobility products. the professional goes onto another company's Web site. in fact. However. location. they might not. However. What do I select. provided they're in a good job. every time the search engine produces results. etc. They decide they'll do just that and click on this link to receive a form they can complete and send. then again. and scrolling. The professional clicks on "Search Available Jobs" to receive a search function. the search function they are presented with only allows them to search against location. The customer is able to select one of the scenarios in each list to generate advice in relation to each selection. in the case of product pages. customers prefer to see links to product information within the page so they can go straight to the part of the page they are most interested in without having to scroll through all of the other information available. To view jobs by role.. "Hang on. to get at a company's information. the professional has to also click through location (and sometimes there are up to three or four levels of locations to click through).Blunders Insufficient choices Consider a customer who is thinking about getting a mobile phone. The professional wants to see the types of roles on offer. They go to a Web site and select the section on mobile phones. They expect to receive information in chunks they can digest. The customer has to go straight to the product list so they can work out what they need for themselves. salary range. to see whether there is a fit with their skills and experience. or "anchored" on. the professional might wade through locations as well. 78 . However.. Clicking on this link brings up a series of drop-down lists. since neither of these apply?" The customer proceeds down the other lists and finds that none of them apply. they are all "pinned" to. A drop-down list presents the following options: I would use a mobile phone: • To have one just in case. Relevant Details Many customers seem to hate scrolling. To avoid wading through jobs classified by location. this form only allows them to check boxes in relation to "bugs encountered" on the Web site. skills. Depending on how good the roles look. Can frustrations with a search engine be classified as a bug? Probably not. Restrictive search criteria A professional goes to a Web site that offers job-finding services. when they feel like they're drowning in your information. but not make many calls • But don't want monthly contracts. or fees The customer thinks to themselves. they'll even suggest what those chunks might be.

Many sites use these terms and deliver something that is a far cry from what has come to be expected. and often misleading. They go back and look at the fields most likely to be required in a different format." they would say. Some examples of customer criticism follow: • Home-"Don't call it home unless it is. and what format should it be in?" the customer now asks themselves. and incur customer criticism as a result." • Site map-"Is it a map or just a basic list of links that doesn't help direct me" • Search-"Is it actually a way of searching relevant information or just a rudimentary index. or anything else. so they leave those particular fields blank. "correcting things. and the form is finally accepted. They call up the package information and click on "Buy Now." to get a transaction accepted." • Feedback-"I don't think you actually want it. They can waste a lot of time going backward and forward. please try again." An error message comes back saying. "You have not entered information correctly." They receive a form which they can complete and send. The customer then gets to the point where all the fields are filled in and the form is still generating an error message. Should Be innovative Customers get very frustrated when they're transacting with you and you don't tell them the information you need them to provide. This time the error reads.15. much better if we called a spade "a spade"." "Which fields?" the customer asks themselves. "You have not filled in all of the necessary fields. called things exactly what they are. "Just tell me what it is. Blunders Success through trial and error only A customer decides to purchase a weekend holiday package at a hotel they've been wanting to stay at for ages. I need to know how to solve my problem. labeling on a Web site." • Contact-"So. we would manage customer expectations." In addition. there are a lot of labels that have taken on a certain meaning in the Web world. The form asks for lots of different information.. Give what is genuine to a customer Customers often feel that a site over-promises and under-delivers." 16. They complete the form and click "send. but some of it doesn't seem to apply particularly well to them. or the format that you need it provided in. i. it means buy now!" • Help-"Don't give me vague information on irrelevant stuff.e. They engage in a process of trial and error to find out which fields have to be filled in. However. try again. Success at last! 79 . such as date and phone number. and stave off disappointment. or see if you qualify." "Which information. In some ways this is almost unavoidable given that we can't always do everything customers want online. Trial and error reveals that the phone number shouldn't have had any spaces in it. "Too clever" is what many customers would call fancy." • Special deals-"Doesn't look like much of a deal for a customer who's especially come to your Web site to find it. give me the contacts then!" • Buy now-"This doesn't mean register interest. "straight up.

