Customer Relationship Management

Peter drucker said `The purpose of the business is to create customer’.Implied in his words and work is the importance of keeping those same customer and of growing the dept of their relationship with you.Customer relationship is a comperhensive appraoch for creating,maintaining and expanding customer realtionship.Customer relationship management is a broad approach for creating, maintaining and expanding customer relationships. CRM is the business strategy that aims to understand, anticipate, manage and personalize the needs of an organization’s current and potential customers.CRM entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to:     Retain customers through better customer experience. Attract new customer. Decrease customer management costs. Understand the customer.

CRM solutions provide you with the customer business data to help you provide services or products that your customers want, provide better customer service, cross-sell and up sell more effectively, close deals, retain current customers and understand who the customer is. Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:
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Increased sales through better timing by anticipating needs based on historic trends Identifying needs more effectively by understanding specific customer requirements Cross-selling of other products by highlighting and suggesting alternatives or enhancements Identifying which of your customers are profitable and which are not Technology and the Web has changed the way companies approach CRM strategies because advances in technology have also changed consumer buying behavior and offers new ways for companies to communicate with customers and collect data about them. With each new advance in technology -- especially the

quality of product etc.It can be there will be complain about some defective product so in this step company should make a department who handles the complains and support the customer. retain existing ones and maximize their lifetime value. This structure includes 4 stages     Marketing Sales Feedback Support If we have product A which is newly introduced in market so the 1st step will be making the product popular among the public.proliferation of self-service channels like the Web and Smartphone’s -. many businesses such as banks. So for that purpose we need to do marketing of that product.people will tend to buy the product so it is necessary to take feedback about taste. Today. After doing marketing it will be obvious that product sales will take place.customer relationships is being managed electronically. . From this structure of crm we can say it is necessary of every organization to conduct crm process. and other service providers realize the importance of Customer Relationship Management (CRM) and its potential to help them acquire new customers. insurance companies.

Customize by customer segment. Channels to meet customer’s needs. Differentiate 8. 5. . Understand customer’s needs 2. Interact with customers and prospective customers. 4. 7. Acquire customers and prospective customers. Based on customer needs. Business Cycle Of CRM 3.CRM BUSINESS CYCLE 1. 6. Develop product services. Retain valuable customers. Deliver increased value to the customers. characteristics and behavior.

and what they want to buy. Customers need to see that we are differentiating our service and communications based both on what we've learned independently and on what they've told us. as well as lifetime value or long-term potential. To create and foster a relationship. how and when they like to interact. . however.  Customer valuation to understand profitability. Analysis and research alone.demographics. Value may also be based on the customer's ability or inclination to refer other profitable customers.  While the promise of "one-to-one" marketing sounds good. differentiation should be based on the value customers are expected to deliver. are insufficient. we have not seen many organizations that have mastered the art of treating each customer uniquely. At the same time. purchase patterns and channel preference. Identification of actionable segments is a practical place to start. True understanding is based on a combination of detailed analysis and interaction. Understand and Differentiate: We cannot have a relationship with customers unless we understand them what they value. what types of service are important to them. we have to act on what we learn about customers.  Segmentation to identify logical unique groups of customers that tend to look alike and behave in a similar fashion.  Primary research to capture needs and attitudes. Several activities are important:  Profiling to understand.

To foster relationships. In a customer-focused world. organizations need to insure that:  All areas of the organization have easy access to relevant. based on customer needs and service expectations. The extent of customization should be based on the potential value delivered by the customer segment. customer service and online. . companies developed products and services and expected customers to buy them. channels and media can be customized based on the needs of quantitative customer segments. actionable customer information. It is important to remember that interaction doesn't just occur through marketing and sales channels and media.  All areas are trained how to use customer information to tailor interactions based on both customer needs and potential customer value. Most organizations today are not able to cost-effectively customize products for individual customers. services. However.  Interact and Deliver: Interaction is also a critical component of a successful CRM initiative. product and channel development have to follow the customer's lead. and even new channels. products. customers interact in many different ways with many different areas of the organization including distribution and shipping. Organizations are increasingly developing products and services. Develop and Customize: In the product-oriented world of yesterday.

