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CUSTOMER RELATIONSHIP MANAEGEMNT IN BANKING
DEBOSHREE.K.MAJUMDAR TYBBI SEMESTER V
M.L.DAHANUKAR COLLEGE OF COMMERCE VILE PARLE (E), MUMBAI-400057
UNIVERSITY OF MUMBAI ACADEMIC YEAR: 2008-2009
UNDER THE GUIDANCE OF
I, Deboshree Majumdar of M.L.Dahanukar College of Commerce TYBBI, hereby declare that I have completed the project on “CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING” during the
Academic Year 2008-2009. The information submitted is original and authentic to the best of my knowledge as a lot of dedication and hard work has been put in by me for the same.
____________________ Signature of the student
This is to certify that Ms.Deboshree Majumdar has satisfactorily carried out the project work on “CUSTOMER RELATIONSHIP
MANAGEMENT IN BANKING” in partial fulfillment of Bachelor in Banking and Insurance (BBI) as per the curriculum laid down by the UNIVERSITY OF MUMBAI during the Academic Year 2008-2009.
Mr.Amit Oak (Project Guide)
would be inconsiderate on my part. 6 . Working under his guidance has been a great experience. who guided me throughout and has been a helpful guide. I’ve been helped and supported by a lot of people whose names if not mentioned. I’m deeply obliged to our college librarian who guided me through the reference books. without which my project wouldn’t have seen the light of the day. I wish to thank my family for dealing with me patiently and supporting me whilst I was working on this project. I’d like to thank my guide.ACKNOLEDGEMENT During the course of this project. Amit Oak. Most of all. Mr. I’d like to thank all of them.
right from grammar checks to replace alls-things have become simpler with the advent of this software.And my sincere thanks to Mr. 7 . processes. metrics. implicative and inspiring suggestion so that the company may attract new customers and bind existing customers steady with the company. CRM is a set of strategies. A vast way of approach to customers. instantly and profitably. CRM is simply a tool & technology used to achieve incremental operational improvement. on those differences and opportunities. throughout. just for being there with me. organizational culture and technology solutions that enhance an organization's ability to see the differences in its customers’ and prospects' behavior and needs. Writing a book wouldn’t have been easy without MS Word. EXECUTIVE SUMMARY The idea behind Customer Relationship Management is not new. in an attempt to realize their living style in every field of life and eventually to influence them to change their life style toward their benefitable direction through the company initiating ceaseless communication of indirect. Bill Gates and MS Corp. track new opportunities to better serve their customers and act. And most importantly I thank The Almighty.
so that a company can offer them goods or services in which they are likely to be interested.Recently CRM has taken a center stage in the business world with businesses concentrating on saving money and increasing profits by redefining internal processes and procedures. and companies are making bigger and bigger to do just that.usually depending on sophisticated computer systems . In additional to all the usual customer care principles. Today it’s widely acknowledged how you treat your customer goes long way in determining your future profitability. It is said that “It is seven times more expensive to acquire a new customer than to keep an existing one”.to record and analyze the buying habits of customers. CRM includes the storing of customer information in a database (or data warehouse) and using the information in a way that improves the customer's "experience". Customers are serious about the service they 8 . A customer relation management analyst says CRM is "a buzzword that's really not so new. Customer Relationship Management refers to the process . It costs a company dramatically less to retain and grow an existing client. therefore the value of customer information and management should never be underestimated. than it does to court new ones. The aim of CRM is optimize the use of technology and human resources for the business to gain insight into the behavior of costumer.
Market analysts squabble over the exact figures.should beget and are voting with their wallets based on the experience they receive. which is a part of CRM but stress is on the customer preference on the needs. customer retention is a key driver for profitability. but all agree that in the next few years company will pour billions of dollars into CRM solution software and service designed to help the business more effectively manage customer relationships through any direct or indirect channel a customer opts the use. so that companies can please most of the customers all the time. 9 . companies are looking at retaining existing customers and converting potential customers into lifetime customers. In many industries. Relative graphs and diagrams are also included in this project. In this project stress is not on the technology. By investing in CRM or e-CRM applications. Specially in banking CRM it is very important because bankers have to daily interact with their customers and provide value added services to them. This project answers to all the queries regarding what customer relationship management is. The role of the customer in any business activity is very important and this can be clearly revealed from this project.
10 .com “What Is CRM?” because if you ask three CRM experts. CONTENTS PAGE NO. SR. is the most common question at CRMguru.NO. you’ll get five different answers.So why. is the market of CRM technology exploding.
3. 2. SCOPE. 12. RETAIL BANKS PLANNING FOR CRM 8. 10. E-CRM THE PAST. 15. 85-89 90-94 95-99 100-101 102-106 107-111 11 . 5. PRESENT AND THE FUTURE CRM IN INDIA CONCULSION SURVEY AND MANTRA OF CRM CRM AT STANDARD CHARTERED CASE STUDY 74-84 63-73 57-62 11. PROCESS AND STRATEGY OF CRM BANKING ON CUSTOMER FOCUS TECHNOLOGY IN CRM CRM IN BANKING 11-19 20-26 27-35 36-41 42-46 47-56 7. 14. 4.1. INTRODUCTION BIRTH OF CRM NATURE. 6. 13. CRM IN RETAIL BANKING 9.
INTRODUCTION ‘CUSTOMER IS THE KING’ -Toady’s seller. 12 .
the three perspectives are: 13 . employee training. marketing. CRM is a term that is often referred to in marketing. there is no complete agreement upon a single definition. The general purpose of CRM is to enable organizations to better manage their customers through the introduction of reliable systems. front of house customer service. In summary. Customer Relationship Management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers. Changes must occur at all levels including policies and processes. However. A successful CRM strategy cannot be implemented by simply installing and integrating a software package and will not happen over night. Although there are several commercial CRM software packages on the market which support CRM strategy.What is CRM? Customer Relationship Management (CRM) includes the methodologies. processes and procedures. This is because CRM can be considered from a number perspective. a holistic change in an organization’s philosophy which places emphasis on the customer. systems and information management. it is not a technology itself. all aspects of the business must be reshaped to be customer driven. Rather. technology and capabilities that help an enterprise manage customer relationships.
e. or an It-based customer management system to support sales people. CLC focuses upon the creation of and delivery of lifetime value to the customer i. IT is vital since it underpins CRM. value creation and innovative IT. customer retention and customer extension. For many. such as speed. 14 . However. However. Our model contains three key phases – customer acquisition. power and money. CLC is a summary of the key stages in a customer’s relationship with an organization. It is marketing orientated rather than product orientated. The diagram below shows the Marketing Teacher Model of CRM and Business Strategy. companies often buy into software that will help to achieve their business goals. CRM from the Business Strategy Perspective The Business Strategy perspective has most in common with many lessons and topics contained on this website. ease of use. and has the payoffs associated with modern technology. CRM is far more than a new software package. and indeed within the field of marketing itself. CRM from the Customer Life Cycle (CLC) Perspective The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). Essentially. and three contextual factors – marketing orientation. the renaming of traditional customer services. and so on.CRM from the information Technology Perspective From the technology perspective. looks at the products of the services that customer needs throughout their lives.
So CRM is the building and maintenance of long term customer relationships. Simply stated. The relationship is supported (but not driven) by cutting edge IT. • The people. acquire and retain customers.A commonly cited definition of CRM (UK) Ltd. (2002). customer relationship management (CRM) is finding. The relationship delivers value to customers. The business strategy is based upon the recruitment. This is the core of CRM. retention and extension or products. and profits to companies. development. solutions or experiences to customers. Simply stated. is as follows: Customer Relationship Management is the establishment. sales. processes. 15 . and service. maintenance and optimization of long term mutually valuable relationships between consumers and organizations. getting and retaining customers. services. Customer Management Relationship (CRM) is: • The art/science of using information to find. Defining Customer Relationship Management (CRM) Here is the compilation of some of the most respected thoughts that can describe CRM. and technology questions associated with marketing.
not driven. • A holistic approach that unifies all points of customer interaction. ●Adopt customer-based measures. • Measured by customer retention and referrals as well as the growth of valuable customer segments. 16 . ●Create a customer-based culture. CRM involves redesigning of functional activities. A Good CRM Program Needs To: ●Identify customer success factors. • Actively deepening the knowledge you have of your customers to meet individual customer needs. • Supported. by technology.• At the core of ant customer-centric business strategy and culture.
some technology is required to enable a CREM strategy. ●Recommend what to tell a customer with a complaint about a purchase. Aspects of CRM: There are three aspects of CRM which can be implemented with isolation from each other: • Operational CRM: automation or support of customer processes that include a company’s sales or services representative. CRM is iterative in nature. Customer Relationship Management (CRM) is NOT: • Just about buying technology. • Possible with remembering that the driving force is often human relationships. but a journey. 17 .●Develop an end-to-end process to serve customers.” by Aris Pantazopoulos. to be improved on a regular basis. operational processes and business functions in order to retain customers and increase customer loyalty and profitability. ●Track all aspects of selling to customers and prospects as well as customer support. • Collaborative CRM: direct communication with the customers that doesn’t include a company’s sales or service representative (“self service”). • Not a destination. “The true value of CRM is to transform strategy. ●Recommend what questions to ask to help a customer solve a problem. However.
Customer Retention 3. Customer Extension 18 .• Analytical CRM: analysis of customer data for a broad range of purposes. Customer Acquisition 2. The three key phases are: 1.
We have acquired our customer. Value Creation 6. Growth . Customer Retention . Innovative IT 1. We keep them as a customer.Our customer returns to us and buys for a second time. Growth – Through market orientation. innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time. innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time. 2. or the next level of product or service.The three contextual factors are: 4. Marketing Orientation 5. 19 .Through market orientation. This is most likely to be the purchase of a similar product or service. Customer Acquisition – This is the process of attracting our customer for their first purchase.