and they can be contrary to what the customer normally experiences offline. it's probably easier just to call the toll-free number and organize it over the phone. Businesses often want to create or change customer behavior.The customer decides that. This won't be a problem for bricks-and-mortar companies or their customers. This may not always line up with what the customer is trying to do. Customers often expect these relationships to carry over to the Web. for example). Sometimes bricks-and-mortar companies will introduce new service processes and relationships on their Web site. particularly in a business-to-business environment. Creating customer-effective Web sites can be a win-win proposition-it's just a balancing act. A company has to deliberately consider the customer needs they cannot meet and work out how that is going to be handled. Some of those needs just can't be met (well. A business that does not consider the balancing of organizational and customer needs may be seen to be ignoring its customers and offering inferior customer service. as long as customers needs are recognized and the company works with customers to change service processes over time in a way that makes sense." In addition. For starters. Of course. If bricks-and-mortar companies are seen to immediately offer a lesser quality of service (through the absence of physical contacts and services. we are faced with a very fundamental issuecustomers and businesses don't necessarily want the same things. if it means losing out on the benefits of good service. It is unlikely that we will be able to provide all of the content and functionality required to service every need customers have. and the directives they might give us in providing what they want. Web sites that ignore important relationships to provide a less adequate level of service will frustrate customers. not now anyway). When businesses try to explicitly mould a customer's Web site experience. and potentially expects online. Conflict between business and e-customer goals becomes very apparent in cases where bricks-and-mortar companies begin to migrate some of their services online. next time. Some customers have very important personal relationships with the people inside. 17. having thought about what customers want to do on the Web. Do not Ignore Important Relationships Web sites are only one part of customers' relationships with a business. contrary to a customer's natural expectations. While businesses can use Web sites as a means to influence ecustomers. but as discussed before. and sometimes the business chooses not to meet them for their own reasons. sometimes anonymity is a good thing. customers will identify themselves and their personal relationships. it is seen as obtrusive and the customer becomes frustrated. if a business gets 80 . that influence should be in harmony with what e-customers are trying to do. Businesses want to influence the services customers use in different situations and the way they use them. And a company's apparent silence on the matter will make it "guilty as charged. Customers and Organizations Now. then there will be a direct conflict between what companies and customers are trying to achieve. where customers will expect to have access to someone like their account manager. it may not be technologically possible to provide customers with the experience they want.

it may not be given a second chance to get it right. we will look at customer testing and some ways to go about getting quality information from our customers. Ways that businesses can establish their requirements with customers' needs in mind. understand the balancing act required. and manage and implement Web sites that effectively meet customer needs are explored further in Chapters 4 and 5. 81 .its first attempt at electronic service so wrong that customers have a bad experience. Meanwhile.

Unfortunately. As a side benefit. In short. This means creating a profile of desirable customers. for the benefit of the customer. and • Retaining your best customers for • Improving the profitability of your institution. there is a danger we see with multiple vendors offering systems built on relational database technology and touting theirs as the one customer relationship management tool you need. a “data mart. The problem will come when you have implemented multiple CRM data marts to handle various applications. CRM systems help the bank present a consistent view of the customer relationship across all delivery channels. and maintaining your best customers to increase the lifetime value of the relationship. When done right. However. It generally requires new database management systems. new messaging and routing systems.” these vendors are jumping on the CRM bandwagon. analysis and decision support systems. CRM should provide the benefits of: • Selling to your best prospects. campaign management systems.Chapter 11 BENEFITS OF IMPLEMENTING CRM Customer relationship management is meant to shore up less than adequate efforts in the past at understanding who your most profitable customers are. Most CRM projects are being implemented on the faith that obtaining and analyzing customer data will enable the bank to be more profitable. Because most new banking applications are being developed with a database that aggregates customer data. Ernst & Young reports that 63% of respondents to their e-commerce/ CRM survey did not know how much their profitability increased as a result of their CRM projects. the CRM process is so new that bankers we talked with have not had any time to obtain measurable results. You should think of CRM technologies as basically handling two major operations: • Back office customer data aggregation and analysis • Front office end-user data presentation and manipulation 82 . Warnings and Pitfalls In today’s CRM environment. developing marketing and sales campaigns to reach those prospects. CRM is costly. CRM is an enterprise-wide endeavor. and then find you cannot reconcile the data in each database. It requires the melding of employee behaviors with information technologies. It will be better to implement a single CRM system first and then hang multiple applications off the core database. and sales tracking systems. integration with legacy system.

on the telephone. or soon. you run the internet banking solutions. 83 . to ATMs. or on remote. or enhance old delivery channels-from call centers. The end-user may be a banker or the customer. is the inherent customer relationship management technology on which they are based. Between the back office and the front office are many technologies that facilitate analysis and presentation. to the Internet-with consistent customer relationship record at each touch point. End-user touch points may be in the bank. in the call center. and total delivery channel solutions. a kiosk. via internet. at the credit officer’s workstation. at an ATM machine.All CRM solutions are built on a relational database. through wireless devices. often called “middleware” because it suits between the legacy systems that handle the transaction processing and the front end systems that deliver the data across end points. at the teller line or on the platform. The question is where should you begin your CRM implementation? In the rush to provide new.

