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The idea behind Customer Relationship Management is not new. CRM is simply a tool & technology used to achieve incremental operational improvement. CRM is a set of strategies, processes, metrics, organizational culture and technology solutions that enhance an organization's ability to see the differences in its customers’ and prospects' behavior and needs, track new opportunities to better serve their customers and act, instantly and profitably, on those differences and opportunities. A vast way of approach to customers, 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, implicative and inspiring suggestion so that the company may attract new customers and bind existing customers steady with the company.
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. It costs a company dramatically less to retain and grow an existing client, than it does to court new ones. It is said that “It is seven times more expensive to acquire a new customer than to keep an existing one”, therefore the value of customer information and management should never be underestimated.
A customer relation management analyst says CRM is "a buzzword that's really not so new. The aim of CRM is optimize the use of technology and human resources for the business to gain insight into the behavior of costumer. Customer Relationship Management refers to the process - usually depending on sophisticated computer systems - to record and analyze the buying habits of customers, so that a company can offer them goods or services in which they are likely to be interested. In additional to all the usual customer care principles, 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". Today it’s widely acknowledged how you treat your customer goes long way in determining your future profitability, and companies are making bigger and bigger to do just that. Customers are serious about the service they should beget and are voting with their wallets based on the experience they receive.
Market analysts squabble over the exact figures, 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. Specially in banking CRM it is very important because bankers have to daily interact with their customers and provide value added services to them.
By investing in CRM or e-CRM applications, companies are looking at retaining existing customers and converting potential customers into lifetime customers. In many industries, customer retention is a key driver for profitability.
This project answers to all the queries regarding what customer relationship management is. In this project stress is not on the technology, which is a part of CRM but stress is on the customer preference on the needs, so that companies can please most of the customers all the time. Relative graphs and diagrams are also included in this project. The role of the customer in any business activity is very important and this can be clearly revealed from this project.
So why, is the market of CRM technology exploding, is the most common question at CRMguru.com “What Is CRM?” because if you ask three CRM experts, you’ll get five different answers.
CONTENTS PAGE NO.NO. 4 .SR.
2. E-CRM THE PAST. 5. 85-89 90-94 95-99 100-101 5 . INTRODUCTION BIRTH OF CRM NATURE. SCOPE. PRESENT AND THE FUTURE CRM IN INDIA CONCULSION SURVEY AND MANTRA OF CRM 63-73 74-84 57-62 11. CRM IN RETAIL BANKING 9. 6. 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. RETAIL BANKS PLANNING FOR CRM 8. 13. 3. 4. 10.1. 12.
INTRODUCTION ‘CUSTOMER IS THE KING’ -Toady’s seller. 6 .
all aspects of the business must be reshaped to be customer driven. Rather. a holistic change in an organization’s philosophy which places emphasis on the customer. front of house customer service. Customer Relationship Management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers. processes and procedures. However. systems and information management. Changes must occur at all levels including policies and processes. marketing. CRM is a term that is often referred to in marketing. This is because CRM can be considered from a number perspective. the three perspectives are: 7 . Although there are several commercial CRM software packages on the market which support CRM strategy. A successful CRM strategy cannot be implemented by simply installing and integrating a software package and will not happen over night. there is no complete agreement upon a single definition.What is CRM? Customer Relationship Management (CRM) includes the methodologies. employee training. In summary. The general purpose of CRM is to enable organizations to better manage their customers through the introduction of reliable systems. it is not a technology itself. technology and capabilities that help an enterprise manage customer relationships.
CLC is a summary of the key stages in a customer’s relationship with an organization. customer retention and customer extension. value creation and innovative IT. and has the payoffs associated with modern technology. However. such as speed. CRM from the Customer Life Cycle (CLC) Perspective The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). or an It-based customer management system to support sales people. It is marketing orientated rather than product orientated. CRM from the Business Strategy Perspective The Business Strategy perspective has most in common with many lessons and topics contained on this website. CRM is far more than a new software package. 8 . The diagram below shows the Marketing Teacher Model of CRM and Business Strategy. However. looks at the products of the services that customer needs throughout their lives. and indeed within the field of marketing itself. power and money. and so on. IT is vital since it underpins CRM. CLC focuses upon the creation of and delivery of lifetime value to the customer i. For many. ease of use.e. companies often buy into software that will help to achieve their business goals. Essentially.CRM from the information Technology Perspective From the technology perspective. and three contextual factors – marketing orientation. Our model contains three key phases – customer acquisition. the renaming of traditional customer services.