Of course once our loyal customers have purchases those. Marketing Orientation – Means that the whole organization is focused upon the needs of the customers. These are additional. Marketing orientation will focus upon the needs of consumer for all three levels of a product. 4. We introduce products and services to our loyal customers that may not wholly relate to their original purchase. our goal is to retain them as customers for the extended products or services. but also the core product and its benefit. (N.3. Customer Extension – Our customers are regularly returning to purchase from us. 20 . ‘market’ orientation and ‘marketing’ orientation are not the same. innovative 11 and value creation we aim to increase the number of customer that purchase additional supplementary products and services. tangible product. Value Creation – Centers on the generation of shareholder value based upon the satisfaction of customer needs (as with marketing orientation) and the delivery of a sustainable competitive advantage.B. Customer needs are addressed by the Three Levels of a Product whereby the organizations not only not only supplies the actual. and also the augmented product such as a warranty and customer service. supplementary purchases. Growth – Through market orientation.) 5.
6. Innovative IT – It should be efficient. since every consumer displays different purchasing habits and preferences. Whilst IT and/or software aren’t the entire story for CRM. it is vital to its success.g. and try to market products and services to them based upon similar buyer behavior seen in other individuals (e. Organizations will track individuals. In some ways. BIRTH OF CRM 21 . CRM software collects data on consumers and their transactions. When Amazon tells you those customers that viewed/bought the same product as you. speedy and focus upon the needs of customers. also bought another product).
CEO’s tried to distinguish their companies through operational excellence and product innovation. MAHESH DADLANI CUSTOMER RELATIONS. -MR. Vendors were all too happy to support this 22 .“CUSTOMER FOR LIFE THROUGH SYSTEMS AND SMILES”. They believed that automation and better management of their sales and customer service process would lead to increased revenue and customer satisfaction. BIRTH OF CRM Throughout the 90s business were focused on improving internal operations. Middle management focused on automating departmental functions such as sales and help desk support. ORANGE.
With easy access to mountains of information.belief and raced to the scene with independent solutions for sales force automation. 23 . In response. This did little to support cross selling opportunities or increase customer satisfaction. While many of these applications provided increase in the productivity. today’s customers do their homework. and they now have the upper hand in most purchase transactions. sellers are bending over backwards to improve offerings and services. Furthermore. By the time customers walk into your business – or log on to your website or call your call sales centers – most already know what they want and how much they’re willing to pay. However. the approach of using independent solutions to address departmental needs served only to create islands of information and database duplication. help desk and customer service functions. serviced and marketed in an increasingly fragmented and ultimately frustrating way. rather than adopt a streamlined “YOU WANT IT WE’VE GOT IT” approach sellers have created a marketplace where products and services are sold. the lack of system integration was unavailable to sales and support personnel without jumping from system to system.
sellers face a harsh reality that brings an old adage to life: YOU CAN PLEASE SOME OF THE PEOPLE MOST OF THE TIME AND MOST OF THE PEOPLE SOME OF THE TIME. better still. brought the promise of helping sellers PLEASE MOST OF THE PEOPLE MOST OF THE TIME. It wasn’t supposed to be this way. companies have implemented call centers and sales force automation software and customer sales representative training. It’s the piece that ensures sales and service efforts are effective and integrated. increased revenues. BUT YOU CAN’T PLEASE ALL OF THE PEOPLE ALL OF THE TIME. Trying to be all things to all buyers. CRM has not yet delivered its ultimate promise – the transformed customer experience. That dream has been slow in coming. While incremental improvements have occurred. which swept through the business landscape in the early 1990s. Customer Relationship management (CRM). would come increased organizational efficiency and. It’s the piece that allows the 24 . Yes. Riding the coattails of customer satisfaction. However. companies have largely ignored the very piece required to attract customers in the first place. while improving the sales and service components of customer transactions.Never before has so much “clutter” bombarded consumers from so many online and offline sources.
However. This was the right direction to take. companies haven’t reached the end of the CRM road. We’re not saying that the last decade’s investment in CRM has been wasted. It’s the piece called “marketing”. the challenge is to take this evolution one step further – to focus on building lasting and profitable customer dialogues at all interaction and transaction touch points to build customer and brand value. Today.seller to segment and analyze their customer information in order to create a more personalized. 25 . long-term relationship. Quite the contrary: what began as a solution for providing more efficient customer transactions evolved into a process by which companies could foster more meaningful customer interactions.
CRM TODAY – FRAGMENTED CUSTOMER EXPIRENCE SERVICE SALES CRM TOMMOROW – TRANSFORMED CUSTOMER EXPERIENCE 26 .
After all.MARKETING SALES SERVICE EVOLUTION OF CRM As CRM evolved. you can’t sell what people don’t want to buy. no matter how efficient and service oriented your sales channel. And as for gathering customer insights. This assumption was pernicious as it was false. Many companies faced the unsettling paradox of having advanced data availability and analytic techniques that quickly 27 . be careful what you wish for. many companies assumed that just bolting on new technology or adding new services would enhance customer relationship.
Transaction based marketing: The volume based marketing which was a single function approach was the first stage. not every conversation will be profitable. But the series of conversations and the ongoing knowledge transfer will continue to grow. The evolution process of CRM has worked as follows 1.outpaced their ability to absorb and apply the information. The value generation for the vendor was the sole criteria for the success of the business. in the long run. a profitable relationship. 28 . Consumer history will be recorded and the expectations of both parties will be met. and. They were left with sophisticated tools that offered little real value. Naturally. creating a memorable and differentiated customer experience. information will be exchanged and acted on in real time. The belief is that the third wave of CRM will bring about the ultimate transformation of customer experiences – not just by strengthening sales and service or even promoting interaction with your customers – but by creating a series of “Intelligent Conversations” that build over the time into a long term meaningful dialogue. In this next evolutionary phase of CRM.
Relationship management: This was the next step in the evolution where for retention and acquisition both factors beyond just the pricing and quality of the products need to be looked into. Customer Acquisition: was the key for this.2. This naturally led to acquisition as the only strategy for the business to grow and expansion of customer base 3. Customer retention: The factors like fierce competition in growing number of vendors. 29 . The creation of long term relationship with customers by offering value added services and creating long term value for mutual benefit was the key. technological innovations made it necessary for the vendors to adopt strategies for customer retention. 4. closing gap in quality and performance. commerce.
success 30 . Bhaskar Bhaggi Sr. ICICI NATURE AND SCOPE OF CRM The Customer is King! This credo is more powerful. Vice President.NATURE AND SCOPE OF CRM “CRM IS ALL ABOUT GETTING CLOSER TO YOUR CUSTOMER” -MR. relevant and true today than ever before. In a truly customer driven economy.
8 billion in1999 to $11 billion by 2003. Customer Relationship Management is one of the hottest and most talked about topics in the industry today and for good reason. Simply stated. It is best described as the blending of internal business process: SALES.depends on a company’s ability to be with the customer on a round with clock basis…satisfying all their product and service specific needs. 31 . CRM solutions empower business to more efficiently and effectively manage the activities that affect their relationship with their customers. Customer Relationship Management (CRM) is about finding. Industry analysts recently reported that CRM expenditures will grow from $2. create a positive customer experience and build customer loyalty. getting. CRM should finally enable “A TARGETED MUTUALLY WITH BENEFICIAL PROFITABLE RELATIONSHIP INDIVIDUALS AND GROUPS”. and retaining customers. MARKETING AND CUSTOMER SUPPORT WITH TECHNOLOGY. The ultimate goal is to meet and exceed customer expectations. CRM is all about building long term business relationships with your customers.
And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. Understanding each customer becomes particularly important. recognize and reward best customers disproportionately. CRM system should respond to the customer needs. ` DIFFERENTIATING CUSTOMERS Most CRM systems allow for very little freedom to customize to specific industry verticals. Since the customers needs emerge from the products and offerings of the industry. 32 . • Increase Loyalty – Loyal customers are more profitable. Besides for the same product or a service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer.Key CRM Principles: A good CRM solution should allow for: • Differentiate Customers – All customers are not equal. • Differentiate Offerings – Customers appreciate customized offerings. • Keep existing customers – Its 5 to 10 percent cheaper to retain current customers than acquire new ones. • Maximize Lifetime Value – Exploit up-selling and cross-selling potential.
What CRM needs to understand while differentiating customers is • • • • Sensitivities, Tastes, Preferences and Personalities. Lifestyle and age. Culture, background and education. Physical and physiological characteristics.
CRM solution needs to differentiate between a low value customer and a high value customer
Low value customer requiring high value customer offerings. Low value customer with potential to become high value in near future.
High value customer requiring high value service. High value customer requiring low value service
KEEP EXISTING CUSTOMERS Grading customers from very satisfied to very disappointed shall help the organization in always improving its customer satisfaction levels and scores. As the satisfaction level for each customer improves so shall the customer retention with the organization.
MAXIMIZING LIFE TIME VALUE By identifying life stage and life trigger points by customer, marketers can maximize share of the purchase potential. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances.
It is an endeavor of ant corporate to see that its customers are advocate for the company and its products. Any company will like its mindshare status from being a suspect to being an advocate. Suspect----prospect-----customer client-----supporter-----advocate.
Customers have to invest in terms of its product and service offerings to its customers. It has to innovate and meet the very needs of its customers so that remain as advocates on the loyalty curve.
Referral sales invariably are low cost high margin sales. It has also the implication of being not “on time scale”. Besides, referral sales are likely to induce more satisfaction.
SUMMARIZING CRM ACTIVITIES
The CRM cycle can be briefly described as follows:
1. Learning from customer and prospects. 2. Creating value for customers and prospects. 3. Creating loyalty. 4. Acquiring new customers. 5. Creating profits.