6. Do what you said. 5. 8. Take personal ownership& responsibility for keeping the client informed of progress in any matter they have raised. 84 . 7. Engaged client forms a sound commercial foundation for the existing bank. Every bank wants their client to regard the organization as their partner of choice time after time. Give every customer a reason to trust the bank. 4. 3. 9. Satisfied customers/clients become engaged clients when they trust the bank the are linked with and feel a sense of pride through an association with it. 10. when you said you would do it. 2. you could do it. Engaged clients form a significant source of continued and improved growth.PRINCIPLES OF SERVICE IN BANKING 1. Don’t keep good news to yourself-inform the client of every success. An engaged client will actively sell the bank’s product and services to others. By satisfying the clients’ business objectives a bank can satisfy their own professional and personal objectives.

e. according to almost all of the bank representatives. Almost all the credit institutions have adopted the strategy of launching their e-business services as an additional service rather than as an alternative to offline services. distant interaction is not as effective as personal interaction between customers and their bank. Nevertheless. These goals can be better reached by adoption of enabling ICTs. CRM in fact. The study has identified issues that need to be assessed if CRM is to be used more productively to take advantage of new opportunities. The exploitation of CRM appears to have a positive impact on the quality and quantity of information conveyed to customers. and improved fulfillment of customer needs. The impact of 85 . STEPS THAT BANKERS’ CAN FOLLOW TO BULID UP RELATIONSHIP WITH THEIR CUSTOMERS: • • • • • WELCOME CALL PROFILE SHEET BANK CUSTOMER INTERACTION DETAIL FILE APPOINTMENT DIARY IMPORTANT DATES TRACK ALARM LONG TERM CRM should be viewed neither as a new competitive tool nor as a cluster of technologies. is a process that helps to maximize medium to long term profits as a result of a better customer knowledge. Implementing a CRM process means gathering flows of information concerning actual and potential customers. Therefore. Ideally. i. an effective CRM project needs to be very well integrated in the credit institution organization. Information flows coming from delivery channels should ideally be consolidated into a customer database in order to develop customer profiles that enable banks to improve customer services CRM based on ICT can strengthen the marketing strategy of the financial organization by making more effective the management of all the information concerning customers. customized treatment of customers or a perception of it. e-business supports low value information needs. This is particularly relevant for the most sophisticated customers. those who are used to dealing with new technological tools and are not afraid of interacting with the bank through the telematics channels. but rather as a set of business processes that help manage client credit institutions relationships and improve internal credit institutions workflow.FINDINGS & CONCLUSION The main objective of the report has been to assess the current state of the CRM development within Indian credit institutions and to evaluate its organizational impacts. while more sophisticated requests for information can be addressed only through personal interaction between the bank and the customer that usually takes place at the branch.

This research highlights how some of the credit institutions which had originally invested only in the development of a virtual channel had to drastically re-define their customers or by opening a call centre. delivery). This makes it difficult for sales people or relationship managers to have a full view of their customers. Financial institutions have to realize the importance of the technology scalability as well as the reengineering of the business processes. product differentiation and personalization) seems to be the crucial issue of the CRM strategy. Most of the financial organizations choose to internalize the customer support contact center. The credit institutions representatives argued that their customers want a choice of channels and they are adopting a multi-channel strategy. mode of payment. Ideally. The customer retention is the result of an increasing degree of product personalization and differentiation. the traditional delivery structure still has a fundamental role and can be developed to specialize in high added value tasks and consultancy services. Credit institutions apparently prefer to compete on quality (product information. This problem results in companies sending. A medium to long term CRM strategy requires significant innovation in the organization of the banks’ flow of information.e-business in banks is being limited by their strategic decision not to cannibalize their branches. Therefore product innovation (cross-selling. Most financial suppliers believe that customer support services are a core business in the financial industry. Hence CRM is a vital tool for financial institution to prosper……. Most of the banks consider that since Internet and telephone are most useful for managing operational and low value added tasks. broader range of product and services) rather than on price (meant as product acquisition cost to the customer: price. whereas others choose to outsource front-office customer care tasks to contact centre companies. But many banks face the problem of having multiple database with customer information. CRM technologies and processes could make the slogan “the right customer with the right product at right place and in the right moment” possible. for example. 86 . A number of CRM deployments have failed because of inconsistent customer data. the same offer twice to the same customer. But the final elaboration of data on customers and their exploitation for CRM strategy is maintained in house and involves the bank management personnel. so that multiple entries refer to the same customer if he/she holds more than one product with the company.

References • • • • • • • • Gandy A.com/CRM in Indian Financial Industry www. Berenstein (2001) “ E-finance: recent developments and policy implications” www.WEBM Global Services Sato S. by Vikram T.J.com/CRM in Indian Financial Industry 87 . Hawkins and A.Lund JP Morgan Equity Research (2001) ‘Assessing the impact of e-business on Indian retail financial services’.google.vivisimo. Customer first.it/star www. 2001. Active and integrate: optimizing the value of on-line banking Assessing the impact of e-business on Indian financial services.2001..databank.A study of customer relationship management strategies in Indian financial services Financial World Publishing: London Boston Consulting Group.

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