The business strategy is based upon the recruitment. customer relationship management (CRM) is finding. Customer Management Relationship (CRM) is: • The art/science of using information to find. maintenance and optimization of long term mutually valuable relationships between consumers and organizations. retention and extension or products. development. 9 . Simply stated. The relationship delivers value to customers. sales. processes. is as follows: Customer Relationship Management is the establishment. So CRM is the building and maintenance of long term customer relationships. acquire and retain customers. The relationship is supported (but not driven) by cutting edge IT. services. Simply stated. getting and retaining customers. and service. (2002). • The people. and profits to companies. solutions or experiences to customers. and technology questions associated with marketing.A commonly cited definition of CRM (UK) Ltd. Defining Customer Relationship Management (CRM) Here is the compilation of some of the most respected thoughts that can describe CRM. This is the core of CRM.
• At the core of ant customer-centric business strategy and culture. • Supported, not driven, by technology. CRM involves redesigning of functional activities.
• Actively deepening the knowledge you have of your customers to meet individual customer needs. • A holistic approach that unifies all points of customer interaction.
Measured by customer retention and referrals as well as the growth of valuable customer segments.
A Good CRM Program Needs To:
●Identify customer success factors. ●Create a customer-based culture. ●Adopt customer-based measures.
●Develop an end-to-end process to serve customers. ●Recommend what questions to ask to help a customer solve a problem. ●Recommend what to tell a customer with a complaint about a purchase. ●Track all aspects of selling to customers and prospects as well as customer support.
Customer Relationship Management (CRM) is NOT:
Just about buying technology. However, some technology is required to enable a CREM strategy.
• Possible with remembering that the driving force is often human relationships. • Not a destination, but a journey. CRM is iterative in nature, to be improved on a regular basis. “The true value of CRM is to transform strategy, operational processes and business functions in order to retain customers and increase customer loyalty and profitability.” by Aris Pantazopoulos.
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. • Collaborative CRM: direct communication with the customers that doesn’t include a company’s sales or service representative (“self service”).
• Analytical CRM: analysis of customer data for a broad range of purposes.
The three key phases are:
1. Customer Acquisition 2. Customer Retention 3. Customer Extension
Marketing Orientation 5. or the next level of product or service. This is most likely to be the purchase of a similar product or service. innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time.Through market orientation. 2. innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time. Customer Acquisition – This is the process of attracting our customer for their first purchase.The three contextual factors are: 4. Innovative IT 1.Our customer returns to us and buys for a second time. We have acquired our customer. Customer Retention . Growth . Value Creation 6. Growth – Through market orientation. We keep them as a customer. 13 .
innovative 11 and value creation we aim to increase the number of customer that purchase additional supplementary products and services. Of course once our loyal customers have purchases those. We introduce products and services to our loyal customers that may not wholly relate to their original purchase. Marketing Orientation – Means that the whole organization is focused upon the needs of the customers. our goal is to retain them as customers for the extended products or services. supplementary purchases. 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. 4.) 5. 14 . but also the core product and its benefit. ‘market’ orientation and ‘marketing’ orientation are not the same. and also the augmented product such as a warranty and customer service. Customer Extension – Our customers are regularly returning to purchase from us. Growth – Through market orientation. Marketing orientation will focus upon the needs of consumer for all three levels of a product. These are additional. tangible product.3. Customer needs are addressed by the Three Levels of a Product whereby the organizations not only not only supplies the actual. (N.
also bought another product). Organizations will track individuals. When Amazon tells you those customers that viewed/bought the same product as you. Innovative IT – It should be efficient. it is vital to its success. since every consumer displays different purchasing habits and preferences. CRM software collects data on consumers and their transactions.g. and try to market products and services to them based upon similar buyer behavior seen in other individuals (e. BIRTH OF CRM 15 .6. Whilst IT and/or software aren’t the entire story for CRM. speedy and focus upon the needs of customers. In some ways.
-MR. MAHESH DADLANI CUSTOMER RELATIONS. Middle management focused on automating departmental functions such as sales and help desk support. They believed that automation and better management of their sales and customer service process would lead to increased revenue and customer satisfaction.“CUSTOMER FOR LIFE THROUGH SYSTEMS AND SMILES”. BIRTH OF CRM Throughout the 90s business were focused on improving internal operations. ORANGE. CEO’s tried to distinguish their companies through operational excellence and product innovation. Vendors were all too happy to support this 16 .
belief and raced to the scene with independent solutions for sales force automation, help desk and customer service functions.