BENEFITS OF CRM
Profitability-Driven Account Planning - Enables commercial
banks to better understand the overall needs of their customers and drive
3. Relationship-Driven Sales . Key components include consistent credit request processing and streamlined account origination which helps increase the quality of credit portfolios. fee based products to the appropriate customers. Key components include profitability-based customer segmentation and integrated alignment and performance management to allow commercial banks to coordinate their efforts and drive cross-selling of non-interest. and superior service to their customers. Components such as value-added personalized service and proactive outbound service enable organizations to provide fast. End-to-End Credit Management . Compliance with regulatory procedures (such as Regulation B loan notification requirements) is built into the workflow of the solution set. 4.Enables the efficient and consistent processing of commercial loans.Includes streamlined proposal and credit document generation.customer profitability. efficient. 2. Banker Productivity . 36 . 5. Customer-centric Service . Efficient product installation improves banker productivity by automating time-consuming manual tasks.Allows commercial banks to increase customer satisfaction and retention.Includes components such as intelligent client coverage and enterprise call reporting that help commercial banks better coordinate limited sales and product resources to drive revenue growth.
37 .Banks know that the best ever marketing strategy is to combine all enterprise resources to find new customers. retain existing customers and to make them referrers. CRM SALES MANAGEMENT STRATEGY .CRM STRATEGY - The basic CRM strategy is to align an entire organization to service the customer better.CRM offers plenty of tools for automating and managing sales processes. Superior encryption techniques with safe data transfer and sharing tools. No duplicate data. CRM DOCUMENT MANAGEMENT STRATEGY .CRM tools are capable of delivering all customer information to everybody in need. A wide range of CRM marketing tools are available for this purpose. no double entry. customer preferences and priorities. Detailed customer reports can be accessed with customer service histories. Real-time data backup strategy. CRM CUSTOMER SERVICE STRATEGY . All sales persons will have access to key customer. CRM MARKETING STRATEGY .Banks hosts all enterprise data in a web-based centralized always updated CRM database accessible from every where at every time. no data loss. product and company data and all sales managers can effectively monitor and co-ordinate their team.
(CRM) process management tools are specially designed for streamlining small and medium business CRM practices. open-source features. The simplicity in use. 38 .CRM strategy also covers many other business processes. CRM process management tools follow a set of simple customizable rules that helps in planning. As you know. etc. • Sorting the key information to find right opportunities. CRM PROCESS Understanding customers’ tastes and requirements with precision and effectiveness and serve them in the way they want. sales territories. • Planning marketing management. and CRM is the process of doing it in a planned way. • Delivering appropriate information to users who need. processes. customer preferences. CRM PROCESS MANAGEMENT INVOLVE THE FOLLOWING STEPS • Getting all key information needed for CRM process. a satisfied customer can bring many other customers to you. leads sales management and after-sales management management. contact management. and web-based CRM allow users to develop right CRM strategies according to their industry. implementing and analyzing CRM processes in the right way.
• Providing real-time reports and analysis about on-going processes BANKING ON CUSTOMER FOCUS 39 . • Regularly keeping the contact with the customers.• Pleasing customers with respect to set rules and plans.
Indian banks can take a cue from this and redefine their strategies. that customer service often received short shift. 40 . many banks have been so absorbed in their own internal issues. Intensification of competition after liberalization has compelled the banks to get their acts together and focus more on the customer.BANKING ON CUSTOMER FOCUS Long serpentine queues. The industry propensity to raise fees to boost non-interest income hasn’t helped either. particularly merger – driven cost – cutting re-engineering. interminable waiting hours. To improve customer satisfaction US bank marketers are experimenting with new techniques to capture valuable feedback. these were the characteristics of Indian banks. unfriendly staff – till recently. Consumer surveys continually highlight customer service as a weak spot for financial institutions. For the last decade at least.
found nearly half of the customers agreeing “it wouldn’t take a lot” for them to move to other bank if the other institution “really treated me well”. employee feedback groups. an analyst. To help stem those defections. and online surveys. The quest for data has bankers turning to a wide variety of information gathering techniques. A survey by New Ground Resources Inc.” says Kimberly Collins. institutions hope to gain improved insight to devise strategies for returning their loyalty. “Banks have realized they are not effective at gathering information about their customers and are trying to figure out how to change that. particularly non-brokerage and mutual fund companies. Such tactics are supplementary with traditional strategic research methods such as market survey and bench marking studies. 41 . Through these methods. banks need to improve their customer feedback mechanisms. Besides annoying customers.THE RESULT: Banks needlessly lose some of their best customers to other providers. such as complaint data analysis: call center exit surveys. traditional direct mail and telephone surveys are removed in time from the customers’ actual experiences at bank. Dischanted customers are voting with their feet says Charlene Stern vice-president at the Chicago based strategic marketing firm.
The intent of most of the newer techniques is to get closer to the emotions driving customer behavior and to gauge that sentiment closer to the time of the transaction. Online surveys provide immediate feedback. however and some can actually backfire on the institution. Telephone surveys. more immediate information. “Customers don’t want to be bothered. distribution at fleet Boston financial corp. M. can be useful for sporting and tracking broad trends. That’s why experts advise a comprehensive and balanced approach. so that feedback can be obtained with a minimum of distraction. wile customer focus groups then help the institution drill down and identify specific service problems. Instead of calling customers at dinnertime. with specific customer groups.g. so 42 . “Successful approaches vary with the objective of the research. No one techniques is 100% accurate. And the telephone surveys themselves have been revamped to provide fresher. for e.D. Fleer Boston conducts a five – minute survey of a random selection of customers who connect to the bank’s call center on a toll free line.” says Robert Hedges. Hedges says. The key in most cases is to weave queries into ordinary interactions between customers and the institution. but might annoy customers if they bear too much resemblance to the much despised Internet spam.
” says Michelle convey. EXIT SURVEYS Before the 1980s. 43 . In the days when banks focused on their local markets and tellers knew many customers by name.we have with them. when geographic restrictions were liberalized. quality leader at JP Morgan chase & Co. in New York City. banks had an easier time understanding their customers. bank marketers needed only to conduct simple telephone or branch surveys to gauge customer sentiment.
Meanwhile. New Ground surveyed 160 banks customers in three cities as to what advice they would give their own banks if those institutions wanted to keep their business. Cost is one consideration. M.The advent of regional and national banking has changed all that when institutions sprawl across multiple regions. of Bank 44 . don’t work so well anymore. The increasing use of electronic channels. This leaves the institution searching for alternating feedback mechanisms. telephone call centers and PC banking. what suits to a customer in one area may not appeal to those in another. Customers trash the survey letters without reading them and use voice-mail to screen out unwanted telephone surveys. getting a more accurate data about the customers is becoming more important as evidence accumulates of growing disconnect between banks and their customers.D. up from 38% in 1997. 60% cited a need for improved service. automated teller machines. also puts more distance between the customer and the institution. Bank attempts to improve feedback loops hindered by the fact that traditional data gathering tools. such as direct mails and telephone surveys. The local branch may not be the best place to sample opinion. Randall Grossman. The strongest demand was for more “humanized” personal service rather than more services or reduced teller lines.
Some of the newer techniques are designed to capture feedback when the customer’s response is fresher. allowing Fleet Boston to adjust its procedures quickly. Fleet Boston. “If we change the way our reps answer the phone. estimates a telephone survey of 500 people costs between $20 to $30 per person. has been Fleet Boston’s Hedges says this kind of survey provides the company with “Immediate Feedback” on its products and services.000 per group. The cost of hosting a traditional customer focus group can reach $5. Customer responses are tabulated and scored and then sent to call center managers the very next day. for e. Traditional surveys reach customers some time after their service contact at the bank.g. Immediacy is also important.One Corp’s retail unit in Columbus. 45 . Ohio. the survey will let us know whether that change was something positive or negative fro the customer.” Hedges say: This gave birth to Customer Relationship Management……. not including overhead or the cost of designing the survey – compared to as little as $5 per e-mail.
BUT A MATTER OF SURVIVAL” -Mr. SAS TECHNOLOGY IN CRM 46 . Kiran Pradhan Account Manager.USE OF TECHNOLOGY IN CRM “CRM IS NOT JUST A GOOD IDEA……….
With technology touching the way we live our lives. to support sales and marketing strategies. Some clear trends that can be seen are • More and more individuals will like to be treated as one single person rather than one among the masses. • With abundance of product and service offerings. expectations of individuals is fast changing. Like the television and the PCs revolutionalized our lives in the twentieth century so is wireless communication. Technology Component of a Total CRM strategy: The technology component of CRM offers bank a comprehensive understanding of its customers through data analysis and data modeling. • People wish products and services around the clock. 47 . consumers’ loyalty can be commanded by providing better portfolio of the products. CRM has become the central focus area which the entire gamut of organizational activities has to revolve around. • Speed response and understanding each individual one is the major key issues. internet and pervasive computing going to affect our daily pattern of lives.
Customer Lifetime Value: Banks can calculate the probable profit of a customer over a lifetime. Predictions for profit: Banks can accurately predict which products and services will appeal to the customer. banks can adopt individual marketing approaches rather than relatively ineffective mass marketing. and which they are most likely to purchase. so as to achieve one-to-one relationships with all the profitable and valuable customers. leveraging on technology is a must. Personalized services: Business can segment the market into specific targets by demographics or purchase types.Single Customer View: A managed and integrated view of the customer drawn from all contact points and product purchases enables financial institutions to better understand customers and therefore even serve them effectively. With a closer understanding of customers by small segments. To implement the CRM in the modern day organizations with millions of customers. The entire ranges of the technologies used in CRM are known as “Technology 48 . The Technological Ecosystem: Technology is the essential enabler of the CRM. ensuring that they don’t alienate low-value customers with high – value potential.
The sales force automation includes opportunity management. These activities include sales. customer service and marketing are considered as the front office activities. account management. and sales analysis activities. ANALYTICAL CRM 49 . TYPES OF CRM OPERATIONAL CRM The operational CRM includes technologies and business processes that can improve the efficiency and accuracy of day-to-day customer facing activities. These comprises of three building blocks. sales forecasting. field service and quality management.Ecosystem”. Operational CRM integrates the mobile office. front office business processes and the delivery channels and the back office activities. marketing and customer service. Analytical CRM and the Collaborative CRM. Mobile sales and field service are known as Mobile Office Operations. They are Operational CRM. sales encyclopedia. ERP and legacy systems are considered as back office where as sales force automation. Customer service activities include customer service. Supply chain management. and campaign analysis. Marketing automation includes activities like marketing campaign planning and execution. customer support.