Successful customer retention basically involves getting it "right" on an ongoing basis. because we continue to learn about what is valuable to each segment. ease of use. value is not just based on the price of the product or the discounts offered. right product. speed. responsiveness and service excellence  Acquire and Retain:  The more we learn about customers. we'll be much more likely to score a "win" with the right channel. right offer. customer perceptions of value are based on a number of factors including the quality of products and services. Those are the customers and customer segments that we want to clone in our prospecting and acquisition efforts. . In fact. organizations will be prepared to steadily increase the value they deliver to customers.  Continue to deliver on the customer's definition of value. right timing and most relevant message. the easier it is to pinpoint those that are producing the greatest value for the organization. be alert for the changes and be prepared to modify the service and value proposition as they change. Delivering value is a cornerstone of the relationship. And. And remember.  Remember that customers change as they move through differing life stages. right media. convenience.With access to information and appropriate training. It is based very simply on the organization's ability to constantly deliver on three principles:  Maintain interaction. never stop listening.

you gain insight and understanding that enhances your subsequent efforts. As you move from one stage to the next.And so the cycle continues. Your development initiatives simultaneously become increasingly sophisticated as does your implementation of CRM processes. .

unlike the yester when it was transaction-centric. To retain High Net Worth individuals.Nowadays. Gone are the days when customers at a bank did not mind the long serpentine queues and waited patiently for their turn with a token in their hand. Competition and globalization of banking services are forcing banks to be productive and profitable. banks should focus strongly on relationship management with customers. The challenge is for the banks to work towards ensuring that customers prefer their products and services over that of competing brands. and other service providers realize the importance of Customer Relationship Management (CRM) and its potential to help them acquire new customers retain existing ones and maximize their lifetime value. In this context. are expecting more from banks in terms of customized offerings. and transparency in dealings. . faced with an increasing array of banking products and services. Customers. The entire service industry is now metamorphosed to become customer. attractive returns. Service providers have recognized that good CRM bonds customers with the organization for a longer term. ease of access. insurance companies. many businesses such as banks. banking is more customer-centric. Increasing competition. With customers’ expectations becoming even more competitive. online banking is assuming a great significance.specific. resulting in increased revenues. The goal of CRM is to manage all aspects of customer interactions in a manner that enables banks to maximize profitability from every customer. banks are coming up with a wide array of novel products and services every day. the management of customer relationship in financial services industry demands special focus. With the opening up of the economy. Banks are well aware that their success is predominantly dependent on the CRM strategies adopted by them. no one has the leisure to wait. In today’s Internet era. Banks are increasingly focusing on the premise that customers choose on the service provider who differentiates through quick and efficient service. a number of private sector banks have joined the fray and are offering an innovative of products and services. The key to develop and nurture a close relationship with customers is by appreciating their needs and preferences and catering to their requirements. Today. deregulation. In this context. and the internet have all contributed to the increase in customer power.

banks need to understand how CRM assists them n customer identification. which will facilitates in developing better products. Online banking. frontline executives in banks should thoroughly understand their organisational structure. bankers should identify domain enterprise. Banks can gain a competitive advantage from CRM by becoming low-cost players in the market. and the creation of a suggestion box to elicit the views and suggestion of their employees. and plugging the loopholes in the CRM strategy as per the recommendations of the audit report. As a part of the planning process. credibility in the market. and streamlining of business processes are some of the benefits retail banks obtain by taking to successful management of their customer relationships. and rating of services across the network of branches. On their part. maintenance of efficient service delivery standards and business process reengineering. Towards this end. Experts opine that inefficient and improper service is one major reason. infrastructure. The domains of software systems. achieving operational efficiency and maintaining customer loyalty. the success of a CRM plan is dependent on the choice of the software. such as. it is prudent to plan for CRM in retail banks. Another dimension of the relationship building exercise is to obtain an electronic feedback from customers to understand the level of acceptance of existing products. At the end of the day. are required to be adopted by the banks for reaping benefits. putting on pleasing attire. as well as the product environment. employees need to demonstrate certain service traits such as. The ability to predict the products that customers are likely to purchase over a period of time. percolating and permeating to all levels of the CRM is a necessity in the present business scenario. In this context. multiply product database and tracking require specific CRM focus. Having understood the significance. Banks can enhance customer service by leveraging on technology. Initiatives. It is observed that banks lose their best clients to competitors due to a variety of reasons. increased productivity of managerial executives. introducing CRM audit by independent teams to identify the existing lacunae. bankers are bound to attract customers by providing a spectrum of services. cost implementation and relationship with the vendor as factors on which vendor selection is based. Besides understanding the requirements for CRM implementations such as. . bankers should display a flair for cultivating a good relationship with customers through the mechanism of better customer service. To a large extent. the management initiatives for CRM assume importance. analyzing the attrition of the clients in a particular product. The rationale behind losing their best clients to other service providers such as non-brokerage houses and mutual fund houses needs to be analysed by banks. acquisition and retention.To meet the challenging preferences of the customers and to stay ahead of competitors. the setting up of a CRM cell and conducting surveys at a periodic intervals to track their effectiveness. ATM banking and telebanking are just a few of them. A top-down CRM focused approach that starts with the top management. The remedies suggested by them are that banks should adopt customer relationship building approaches such as responding to complaints instantaneously. sales and customer service staff.