While many of these applications provided increase in the productivity, the approach of using independent solutions to address departmental needs served only to create islands of information and database duplication. Furthermore, the lack of system integration was unavailable to sales and support personnel without jumping from system to system. This did little to support cross selling opportunities or increase customer satisfaction.
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. With easy access to mountains of information, today’s customers do their homework, and they now have the upper hand in most purchase transactions. In response, sellers are bending over backwards to improve offerings and services.
However, rather than adopt a streamlined “YOU WANT IT WE’VE GOT IT” approach sellers have created a marketplace where products and services are sold, serviced and marketed in an increasingly fragmented and ultimately frustrating way.
Never before has so much “clutter” bombarded consumers from so many online and offline sources. Trying to be all things to all buyers, 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, BUT YOU CAN’T PLEASE ALL OF THE PEOPLE ALL OF THE TIME.
It wasn’t supposed to be this way. Customer Relationship management (CRM), which swept through the business landscape in the early 1990s, brought the promise of helping sellers PLEASE MOST OF THE PEOPLE MOST OF THE TIME. Riding the coattails of customer satisfaction, would come increased organizational efficiency and, better still, increased revenues.
That dream has been slow in coming. While incremental improvements have occurred, CRM has not yet delivered its ultimate promise – the transformed customer experience.
Yes, companies have implemented call centers and sales force automation software and customer sales representative training. However, while improving the sales and service components of customer transactions, companies have largely ignored the very piece required to
attract customers in the first place. It’s the piece that ensures sales and service efforts are effective and integrated. It’s the piece that allows the
seller to segment and analyze their customer information in order to create a more personalized, long-term relationship. It’s the piece called “marketing”.
We’re not saying that the last decade’s investment in CRM has been wasted. 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. This was the right direction to take. However, companies haven’t reached the end of the CRM road. Today, 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.
CRM TODAY – FRAGMENTED CUSTOMER EXPIRENCE SERVICE SALES CRM TOMMOROW – TRANSFORMED CUSTOMER EXPERIENCE 20 .
MARKETING SALES SERVICE EVOLUTION OF CRM As CRM evolved. be careful what you wish for. After all. many companies assumed that just bolting on new technology or adding new services would enhance customer relationship. Many companies faced the unsettling paradox of having advanced data availability and analytic techniques that quickly 21 . This assumption was pernicious as it was false. And as for gathering customer insights. no matter how efficient and service oriented your sales channel. you can’t sell what people don’t want to buy.
a profitable relationship. 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. information will be exchanged and acted on in real time. 22 . not every conversation will be profitable. Naturally. creating a memorable and differentiated customer experience. In this next evolutionary phase of CRM. in the long run. The evolution process of CRM has worked as follows 1. The value generation for the vendor was the sole criteria for the success of the business. 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. Transaction based marketing: The volume based marketing which was a single function approach was the first stage.outpaced their ability to absorb and apply the information. But the series of conversations and the ongoing knowledge transfer will continue to grow.
The creation of long term relationship with customers by offering value added services and creating long term value for mutual benefit was the key.2. This naturally led to acquisition as the only strategy for the business to grow and expansion of customer base 3. technological innovations made it necessary for the vendors to adopt strategies for customer retention. closing gap in quality and performance. Customer Acquisition: was the key for this. commerce. 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. 23 . 4. Customer retention: The factors like fierce competition in growing number of vendors.
ICICI NATURE AND SCOPE OF CRM The Customer is King! This credo is more powerful. relevant and true today than ever before. success 24 . In a truly customer driven economy. Bhaskar Bhaggi Sr.NATURE AND SCOPE OF CRM “CRM IS ALL ABOUT GETTING CLOSER TO YOUR CUSTOMER” -MR. Vice President.
The ultimate goal is to meet and exceed customer expectations. CRM should finally enable “A TARGETED MUTUALLY WITH BENEFICIAL PROFITABLE RELATIONSHIP INDIVIDUALS AND GROUPS”. CRM is all about building long term business relationships with your customers. Industry analysts recently reported that CRM expenditures will grow from $2. and retaining customers. 25 . Simply stated. Customer Relationship Management is one of the hottest and most talked about topics in the industry today and for good reason. CRM solutions empower business to more efficiently and effectively manage the activities that affect their relationship with their customers. It is best described as the blending of internal business process: SALES. getting. create a positive customer experience and build customer loyalty.8 billion in1999 to $11 billion by 2003.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. Customer Relationship Management (CRM) is about finding. MARKETING AND CUSTOMER SUPPORT WITH TECHNOLOGY.