50 . publishing. e-mail. Analytical CRM provides a 360-degree view of customer. sales calls. Web interaction can include self-service. and intelligent agents. The interaction can take different forms and diverse media. Collaborative CRM facilitates the customer interaction with organization and also interaction between sales and marketing people with the customer. The data mining tools and the OLAP tools perform the analysis of the customer and other organizational data and provide the results to the operational CRM with a view to maximize the outcome of each customer contact. which is essential to develop and optimize customer relationships. COLLABORATIVE CRM Collaborative CRM includes all the components that manage and integrate activities across the entire customer contact points. and catalog and product configurations. The interaction points include call centers or customer interaction centers. field service. web. profiling and segmenting the customers using the analysis tools and data warehouses. The collaborative technologies include call – centers.Analytical CRM is used for analyzing customer data to support operational CRM activities. fax. They are used to identify different pattern behavior of customers.
CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING “BANKS IN THE DAYS TO COME HAVE TO PROVIDE THEIR BROAD BASED SERVICE PACKAGE IN THE MIDST OF STIFF 51 . customer portals that are meant to provide information to the customers and can also include communications between communities.The interactions also include personalization or one-to-one communications. Finally the interaction between the organizational entities like automated sales forces and marketing with the customer in field comes under the umbrella of collaborative CRM.
not just an account number. Banks earned customers’ loyalty on the basis of personal relationships. ATMs. The model of the personalized bank is quaint memory. deregulation and globalization forever changed the face of banking. and on faceto-face interactions and long term knowledge of the customer as a person. where the teller was your neighbor’s sister-in-law. and your family had conducted business for years.COMPETITION. All else being equal. the bank manager knew you by name. Technology. TO ENSURE THEIR COMPETATIVE EDGE IN FUTURE. trading on history and mutual loyalty. replaced by national and multi-national service providers. 52 . it was so easy to select your bank.” -UNKNOWN INTRODUCTION In simpler days. You choose the local bank. customers chose an institution because it was convenient and personal. THEY HAVE TO SURPASS THEIR RIVALS IN THE AREA OF QUALITY OF THEIR CUSTOMER SERVICES. commoditization.
No matter. they wage 53 . most players hold a relatively small and unreliable market share. They spend large advertising budgets on television and print ads to lure new customers. regional. say consumers. yet it has eliminated the personalized nature of banking. This new order calls for a new mindset. keep them and maximize profitability from each all while streamlining product costs and customer contact channels. in the mailbox. Retail bankers have to behave more like retail merchants. For banks and other financial institutions this competition makes it difficult or rather impossible to show competitive differentiation. Automated call systems and a proliferation of product choices. national and global competitors.Internet Banking. appear. In this increasingly fragmented industry. Customers stick around until enticed by the latest short term interest rate or direct mail offer. none of them fettered by traditional ties of geography and familiarity. For consumers. . A typical financial institution has thousands of local. pre-appeared. and harder than ever to show profit. . who have traded loyalty for the ability to pick and choose from the latest deals-of-the-day that. this competitive scene has brought a wealth of choices. focusing on ways to gain customers. Banks have been doing that all along.
Banks need to reconsider their traditional focus on product lines. So what’s the problem? The problem is that these measures fall short of the potential to truly maximize value from the existing customers. not just a series of transactions. Knowledge dissemination has been propelled by electronic and mass media campaigns. It’s time to adopt comprehensive view of the customer as a part of continuum. Today’s knowledge savvy consumer is challenging the Indian retail banking industry to redefine itself. THE CHANGING SCENARIO IN BANKING With opening up of the economy many private sector banks have joined the fray and are offering a plethora of products and services rechristening themselves as ‘financial boutiques’.ambitious campaigns to cross sell services to the existing customers. In the current competitive scenario – for 54 . and can even be self defeating. They constantly monitor and seek to increase sales in each product line.
succeed and make profit. The battle of the banks. there is hardly any option but to learn from and actively respond to customers’ needs. is taking on a new urgency. Banks offering retail products need to reorient their strategy from a product centric to a customer centric focus to attract and retain high net worth individuals (HNI) and profitable customers. banks are finding it increasingly difficult to meet the high growth expectations. Ensuring a good customer experience at every customer touch point is the corner stone of a successful growth strategy. In the current falling interest scenario. for gaining a greater slice of market share. In order to bolster their top line banks are increasingly looking at newer ways and means of achieving organic growth through strategies that enable acquisition of new customers and retaining the loyalty of the existing customers. 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.a bank to survive competition. A good customer experience 55 .
Incidentally. With the emphasis on ‘delivering results’ most bankers are resorting to customer grabbing. rather than customer cultivation and creation.will drive customer acquisition and promote customer retention. with the result that customer churn is the order of the day. bankers are fully aware that replacing customers increase the relative cost of new customer acquisition. The entire service industry is now metamorphosed to become customer specific. The management of customer relationship in the financial service industry demands special focus. it is a drain on the existing resources of the bank. This in other words is the hallmark of a successful CRM strategy. Emphasis on CRM arises on account of the confronting retail managers – managing multiple customer touch points which sell the burgeoning complex products with the attendant risks and rewards. which translates into increased profits. Therefore. and managing to sustain and achieve growth and profits. Bankers are conscious of the relative costs of acquiring new customers. the challenge for the 56 . Moreover. which can be better deployed for growth initiatives.
model “what-if” scenarios. assess and maximizes lifetime value of each customer.banks is to retain and deepen the profitability of the existing customer relationships. From an analytical standpoint. CRM links business process across the supply chain from back – office functions through all touch points. enabling continuity and consistency across a customer relationship. CUSTOMER CENTRIC ORGANISATION Banks and financials institutions are recognizing that they can no longer look at a customer from a specific product or snapshot perspective but must encompass the entire customer relationship to fully understand a client’s profitability. From a strategic standpoint. CRM mobilizes resources around customer’s relationships rather than product groups and fosters activities that maximize the value of lifetime relationships. CRM is a host of analytical data tools that enable banks to fully understand customer segments. and design and track effective marketing campaigns. 57 . predict customer behaviors. From an operational standpoint.
• Maximizing lifetime value of each customer through cross-selling. Those investments will pay off for banks by • Restoring the personal service connotation that previously removed. comprehensive view of every one of its customers. GOALS REQUIRING CRM SOLUTIONS The primary goals of banks that require CRM solutions are: CUSTOMER IDENTIFICATION: It refers to acquiring the customer centric data such as knowledge of customers’ current demographic details. retail financial services institutions are expected to spend some $6. With this base. • Enabling immediate action to retain the most valuable customers. This should allow the banks to generate a single. the banks must identify prime customers who require to be specially treated under CRM. • Increasing the rate of return on marketing initiatives. related products and their holding pattern with the bank.8 billion on CRM in 2001. • Enabling the bank to fulfill customer needs at the right time with the right offer.According to Meridian Research. 58 . • Fostering greater long term loyalty through relationship building. • Identifying high risk customers and adjusting service accordingly.
but also enable banks to offer their customer the additional services they might really want. a busy business may be offered internet banking etc. Banks should employ a CRM solution that consolidates information from all customer interactions. on a continuous basis. The operations can be aimed at getting the right customers and then retaining them by extending special treatment under CRM environment. CRM solution should adopt an integrated approach to customer needs. For example. CUSTOMER ACQUISITION: CRM is aimed at optimizing processes and functions related to the customer. All operations can be optimized and systemized to enhance efficiency and effectiveness. CUSTOMER RETENTION: Customer Retention is the most important focus of CRM. a savings bank customer may be offered a credit card or a housing loan. Every banking representative should have ability to 59 . which not only would build customer loyalty and business. This continuous learning process would help banks to bring out better products that target potential as well as existing customers. a minor customer may be offered an educational loan.CROSS-SELLING/UP-SELLING: Cross-selling and Up-selling are huge untapped opportunities for banks. whether it is personal contact or inquiries to the call center or the internet it should be kept in mind that it is many times costlier to obtain a new customer than to retain an existing one.
A dissatisfied Customer tells at least 10 other people about what went wrong with the bank. to enhance the competitive advantage and customer retention. 60 .access 360-degree view of any customer. in time. To achieve this. it will definitely stem the flow of new customers into the bank. if he receives a level of service lower than his expectations. Hence. which can trigger an exodus of customers from the bank. Else. On the contrary. beyond the level of satisfaction. banks must continuously innovate new producers and features. using technology as a tool. the banker should make all efforts to improve services on a continuous basis. he is dissatisfied. the prime ones. Banks operate in a very dynamic market and it is important to be proactive to delight a customer. at least. he is satisfied. CUSTOMER SATISFACTION AND DELIGHT: When a customer receives a higher level of service that what he expects.
61 . electronic and wireless. It aimed at providing information to employees and documenting all customer interactions across channels such as personal contacts.CRM TOOLS FOR BANKING CRM Tools can be broadly classified into Operational tools and Analytical tools: OPERATIONAL CRM Provides the software support for business that requires customer contact. telephonic.
For e. 62 .g. Analytical CRM can trace this and the banker can offer him a loan with better benefits and in the process benefit himself. ANALYTICAL CRM Helps banks make sense of the information collected. the operational CRM can alert the call center of the customer’s account status and other details.For e. if an important customer dials to the bank’s call center. if there is a monthly debit of certain amount in the customer’s account by means of cheques in favor of some other bank. it is an indication that the customer is having a loan with that bank. It helps in tracking the activities of the customer on a real time basis. It is aimed at utilizing the customer’s potential to the maximum.g.
RETAIL BANKS PLANNING FOR CRM “The prerequisite for successful CRM in banks is to have a thorough understanding of the organizational structure and environment. Analyze the product environment. Preparing for CRM involves three important steps 1. it is necessary for the banks to lay a solid foundation on which the edifice of CRM can be built. Understand the bank’s products. 2. 63 .” RETAIL BANKS PLANNING FOR CRM In order to derive maximum advantage. 3. Understand the organization environment.