the Indian retail banks too need to focus on and continuously invest in the customer relationship activities. CRM enables organisations to motivate customers to initiate revenuegenerating contacts. application and challenges draw attention of the banking industry. . Having witnessed the manner in which several global banks have benefited through CRM. The Indian banking scenario.Implementing the right CRM tools can enhance customer satisfaction leading to business growth. needs to strive towards CRM implementation to meet the emerging demands of “universal banking”. which is still at an embryonic stage as far as the CRM domain is considered. Several CRM issues such as. its effectiveness.


timely announcement of new services. ensure that the customer such as how to fund the customer. creating awareness regarding online and e-banking. monthly statements. This paper deals with the role of CRM in banking sector and the need for it is to increase customer value by using some analytical methods in CRM applications. There is a shift from bank centric activities to customer centric activities are opted. maturity of time deposit. Establishing customer care support during on and off official hours. but banking is the process associated with the activities of banks. and devotes time and attention to expanding account relationships with those customers through individualized marketing. adopting mobile request etc are required to keep regular relationship with customers. It is a sound business strategy to identify the bank’s most profitable customers and prospects. the profitability is also increase. pricing. Hence the bank has to implement lot of innovative CRM to capture and retain the customers. CRM in banking sector is still in evolutionary stage. The present day CRM includes developing customer base. Hence asking reference from the existing customers can develop their client base. which needs to create the trust among the people. discretionary decision making. Banks are aiming to increase customer profitability with any customer retention. because banking industry purely related to financial services. If the base increased. keep in tough with the customer. making timely information about interest payments. The bank has to pay adequate attention to increase customer base by all means. issuing credit and debit cum ATM card. This has resulted in the adoption of various CRM initiatives by these banks. the existing clients can recommend others to have banking connection with the bank he is operating.Present and Future of CRM in banking Bank merely an organization it accepts deposits and lends money to the needy persons. It includes issuance of cheque and cards. In banking sector. helping the customers to avail online and mobile banking etc. The private sector banks in India deployed much innovative strategies to attract new customers and to retain existing customers. it is the time for taking ideas from customers to enrich its service. ensure that the customer gets what he wishes from service provider and understand when they are not satisfied and might leave the service provider and act accordingly. The use of CRM in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by the bank in today’s competitive milieu. it is possible if the performance is at satisfactory level. . get to know the customer. CRM in banking industry entirely different from other sectors. Huge growth of customer relationship management is predicted in the banking sectorover the next few years. relationship management could be defined as having and acting upon deeper knowledge about the customer.


Apart from traditional business. banks now a days provide a wide range of services to satisfy the financial and non financial needs of all types of customers from the smallest account holder to the largest company and in some cases of non customers. scope of the business of banking. Article Source: http://EzineArticles. The biggest change of all is in the. Banking in its traditional from is concerned with the acceptance of deposits from the customers. the lending of surplus of deposited money to suitable customers who wish to borrow and transmission of funds.Impact Of Technology In Banking In the world of banking and finance nothing stands . The range of services offered differs from bank to bank depending mainly on the type and size of the bank.

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