` DIFFERENTIATING CUSTOMERS Most CRM systems allow for very little freedom to customize to specific industry verticals. • Differentiate Offerings – Customers appreciate customized offerings. Understanding each customer becomes particularly important. Since the customers needs emerge from the products and offerings of the industry. CRM system should respond to the customer needs. • Maximize Lifetime Value – Exploit up-selling and cross-selling potential. • Keep existing customers – Its 5 to 10 percent cheaper to retain current customers than acquire new ones. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. • Increase Loyalty – Loyal customers are more profitable. recognize and reward best customers disproportionately.Key CRM Principles: A good CRM solution should allow for: • Differentiate Customers – All customers are not equal. 26 . 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.
What CRM needs to understand while differentiating customers is • • • • Sensitivities. Preferences and Personalities. Culture. As the satisfaction level for each customer improves so shall the customer retention with the organization. 27 . Physical and physiological characteristics. background and education. • • 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. DIFFERENTIATING OFFERINGS CRM solution needs to differentiate between a low value customer and a high value customer • • Low value customer requiring high value customer offerings. Lifestyle and age. Tastes. Low value customer with potential to become high value in near future.
marketers can maximize share of the purchase potential. Referral sales invariably are low cost high margin sales. It has also the implication of being not “on time scale”. Customers have to invest in terms of its product and service offerings to its customers. Suspect----prospect-----customer client-----supporter-----advocate. referral sales are likely to induce more satisfaction. INCREASE LOYALTY It is an endeavor of ant corporate to see that its customers are advocate for the company and its products. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances. It has to innovate and meet the very needs of its customers so that remain as advocates on the loyalty curve. Any company will like its mindshare status from being a suspect to being an advocate. Besides. 28 .MAXIMIZING LIFE TIME VALUE By identifying life stage and life trigger points by customer.
Creating value for customers and prospects. Learning from customer and prospects. 5. Creating loyalty. BENEFITS OF CRM 1. 4. Creating profits. 3. Acquiring new customers.SUMMARIZING CRM ACTIVITIES The CRM cycle can be briefly described as follows: 1. Profitability-Driven Account Planning .Enables commercial banks to better understand the overall needs of their customers and drive 29 . 2.
End-to-End Credit Management .Allows commercial banks to increase customer satisfaction and retention.customer profitability.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.Enables the efficient and consistent processing of commercial loans. 30 . 2. Banker Productivity . efficient. 4. Efficient product installation improves banker productivity by automating time-consuming manual tasks. 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. fee based products to the appropriate customers. Components such as value-added personalized service and proactive outbound service enable organizations to provide fast.Includes streamlined proposal and credit document generation. 5. Key components include consistent credit request processing and streamlined account origination which helps increase the quality of credit portfolios. Customer-centric Service . Compliance with regulatory procedures (such as Regulation B loan notification requirements) is built into the workflow of the solution set. and superior service to their customers. Relationship-Driven Sales . 3.
CRM CUSTOMER SERVICE STRATEGY . No duplicate data. no double entry. CRM DOCUMENT MANAGEMENT STRATEGY . Detailed customer reports can be accessed with customer service histories. Superior encryption techniques with safe data transfer and sharing tools. All sales persons will have access to key customer. product and company data and all sales managers can effectively monitor and co-ordinate their team.CRM STRATEGY - The basic CRM strategy is to align an entire organization to service the customer better. CRM SALES MANAGEMENT STRATEGY . A wide range of CRM marketing tools are available for this purpose. retain existing customers and to make them referrers.Banks know that the best ever marketing strategy is to combine all enterprise resources to find new customers. no data loss.Banks hosts all enterprise data in a web-based centralized always updated CRM database accessible from every where at every time.CRM tools are capable of delivering all customer information to everybody in need. 31 . CRM MARKETING STRATEGY .CRM offers plenty of tools for automating and managing sales processes. customer preferences and priorities. Real-time data backup strategy.
a satisfied customer can bring many other customers to you. leads sales management and after-sales management management. processes. customer preferences. sales territories. • Sorting the key information to find right opportunities. and web-based CRM allow users to develop right CRM strategies according to their industry. and CRM is the process of doing it in a planned way. etc. CRM PROCESS MANAGEMENT INVOLVE THE FOLLOWING STEPS • Getting all key information needed for CRM process.CRM strategy also covers many other business processes. implementing and analyzing CRM processes in the right way. The simplicity in use. • Planning marketing management. • Delivering appropriate information to users who need. As you know. contact management. open-source features. (CRM) process management tools are specially designed for streamlining small and medium business CRM practices. CRM PROCESS Understanding customers’ tastes and requirements with precision and effectiveness and serve them in the way they want. 32 . CRM process management tools follow a set of simple customizable rules that helps in planning.