Inputs received from customer interface staff are executed and delivered by the transaction processing personnel. The reason can broadly be attributed to • Lack of understanding of the line and staff functions and the overall structure and organization. This is common in the case of loan products. web portals and written queries. the skill-set required for the components are unique. customer call centers. Understand the organization environment There are essentially two components to the services provided by banks: CUSTOMER INTERFACE and TRANSACTION EXECUTION. While both components are complementary in nature. Very often we come across a situation where there is dichotomy between what the field staff assures the customer and what the transaction executive delivers.1. This holds good for both internal as well as external customers. 64 . Transaction execution is the forte of the operations staff and IT. • Inadequate knowledge about the sphere of operations at different levels. Components of customer interface are field sales staff. Customer interface executives who do their homework on the above issues are likely to make commitments to the customers which cannot be delivered.
• Failure to judge the idiosyncrasies of superior peers and subordinates.
2. Understand the bank’s products
Despite banks organizing internal campaigns and contests on themes ‘know your products’ experience has shown that expect the winners of the contest, the rest of the pack woefully lacking in product knowledge.
Walk into any private bank or public sector and enquire about demat account operation or the procedure for obtaining cash credit limits. Chances are that the executive would answer one query and refer you another table for the second. Your worst nightmares is when you call the bank for the above information and are informed that the person who can provide the exact details is not in his seat and you are politely requested to cal back again. Improvements in the area of CRM are evident since the executives in some banks ask you to leave your phone number so that the concerned executive can call back.
What is being suggested is not to do away with the policy of having experts to answer customer enquiries but to equip every executive with an in-depth knowledge about his/her ‘baby’ while acquiring adequate
inputs to nurture your colleagues ‘baby’ in his/her absence. Executives must master the art of ‘baby – sitting’. Adequate knowledge about all the
products of the bank would ensure that the CRM efforts are finally entrenched.
Analyze the product environment
Enhanced service competency and product knowledge are the building blocks in a relationship – building exercise. A ‘professional’ should be equipped with the following adequate information: -Competitors by rank: • Close competitors for the products handled. • Their strength and weakness with respect to each product for which they compete with you.
-Analysis of marketing strategies adopted by competitors’ that catapulted them to the top slots
-The bank’s status vis-à-vis competitors’ as also the relative market niche being created to
-Knowledge of strengths and weakness in relation to the product/organization.
MANAGEMENT GAME-PLAN OF CRM
Some of the time tested and popular strategies adopted by banks towards relationship building and management efforts range from sending out a greetings message on special occasions, data mining and cross selling to Organizing mega events or ‘melas’. Experience has shown that each interaction at an event may not result in a sale; nevertheless the aim to make every interaction a potentially profitable opportunity to offer additional value to the customer.
Again, banks embarking on event driven marketing strategies are in a better position to feel the pulse of the customers and channel their energies towards meeting customer expectations. The other advantage is that this strategy results in a greater return on marketing investment coupled with reduced marketing costs, lesser cost of communication reaching out to a larger targeted audience and a higher response rate.
Campaign management in retail banks is growing by leaps and bounds from single channel mass campaigns to multi-channel targeted campaigns. Technologies has evolved to such an extent that management can keep a tab on real-time status of a campaign, complete with client history to enable devising an appropriate action plan.
Proliferation of services due to intense competition has turned the banking into a buyers’ paradise. “The more you give the more one wants” seems to be the adage. Consider the introduction of ATM facility that was meant to reduce transaction pressure on daily basis.
More branches entail deployment of more staff. conducts a regular CRM audit and offers suggestions and ideas while filing the ‘CRM performance report’ with the top management. bank breaches appear to be mushrooming all over the cities.In their anxiety to reach out to more customers and grab a bigger piece of cake. 68 . A CRM focused approach that starts with the top management. percolates and permeates all levels of organizations. is the need of the hour. Recruitment and deployment of personnel without adequate inputs relating to issues explained above have a detrimental effect on CRM. Success of such a strategy will be possible only when an exclusive CRM team ensures dissemination of the CRM philosophy.
BY THE PEOPLE. FOR THE PEOPLE” 69 . CRM IN PUBLIC SECTOR “OF THE PEOPLE.CRM IN RETAIL BANKING.
an effort has been made to present a relative weight age among various factors that goes into making the vendor selection decision which can additionally be used by software vendors and its analysis and methodology used for arriving at the same has not been detailed herein. The surprising aspect that came out from the study was that though banks were aware of the benefits of CRM.CRM IN RETAIL BANKING CRM has been in India for over seven years now. a key differentiator for retail banks is the way their customers view them: how satisfied/dissatisfied they are from their respective bank services – in short how loyal the customers are towards their banks. It is found in a research that the cost of acquiring a new customer is over 5 times the cost 70 . Benefits that banks can look forward to form CRM In highly competitive and dynamic market landscape. Additionally. But its penetration into the industry in general and that into the financial services market in particular has been rather uninspiring. they were skeptical about its applicability to their organization. The root cause for this is the astonishing delving deeper into the CRM retail banking application and finding out any hidden undercurrents that have been affecting the CRM adoption in the said segment.
Apart from enhancing customer satisfaction. the adoption of CRM philosophy and its tools leads to the following benefits: • Real time forecasting for true sales pipeline visibility and more accurate decisions owing to the ability to predict what all products the customers are expected to purchase over a period of time. sales and customer service staff. one cannot be complacent as far as customer satisfaction is concerned. this makes cross selling and up selling easier. • Streamlining of the business process across different functions aligned to the best practices. Cross selling to existing customers produces incremental underwriting accuracy. • Providing an integrated view of customers across companies and channels. • Increased productivity of managerial executives. Research shows the more products a customer buys from a firm. • Giving customers the ability to transact through multiple channels. the less likely that person is to leave it. 71 .of retaining an existing customers. • Reduced training costs.
• Turn around time (TAT) for closing leads. 72 . These trends reflect a fundamental change in the way banks interact with the customers they have – and those they want to acquire. rising customer expectations and capitalizing on new market opportunities are at the top of every bank executive’s agenda. more than ever before. opening accounts and closing service requests can be drastically improved. several emerging trends affect the approach and tools banks employ to achieve sustainable growth. As banks strive to create and manage customer relationships. the ability to maximize customer loyalty through close and durable relationships is critical to retail banks’ ability to grow their business. Intensifying competition. Today. Retail banks are facing greater challenges than ever before in executing their customer management strategies. • Campaign definition and performance tracking on a periodic basis (for different financial programs). escalating attacks on customer information. proliferating customer contact channels.
can claim to have all channels working on a common platform or claim even to share information or process across all channels. however. No institution. IT managers within the bank. Today. for e..IMPROVING CRM MANAGEMENT IN BANKING WITH INTEGRATED DELIVERY CHANNELS The capability to integrate two or more delivery channels through shared technology has only recently been deployed in any significant way. Quantifying the effects of fixing this problem proves to be tricky. 73 . These channels can. know deep down that integrating the channel is the right thing to do because some benefits of channel integration are intuitive if not scientifically provable. as well as business managers that rely on the delivery channels to their service products. however.g. The example of inconsistent account balance information is one that integrated delivery channels can solve and that most bankers agree is a source of frustration for the customer. deliver consistent architecture. a handful of retail banks boast of globally integrated delivery channels that are built on standard technology principles.
On the sales side. marketing and product line managers have benefited greatly from a relatively plentiful source of analytics systems in the market. But the actual use of the information from these systems has been limited to mail campaigns and outbound telemarketing. these rates have improved somewhat with the improved customer knowledge in hand. or are in the process of designing. Although. predict propensity to buy. Customer knowledge databases and analytic engines have made the selling process more predictable then ever before. The implementation of integrated delivery channels has to date focused on the service side of the relationship equation. both of which traditionally have had low response rates.SERVICES AND SALES PROCESSES MADE MORE PREDICTABLE Many banks have implemented. integrated delivery channel architectures based on these soft benefits as well as on the goal of maintaining and deepening the customer relationship in the face of competitive pressures. 74 . even recognize attrition behavior thanks to the segmentation and focus of solution providers in the analytics markets. Bankers are getting better at knowing how to calculate customer profitability.
EFFECTIVE USE OF INFORMATION BUILDS KEY CUSTOMER BENEFITS The issues surrounding the collaboration of knowledge and delivery have to do with the management of the data and the processes involved as well as some very emotional aspects of the customer’s relationship with the bank and the extent to which individual customers perceive the bank as a threat to their privacy. themselves. account. channels. neither the chicken nor the egg came first. perhaps. and then tread lightly. To build on the full strength of this collaboration. Data acquisition through customer interaction is determined by the delivery channels. banks need to completely understand the issues surrounding the use of knowledge. But the marriage of integrated delivery channels and customer knowledge is not a trivial arrangement. or through some integrated channel management architecture. Institutions are already collecting most of the available information today such as identity. technology is not the problem.Thus. Both arrived at the same time. for banks. For once. 75 . The opportunities to combine these powerful capabilities are built in to the very systems that enable them individually.
there seems to be no need to collect information that is not currently acquired.transactions performed. For now. So if a customer has an unresolved problem. to give insight into customer behavior. time of the day. 76 . specialized applications collect and analyze information about the customer interaction. and all the pieces of information that have some value to the institution. The shift to the existing use of data comes in the form of the centralized acquisition of this information outside of the transactional sense. Such basic information is included in the transactions that are sent to the core of the banking system such as a credit processor. Banks can also collect and store information about nontrivial transactions to provide continuity among customer contacts. What is required is the use of the data in managing the relationship with the customer in a more fulfilling way. Along with the use of transactional information by the systems that perform the basic units of work. itself. that information is available at all appropriate channels.
While many institutions are currently performing such analysis with a given channel. By itself. analysis of all external providers of service. This information can also be made available to the automated channels to keep the customer aware of the status of problems or account applications. But the real value in the effective use of customer information at the point of interaction comes from the customer knowledge systems that are becoming pervasive in most retail banks. • Using customer preference to understand the individual customer’s favorite channels for specific transactions. A FEW EXAMPLES OF THIS INFORMATION MANAGEMENT STRATEGY • Using channel analysis to model and predict demand at the delivery channels after marketing campaigns or to gauge the impact of channel downtime on service or revenue. and analysis of how customer uses these products. This is done by having recent problem reports or unresolved account applications available at all delivery channels to present the agent with what may be peripheral yet important information about the current state of customer relationship. 77 . tying to a quantified loss. the next step includes analysis of the customer’s behavior across in a broader context. this management of information from the delivery channels offers many benefits to the institution and the customer. • Keeping certain transactions open – ended to maintain continuity of service.
banks must begin from strategies around the use of information in the day – to – day contact with the customers. not entirely rational. The deployment of powerful customer knowledge systems will also increase as more and more useful information can be distilled from the myriad of resources in the bank IT network. Relationship training is more important 78 . As these two infrastructures evolve. so. The use of information between the knowledge systems and the delivery channels has yet to be fully realized. Already. Technology and policy can only go so far in ensuring that the use of information at the point of contact is not intrusive to the customer’s comfortable level of privacy. many institutions use information gleaned from the customer knowledge systems to suggest new products to the customers at the branch teller.POWERFUL CUSTOMER KNOWLEDGE SYSTEMS FOR THE FUTURE The pace of implementation of integrated delivery channel architectures will quicken and eventually prevail at top banks. Privacy is an emotional issue and. it has the potential to out space the customer’s acceptance of the bank’s knowledge. With most of the technology in place. As the capability to build on this flow of information grows. the integration between them will also increase.
Some facts to chew before we get started: 79 . about keeping the customer happy. It’s about increasing the bank’s benefit as well. being customer focused means to have a consistent. dependable and convenient interaction with customers in every encounter. simply put. But for many. it’s about trust as a result of knowing the customer and not as an excuse for misusing information. Most companies consider themselves customer focused and believe that in being so they are servicing the customer. the management of customer information at the point of interaction is about service. Companies can get a lot of mileage out of effective CRM practices. It’s about strengthening the relationship and showing the customer that the bank’s knowledge can lead to real benefit. about keeping the customer. and. not a business practice.than before as banks begin to learn more about their customers and use that information to bring financial value to them. CRM is just a philosophy to be bandied about in boardrooms. Finally. But essentially. CRM: Do you get along with your customers? Most companies say they do. and doing it in way that does not sacrifice the customer’s long term well being. Ultimately.
partners and vendors. or a business strategy. Out of this comes electronic customer relationship management (eCRM). and putting it in to place will require a set of integrated applications that will address every aspect of business of function and the customer. the suppliers.• It costs six times more to sell to a new customer than to sell an existing one. business functions and audiences. • 70% of customers will do business with the company again if it quickly takes care of a service. what they like. CRM is typically defined as an integrated sales. E-CRM goes a step ahead and adopts Web – centric approach that synchronizes customer relationships across communication channels. • A company can boost profits but 85% percent by increasing annual customer retention by just 5%. CRM is an integrated framework. marketing and service strategy that precludes lone existence and depends on coordinated actions among the customer. and what they do… 80 . CRM tools help companies understand their customers from a multi faceted perspective: who they are.
ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT (E-CRM) 81 .
E-CRM.“CRM IS A CORE ELEMENT IN ANY CUSTOMER CENTRIC EBUSINESS” -ANONYMOUS ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT E-CRM is an integrated online sales. E-CRM software provides profiles and histories of each interaction the organization has with its customers. is according to Paul Greenberg (2000). It describes improved and increased communication between an organization and its clients by creating and enhancing customer interaction through innovative technology. attract and retain an organization’s customers. is 82 . making it an important tool for all small and medium businesses. marketing and service strategy that is used to identify.
using the internet technologies. E-CRM implies interaction with the customer using these new technologies. by understanding customer’s needs and personal preferences. the organization will ensure this while dealing with the customer. EVOLUTION OF E-CRM Database marketing Behavior based marketing E-CRM 83 . E-CRM provides a high degree of self service to the customers. E-CRM integrates all the communication from and to the customer from various channels both.CRM on line. the traditional and latest technology based. New technologies mean availability of additional faster means of communication between the customer and the organization. It provides organizations with tools for a high level of interaction communications with the customers with personalized messages. E-CRM shares all the philosophy of CRM and the only difference is the underline technological architecture. For e. This definition dispels all the doubts people might be having about E-CRM..g. if the customer prefers to use emails and not telephone.
the six “E’s” of E-CRM are briefly explained as followed: 84 . Though the core of E-CRM remains to be cross channel integration and optimization. the issues which it impacts and other factors. The six “e” in E-CRM can be used to frame alternative definitions of E-CRM based upon the channels which E-CRM utilizes.Single channel Multiple channels Single enterprise view of customer integration of customer channels Outbound Campaign ROI metrics Many campaigns running simultaneously Higher effectiveness rates Opt-in-principle Strong customer metrics Many simultaneous campaign Very high response rates Leveraging customer information for specialized value proposition Out bound only Simple metrics <25 campaigns a year 2% average response rates 20% customers deliver 100%profits The SIX “E’s” OF E-CRM The “e” in E-CRM not only stands for electronic but also can be perceived to have many other connotations.
which drive smart asset-allocation decisions. challenging companies to keep pace with this increased velocity. Economics: An E-CRM strategy ideally should concentrate on customer economics. Electronic channels: New electronic channels such as the web and personalized e-messaging have become the medium for fast. which channel. Enterprise: Through E-CRM a company gains the means to touch and a shape a customers experience through sales. at what frequency? An E-CRM solution must be structured to deliver timely pertinent. E-CRM thrives on these electronic channels. 85 . Through. 4. 3. interactive and economic communication. Empowerment: E-CRM strategies must be structured to accommodate consumers who now have the power to decide when and how to communicate with the company.1. services and corner offices whose occupants need to understand and assess customer behavior. 2. directing efforts at individuals likely to provide the greatest return on customer communication initiatives. valuable information that a customer accepts in exchange of his/her attention.
External information: The E-CRM solution should be able to gain leverage information from such sources as third party information networks and web page profiler application. and compare anticipated ROI against actual returns through customer analytic reporting. evaluate customer interactions along various customer touch point channel. ONE MUST ADDRESS CUSTOMER OPTIMIZATION ALONG THREE DIMENSIONS • Acquisition (increasing the number of customer).5. An E-CRM strategy must be able to identify the expansion potential for each customer. 6. • Retention (increasing the amount of time that customer stays customers). Evaluation: Understanding customer economics relies on a company’s ability to attribute customer behavior to market programs. A company should be able to identify the opportunities to cross sell and up sell to the same set of customers. • Expansion (increasing portability by encouraging customer to purchase more products and service). 86 .
ECRM solution should also establish a central mechanism to determine which customer should receive which investment at relationship level. A DIRECT BENEFIT OF AN E-CRM SYSTEM INCLUDES • Service level improvements – Using an integrated database to deliver consistent and improved customer responses. This will improve the customer’s overall experience in dealing with the organization. The result is that an E-CRM organization to build more profitable customer relationships and decrease operating costs. marketing and service personnel with better. more complete customer information. WHAT ARE THE BUSINESS BENEFITS OF ECRM? Implementation of E-CRM system enables an organization to streamline process and provide sales. • Productivity – consistent sales and service procedures to create efficient work processes. 87 . • Revenue growth – Decreasing cost by focusing on retaining customers and using interactive service tools to sell additional products. • Customer satisfaction – Automatic customer tracking and detection will ensure enquires are met and issues are managed.
Opportunity management. Across every sector and industry. Direct mail. Lead tracking and response. 88 . • Customer service organizations can increase service agent productivity and customer detention while decreasing service cost. average order size and revenue per customer. • Marketing organization can increase campaign response rates and marketing driven revenue while simultaneously decreasing lead generation and customer acquisition costs. effective CRM is a strategic imperative for corporate growth and survival • Sales organizations can shorten the sales cycle and increase e-sales performance metrics such as revenue per sale representative. Telesales. Quotes and order configuration.• Automation – E-CRM software helps automatic campaign including Telemarketing. response time and request resolution times.
products and performance results using real time information across your business.HOW DOES E-CRM WORK In today’s world. unified organization that recognizes them every step of the way. Many organizations also have multiple lines of business that interact with the same customers. customers interact with an organization via multiple communication channels – the World Wide Web. field sales people. The E-CRM system does this by creating a central repository for customer records and providing a portal on each employee’s computer system allowing access to customer information by any member of the organization at any time. E-CRM system enables customers to do business with the organization the way the customer wants – anytime. dealers and partner networks. E-CRM gives you the ability to know more about customers. in any language or currency – and to make customers feel that they are dealing with a single. call centers. 89 . via any channels. Through this system.
• Service quality and trust. Speed of processing the transaction through e. E-CRM BENEFITS TO CUSTOMERS • Customer interaction and satisfaction. 90 .response. • Personalized services or one – to – one services.E-CRM BENEFITS TO BANKS • Relationship with customers. • Website to market product or services. • • Convenience. • Using e-mail for business communication. • Transaction security.
it is critical for any business to meet the expectations of the customers (that is changing ever so fast…) For long. with competition being the ‘key’ word in every industry. only enterprises thought of such applications as part of their business processes. Also. Companies that have fewer than 100 employees can now adopt and implement these applications. Also not to ignore. advancement and choice of technology have permitted the cost of these technologies to fall to an affordable rate.CRM EVERYWHERE By investing in CRM or e-CRM applications companies are looking at retaining existing customers and converting potential customer into lifetime customers. In certain industries. Various studies have reflected that the CRM industry is poised to grow at an exponential rate. with the advent of new technologies. customer retention is a key driver for profitability. According to a recent study by McKinsley. even the small and medium businesses have realized the importance of customer related activities and are adopting these technologies at a fast rate. Today. solution 91 .