• Providing real-time reports and analysis about on-going processes BANKING ON CUSTOMER FOCUS 33 .• Pleasing customers with respect to set rules and plans. • Regularly keeping the contact with the customers.
many banks have been so absorbed in their own internal issues. these were the characteristics of Indian banks. To improve customer satisfaction US bank marketers are experimenting with new techniques to capture valuable feedback. Intensification of competition after liberalization has compelled the banks to get their acts together and focus more on the customer. The industry propensity to raise fees to boost non-interest income hasn’t helped either. 34 . particularly merger – driven cost – cutting re-engineering. that customer service often received short shift. For the last decade at least. Indian banks can take a cue from this and redefine their strategies. interminable waiting hours. Consumer surveys continually highlight customer service as a weak spot for financial institutions.BANKING ON CUSTOMER FOCUS Long serpentine queues. unfriendly staff – till recently.
traditional direct mail and telephone surveys are removed in time from the customers’ actual experiences at bank. an analyst. 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”.” says Kimberly Collins.THE RESULT: Banks needlessly lose some of their best customers to other providers. particularly non-brokerage and mutual fund companies. “Banks have realized they are not effective at gathering information about their customers and are trying to figure out how to change that. institutions hope to gain improved insight to devise strategies for returning their loyalty. A survey by New Ground Resources Inc. Through these methods. 35 . The quest for data has bankers turning to a wide variety of information gathering techniques. employee feedback groups. Such tactics are supplementary with traditional strategic research methods such as market survey and bench marking studies. banks need to improve their customer feedback mechanisms. To help stem those defections. Besides annoying customers. Dischanted customers are voting with their feet says Charlene Stern vice-president at the Chicago based strategic marketing firm. such as complaint data analysis: call center exit surveys. and online surveys.
Instead of calling customers at dinnertime. more immediate information.D. with specific customer groups. so that feedback can be obtained with a minimum of distraction. M. distribution at fleet Boston financial corp. however and some can actually backfire on the institution. And the telephone surveys themselves have been revamped to provide fresher. Hedges says. “Successful approaches vary with the objective of the research. Online surveys provide immediate feedback. Telephone surveys. for e. can be useful for sporting and tracking broad trends. wile customer focus groups then help the institution drill down and identify specific service problems. so 36 .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. No one techniques is 100% accurate. 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. but might annoy customers if they bear too much resemblance to the much despised Internet spam. “Customers don’t want to be bothered. The key in most cases is to weave queries into ordinary interactions between customers and the institution.” says Robert Hedges.g. That’s why experts advise a comprehensive and balanced approach.
we have with them. In the days when banks focused on their local markets and tellers knew many customers by name. banks had an easier time understanding their customers. 37 . when geographic restrictions were liberalized. EXIT SURVEYS Before the 1980s.” says Michelle convey. bank marketers needed only to conduct simple telephone or branch surveys to gauge customer sentiment. quality leader at JP Morgan chase & Co. in New York City.
Meanwhile. getting a more accurate data about the customers is becoming more important as evidence accumulates of growing disconnect between banks and their customers. up from 38% in 1997.D. such as direct mails and telephone surveys. The increasing use of electronic channels. M. This leaves the institution searching for alternating feedback mechanisms. The strongest demand was for more “humanized” personal service rather than more services or reduced teller lines. telephone call centers and PC banking. 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. don’t work so well anymore. Randall Grossman. of Bank 38 . Customers trash the survey letters without reading them and use voice-mail to screen out unwanted telephone surveys. 60% cited a need for improved service.The advent of regional and national banking has changed all that when institutions sprawl across multiple regions. what suits to a customer in one area may not appeal to those in another. 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. The local branch may not be the best place to sample opinion. automated teller machines. Cost is one consideration.