GUIDELINES FOR A SUCCESSFUL E-CRM SOLUTION Customer data needs to be collected. It is this ability to transform raw data into actionable customer understanding that defines analytical e-CRM.based on e-CRM already account for a third of the $100-billion global market for customer care. stored in a format that makes it easily accessible for analysis and then analyzed by statisticians so that meaningful information regarding customer behavior. making the process 92 . friends and attitudes can be extracted. clean.
millions and solutions overrun budget become impossible to deploy. E-CRM initiatives are often implemented with to many business objectives in mind and managed by departments with different priorities and conflicting politics. In many instances. 93 . When it comes to an enterprise e-CRM solutions. few of the multi million dollars initiatives ever see the light of the day. let alone provide the desired results.indispensable to marketers in developing targeted initiatives and to management needing near term project.
By CRM it’s possible to develop a greater understanding of it by looking at its origin and the principles that drove its development. PRESENT AND THE FUTURE OF CRM CRM means many different things to different people.” -Anonymous THE PAST. “As the years have gone by CRM has gained global importance. PRESENT AND THE FUTURE OF CRM. 94 .THE PAST.
By then examining the present day definitions of what it means. By looking at the future of CRM. a number of key marketing concepts can also be used to see where CRM has developed from: • Satisfying needs. In addition to this. we more clearly see where the benefits may be derived and we where we should see CRM developing over the next few years. 1990’s – Relationship marketing. we can see the following clearly developments and progression over the last few decades: 1960’s – The era of mass marketing. the recognition of the true value of retention and the use of lifetime value as a business case. THE PAST Looking back at a snapshot history of marketing. 1980’s – Where niche marketing made millionaires of those who were best at it. 1970’s – Saw the beginning of segmentation. customer orientation. direct mail campaigns and clearly telemarketing. it is possible to understand more clearly how it could be applied to our business. 95 . the explosion of telemarketing and call centers all setup to develop relationships with the customers.
” DIRECT MARKETING “The planned recording. • Profit must be the consequence of delighting customers.• The organization needs to be arranged so that all functions contribute. It is possible to draw further information definition of marketing and direct marketing.” THE PRESENT 96 . MARKETING “Determining the needs and want of target markets and delivering the desired satisfaction more efficiently and effectively than the competition. analysis and tracking of customers direct response behavior over time…in order to develop future marketing strategies for long term customer loyalty and to ensure continued business growth.
Evaluate customer needs. Evaluate customer perception. STAGE SATISFACTION BASED STATE RE-ACTIVE CULTURE Meet customer needs.The key differences between the concepts of marketing and direct marketing is that CRM is about change throughout the organization (focused around customer) and that technology developments are enabling the concept. What we are finding is that the organizations are now moving through several stages of CRM. Respond to complaints. Minimal evaluation of PREFORMANCE BASED PRO-ACTIVE customer service level. 97 . Identify customer retention COMMITMENT BASED VERY PRO-ACTIVE factors. Continuous improvements.
THE FUTURE So what does the future hold? The astronomic development rates of technology are what many people see the key driver. However. remuneration. at least not for the foreseeable future. transaction types). email/web/e-commerce). volume. • Use your people. • Make the best possible use of customer information – particularly when you are transacting with them. • Be interactive. • Develop end to end customer processes. they need to look beyond this to the changes in customer expectations. • The web will create globalization but will replace the need for people. • Technology will consolidate (fixed and mobile telephone. 98 . • Recognize customer individuality. In terms of what the future holds • Customers will play a significant role in managing relationships service models will continue to change (skills.
CRM IN INDIA “INDIA IS A BIG MARKET FROM CRM” -DAKSH INDIAN CRM CO-SOURCING COMPANY 99 .
100 . This is why sales force automation became important and critical. irrespective of whether the communication is from operations. fax.e. Sales automation results in more accurate predictions as well. There are numerous channels of communication i. sales.CRM IN INDIA In India CRM satisfies three basic objectives for companies that are keen on retaining customers and increasing market share. Sales operations organizations have to make customer – facing systems more efficient and effective. 1. the company is aware of the interaction. 2. finance or support. CRM gives a complete set of tools that are required to improve efficiency. This is one of the key steps of CRM implementation. It offers a 360-degree view: A company should have a clear understanding of clients and their needs. It is a matter of continuous improvement. They problem lay in convincing the sales guy who believed in his personal abilities. e-mail (e-CRM). Personal Data Assessments and many other wireless devices. In order to get a complete picture these must be integrated and tracked. CRM optimizes processes and functions related to the customer: All operations can be optimized and systematized to enhance efficiency and effectiveness. telephone. systems. It means that whoever the company speaks to. sales force automation is critical. Corporates began to realize that in the face of increasing competition.
you can target him better. To learn from integration: The learning process should be focused on bettering marketing. All these differences lead to the importance and need for CRM. The whole idea is that if you know your customer better.3. SURVEY REPORT ON INDIAN CRM MARKET • The need for improved customer service and high global adoption shall drive the Indian market. This varies from customer to customer. Some customers may not like to transact over the net but may prefer physical transaction. • The high cost of implementation and low awareness of benefits is going to prove a major deterrent. The interaction will help an organization to bring out better products that target potential and existing customers. Their operations are aimed at getting the right customer and then retaining them by giving them the service they require. 101 . sales and any other function that interacts with the customer. Some customers have preferred channels of communicating.
ACCEPTANCE OF CRM IN INDIA
• Reduced Product Differentiation – 18% Response • Media Attention – 12% Response • High Global Adoption – 23% Response • Capabilities Of New Technology – 16% Response
Need For Improved Customer Services – 31% Response
• • • • • •
Lack Of Information About CRM Market – 12% Response Lack Of Success Stories – 8% Response Poor IT Infrastructure – 19% Response Low Awareness Of Benefits – 22% Response High Cost Of Implementation – 22% Response Lack Of Customer Orientation – 17% Response
CRM IN BANKS – INDIAN SCENARIO
One industry best suited for the implementation of CRM is the Indian banking and financial service, which has the highest growth potential and accounts for 22% of CRM license revenue in 2002. Banks such as ICICI bank, HDFC bank and Citibank are using CRM products. ICICI bank, in fact, has won the DM review World Class Solution Award in 2003 in the business intelligence category for its Teradata enterprise data warehouse solutions.
However, CRM market in India is still in a nascent stage. Indian banks haven’t yet seen big results from CRM solutions, probably because of improper implementation. Being short – sighted, they have adopted new technology without a clear understanding of how to integrate it with the existing system and processes.
Indian Banking Industry should aim to formulate strategies incorporating people, processes and technology issues. In accordance with the strategies, current and future IT initiatives can be formulated, prioritizing the related activities and their feasibility. Once this is done, implementation in a phased manner will definitely lead to organization’s success in achieving the goals.
it is about serving our customers.” -TOBY DETTER CRM HEAD.“CRM is not simply about a system. One of the benefits of CRM is that it would make a company’s customers more loyal. CRM involves knowing your customers individually and having some mechanism for interacting with them or hearing from them. But with the advent of CRM or OneTo-One marketing or loyalty. The company is getting a little higher up on the 105 . and customizing your business for them. This is an inherently integrated operation. Every time a company interacts with the customer. delivering on what we promised and having a shared vision on what it means having World Class Customer Service. the company customizes its service to be a bit more closely suited to the customer needs. CONCLUSION It used to be that one could think of marketing as totally separate form the rest of the business enterprise. the dynamics have changed. SHELL EUROPE.
The relationship with the customer is developing in its own context. The key is to develop and nurture a close relationship with customers by understanding their needs and preferences and catering to their requirements. Customers of today demand “UNIVERSAL BANKING”.customers learning curve. but also following through with an improved organizational approach. the diversity and range of products and services on offer form the banks are widening continually. Moreover the companies are making the product more and more valuable to the customer. Despite this. The banking industry in India has undergone volatile changes during the last decade and one of the major areas of change has been Customer Service. The challenge for the banks is to work towards ensuring that the customers prefer their products and services vis-à-vis that of their competitors. That not only means listening carefully to what customers have to say. the jury is still out on whether CRM has fulfilled its promises. technology. employees and information across an enterprise to attract and retain profitable customers. 106 . ‘Dog Eats Dog’ competition in banking has almost made CRM an in evitable solution. With customer expectations becoming increasingly demanding. Much has been written about customer relationship management (CRM). It has been called a strategic tool that combines business processes. This is possible if CRM is implemented in its true spirit.
because organisations like Standard Chartered Bank. sometimes even fledgling organisations with better planned systems and processes. especially those focussed on retail such as banks. BPL Telecom and Air-India have successfully used these tools—and benefited. spending patterns. insurance providers and telcos. Rivals. needs. ICICI Lombard. It is a combination of technology and process change that has worked.Banks and telcos still create silos of information with little scope for sharing information. The difference lies in the way CRM has been deployed at these organisations. 107 . Has CRM in India been reduced to an empty buzzword that’s tossed around so that a company appears to be keeping up with the industry? Not entirely. have suffered because of a lack of understanding of their clientele in terms of behaviour. All of us have received unsolicited calls and mail from financial companies and telcos asking us to buy products that we don’t need and sometimes already have! Companies. have grabbed some of their customers. and causes of dissatisfaction.
CRM BASICALLY IS: 108 . 4. customer pleasure. Businesses with wealthy CRM approaches and applications will result in a large raise in sales. 3. They must continually invent new products and services in the light of envisaged changes. They need to address the demands based on supply chain. Here. They need to face up to increased competition from within the sector and from new entrants coming into the financial services market. and merely the overall achievement of the business. the definition of CRM can be stated as a way through which companies can interact with their customers and so serve them better. They need to satisfy customer needs that are complex and difficult to manage. The challenge that lies ahead for banks is Four Fold 1. 2.Customer mentalities are always growing. and business services should increase along with these potentials.
Open-source CRM software made up of modules. Web based easy to use interface accessible from anywhere. 360 degree customer visibility and automated lead management. 30 day free trial. RECENT SURVEY ON CRM 109 . Integration with office and web-based systems and programs.CRM Vs Traditional CRM • • • • • • • • • • • • • • No in-house infra structure requirement. Always free updated to keep you on top. Extremely mobile with mobile/PDA/wireless Editions. Entirely customizable to get desired result. Centralized well sorted enterprise database. Better protection to enterprise data. No requirement of in-house technical persons. Better sales pipeline visibility. Scalability and adaptability.
up form 68% in 2006 According To A Survey Of 25. if I meant it was easier to contact a customer service representative for enquiries. Converso. would seriously consider changing a provider. The survey commissioned by outsourced contact centre. a Harris Interactive study sponsored by Right Now Technologies. rather than be faced by a recorded telephone message or no facility to speak to a live operator. The Majority (96%). 80% of consumers will never go back to an organization after a bad customer experience.000 Consumers. 110 . also found a disgruntled 86% of Brits said they find themselves constantly saying yes or no to an answer phone rather than actually talking to someone.According To The Second Annual Customer Experience Impact Report.
sales. 111 .THE MANTRA FOR CRM SUCCESS For companies that use CRM and those that plan to. marketing effectiveness. evolved and matured over the years. It is not about solving a technology problem.” CRM is a management strategy that enables an organisation to become customer .focussed and develop stronger relationships with its clientele. it is important to understand that CRM technology has developed. responsiveness and market trends. Technology can play a significant role in CRM being an enabler. it is a process that aligns your business around your customers’ needs. CIOs and even CEOs are asked to repeat this mantra: “CRM is a business initiative and is not about technology. To create successful customer-centric organisations. but thinking about CRM solely in technological terms is wrong. It helps piece together information about customers. It is now a reliable process that combines business and technology to power a customer-focussed organisation.
CRM AT STANDARD CHARTERED My discussion regarding CRM in Banking was with Ms. 3. as it is easy to identify them. Customer-attrition is a serious threat to the bank and efficient CRM strategies can help to reduce customer attrition.India Commercial Banking. We have (CIC) Client Identification Code which is unique. Head.Shyamala Borkar. Standard Chartered. etc. Client Services Group . PAN card No. She gave me all the valuable information regarding the various CRM strategies adopted by SCB and the various techniques adopted by the bank to manage its customers effectively. we are going from the manual to the web based system as a part of SCB group strategy. 1. What are the CRM Strategies that Standard Chartered Bank follows? Why is it essential? --To address the drawback of the current query system. It was an enlightening experience for me. Also based on their A/C No. Address. and easy to access. How do you segment and identify your customers? --Basically we have three segments of customers they being PLATINUM. KEY and CORE. 2. We use some caller verification code. Is customer satisfaction a part of your banks vision? 112 . which is user friendly.
Our Complaint and Feedback system is called as COMMAND. What strategies Standard Chartered Bank follows for customer retention? --Best of service. • Dedicated key service managers. We believe in going beyond Call of Duty. Do you maintain a complaint management / feedback system? --Yes. our vision is to have customer delight and “To be a service partner with our clients delivering simply first class service”. • Proactive calling with clients. Comprehensive pricing. 5. 4. SCB tracks all complaints on a daily basis. We have (TAT) Turn Around Time which enables us to solve the complaints within 8hrs time. Customer visits and Service reviews. for KEY clients. • Specialized services 6. Do you pay attention to all your customers effectively? 113 . it is very imperative. Strategies followed to enhance customer loyalty --Segregation of services based on KEY and CORE client segments. such as customized services and normal services. We have • Dedicated telephone No. 7.--Yes.
advertisement. 114 . It enables us SCB to retain customers. calling up our clients etc.--Yes we pay a lot attention and cover all the segments of our clients. Do you know what it costs when you lose a customer? --We believe in a well-built strategy that helps SCB to retain its existing customers. Do you make recommendations to customers about the products and services that suit their needs? --Yes. We visit the client along with operations and sales team. Do you regularly make up an inventory of all the needs and expectations of your customers? --Yes. absolutely. 9. It is about 0. wants. we distinguish our services based on (CR) Client Relationship Key and Core Coverage Model. 8. Do you organize meetings with customer groups to learn about their needs. this happens during monthly service review visits and feedback from our sales team. and pitch the wallet share.1%. We conduct a visit on regular basis (Covering all segments). 10. enhance loyalty. 11. ideas and complaints? --Yes. its our deep-seated priority. Hence SCB does not lose a customer time and again. Its via our website.
It is based on • Nature of business • Authorized signatory • Source of business • Line of business etc. 14. Do you identify where improvements are needed from the customers perspective? --Yes.12. we do. our system is a core system which covers all the profile and characteristics of our clients and it is stored in this system. Improvement areas are identified by the way of 115 . 13. SCB has (TAT) Turn Around Time with the help of which complaints are solved within 8 working hours. 95% of complaints are solved within 8hrs and 5% are Holding Reply as they are investigation related but are solved within 2 days time. Do you have an up-to-date databank in which all characteristics of your customers are registered? --Yes. Are customer complaints replied to within a day and solved with within a day or two? --Yes.
• Service review • Command system • Feedback from sales team • Customer visits 15. SCB is a multinational bank and all the products and services are immediate. 116 . infact we try our level best to deliver it before the period expected by our clients. Does top level management also personally handle complaints of your customers? --Yes. Its even better than what they expect. 16. Are products and services delivered within the period expected by the customer? --Yes. all the employees are involved in complaint management process and personally handle the complaints of customers and are registered in the Command system.
cost. fee income. It answered the financial queries and generated reports at a broad portfolio level. 117 . which facilitated and managed transactionoriented applications. debt situation. The system was reliable but provided little scope for in-depth customer analysis. and profits. interest income. The objective was to analyze new business opportunities. which included total earnings. which is the key to survive in the fiercely competitive financial marketplace. and boost profitability.CASE STUDY: STANDARD CHARTERED CRM BANKING ON CUSTOMER RELATION Standard Chartered Bank was looking for a tool that would help it analyze the huge volumes of data captured by its OLTP systems. provide better customer service. IMPEDIMENT Standard Chartered Bank (SCB) previously used Online Transaction Processing (OLTP) system.
They wanted a solution that can perform analytics on the valuable customer data to answer queries across divisions. It went for the SAS Customizable CRM Solutions. SCB decided to use a suite of products from SAS. the bank had to implement a data warehouse and analytical solution. This information can help a bank take critical business decisions in the dog-eat-dog financial world. After evaluating a number of vendor offerings.The bank realized that it needed to go a step further and deploy a solution which it can use to analyze the huge volumes of data captured by its OLTP systems. to the right executive and at the right time. This exercise is a must for survival in a fiercely competitive environment. The answers would then enable them to proactively service customers and thereby ensure customer loyalty and retention. 118 . It was clear that in order to achieve the desired benefits. RESOLUTION The bank's IT team looked at the business requirement in detail and deduced that the organization needed a data warehousing and analytical solution that would help analyze customer data to enable fact-based decision making in areas ranging from acquisition and risk management to cross-selling and portfolio management. The idea was to search for crucial nuggets of information from the vast amounts of transactional data at its disposal to get the right information.
SCB now knows which member is more likely to avail a service or product. This also enables micro-segmentation. The company evaluated a number of solutions and SAS was chosen as the preferred solution partner and SCB today relies on SAS solutions across Asia for its customer analytics.The bank created a team of 25 people in Bangalore and called it a Business Intelligence Unit. and a test and learn culture they know the likelihood of customers to take a new product. The customizable CRM solution provided SCB with: 119 . Using analytics. This has resulted in more focused marketing campaigns and reduced costs with improved customer satisfaction. It means that fundamental decisions on strategy and resource allocation must be based on a detailed and accurate understanding of customers and the overall market. Standard Chartered Bank uses SAS Customizable CRM Solution to adopt a truly customer-centric approach to manage its business. This unit was responsible for deriving and implementing strategies to analyze and exploit customer data. It was easier for them to run targeted campaigns and elicit substantially higher returns since they perform profit modeling for each account.
The objective was to enhance the organization's competitive advantage and boost profits. and focus the marketing efforts on a more receptive audience. • Combine business rules and analytic models to accurately segment and profile customers. • Anticipate customer expectations and predict customer behavior like.• Integrate information from multiple sources. • Deliver customer intelligence into front office systems to enable Combine behavioral insights derived from analytics with attitudinal smarter customer interactions through various channels. • for purchasing particular combinations of products and services. Hence the bank's vision was to champion fact-based strategic business decisions using best-in-class analytics. • data obtained from online and offline customer surveys. 120 . and credit risk. and construct a personalized strategy for each group. tailor data for efficient access and analysis. lifetime profitability. It can help identify the best candidates propensity to purchase. Allow to cross-sell and up-sell. and reduce the complexity of data management. The bank was looking forward to the following broad benefits: • The ability to exploit changing and widening markets. eliminate data errors and redundancies.
• and shareholder value by effectively managing consumer relationships. lending. • risk management. custody. • • THE NEED The bank needed to manage and analyze the huge volumes of data captured by its OLTP systems. cost control. and To look for new ways to minimize costs. at the right time. and debt capital markets. in order to carry out a number of critical business activities and provide excellent customer service. It had to get the right information. foreign exchange. to the right people.• The ability to implement a customer-centric approach focused on The ability to concentrate on financial budgeting. Its products and services include cash management. while increasing profitability optimizing the lifetime value of the customer.3 million credit card customers nationwide.2 million retail customers and over 1. • 121 . interest rate management. IN A NUTSHELL • THE COMPANY Standard Chartered Bank has over 2.
com www.com www.com www.com MAGAZINES The Week Business Today 122 .crmadvocate.crmguru.com www. BIBILOGRAPHY WEBSITE www. and figure out new ways to minimize costs. cost control.crmtoday. while increasing profitability and shareholder value. concentrate on financial budgeting. • • THE BENEFITS The bank can now exploit changing and widening markets.google. and risk management. implement a customer-centric approach.crmnext.• THE SOLUTION SCB decided to go for SAS Customizable CRM Solutions to address its business needs.
Mint BOOKS CRM IN BANKING – By V V GOPAL UNDERSTANDING CRM – By R S PRASAD NEWSPAPERS Economic Times DNA Money 123 .
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