Traditional surveys reach customers some time after their service contact at the bank. Fleet Boston. Ohio. “If we change the way our reps answer the phone.One Corp’s retail unit in Columbus. The cost of hosting a traditional customer focus group can reach $5.g. Some of the newer techniques are designed to capture feedback when the customer’s response is fresher. Immediacy is also important. has been Fleet Boston’s Hedges says this kind of survey provides the company with “Immediate Feedback” on its products and services. for e.” Hedges say: This gave birth to Customer Relationship Management……. 39 . estimates a telephone survey of 500 people costs between $20 to $30 per person.000 per group. allowing Fleet Boston to adjust its procedures quickly. Customer responses are tabulated and scored and then sent to call center managers the very next day. not including overhead or the cost of designing the survey – compared to as little as $5 per e-mail. the survey will let us know whether that change was something positive or negative fro the customer.
BUT A MATTER OF SURVIVAL” -Mr. Kiran Pradhan Account Manager.USE OF TECHNOLOGY IN CRM “CRM IS NOT JUST A GOOD IDEA………. SAS TECHNOLOGY IN CRM 40 .
With technology touching the way we live our lives. • Speed response and understanding each individual one is the major key issues. Like the television and the PCs revolutionalized our lives in the twentieth century so is wireless communication. 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. CRM has become the central focus area which the entire gamut of organizational activities has to revolve around. internet and pervasive computing going to affect our daily pattern of lives. • With abundance of product and service offerings. to support sales and marketing strategies. 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. consumers’ loyalty can be commanded by providing better portfolio of the products. expectations of individuals is fast changing. 41 .
so as to achieve one-to-one relationships with all the profitable and valuable customers.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. leveraging on technology is a must. To implement the CRM in the modern day organizations with millions of customers. banks can adopt individual marketing approaches rather than relatively ineffective mass marketing. With a closer understanding of customers by small segments. ensuring that they don’t alienate low-value customers with high – value potential. The entire ranges of the technologies used in CRM are known as “Technology 42 . and which they are most likely to purchase. The Technological Ecosystem: Technology is the essential enabler of the CRM. 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. Personalized services: Business can segment the market into specific targets by demographics or purchase types.
marketing and customer service. Marketing automation includes activities like marketing campaign planning and execution. These activities include sales. Mobile sales and field service are known as Mobile Office Operations. account management. They are Operational CRM. 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.Ecosystem”. ERP and legacy systems are considered as back office where as sales force automation. ANALYTICAL CRM 43 . Analytical CRM and the Collaborative CRM. The sales force automation includes opportunity management. sales encyclopedia. front office business processes and the delivery channels and the back office activities. customer service and marketing are considered as the front office activities. sales forecasting. Operational CRM integrates the mobile office. and campaign analysis. field service and quality management. Supply chain management. and sales analysis activities. These comprises of three building blocks. Customer service activities include customer service. customer support.
The interaction points include call centers or customer interaction centers. They are used to identify different pattern behavior of customers. 44 . profiling and segmenting the customers using the analysis tools and data warehouses. sales calls. web.Analytical CRM is used for analyzing customer data to support operational CRM activities. publishing. which is essential to develop and optimize customer relationships. and catalog and product configurations. 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. and intelligent agents. e-mail. fax. field service. The collaborative technologies include call – centers. The interaction can take different forms and diverse media. Analytical CRM provides a 360-degree view of customer. Web interaction can include self-service. Collaborative CRM facilitates the customer interaction with organization and also interaction between sales and marketing people with the customer. COLLABORATIVE CRM Collaborative CRM includes all the components that manage and integrate activities across the entire customer contact points.
CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING “BANKS IN THE DAYS TO COME HAVE TO PROVIDE THEIR BROAD BASED SERVICE PACKAGE IN THE MIDST OF STIFF 45 . 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. 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.
ATMs. Banks earned customers’ loyalty on the basis of personal relationships. the bank manager knew you by name.” -UNKNOWN INTRODUCTION In simpler days. THEY HAVE TO SURPASS THEIR RIVALS IN THE AREA OF QUALITY OF THEIR CUSTOMER SERVICES. and on faceto-face interactions and long term knowledge of the customer as a person. 46 . You choose the local bank. TO ENSURE THEIR COMPETATIVE EDGE IN FUTURE. commoditization. replaced by national and multi-national service providers. not just an account number. All else being equal. and your family had conducted business for years. The model of the personalized bank is quaint memory. trading on history and mutual loyalty. where the teller was your neighbor’s sister-in-law. it was so easy to select your bank.COMPETITION. customers chose an institution because it was convenient and personal. Technology. deregulation and globalization forever changed the face of banking.
. in the mailbox. A typical financial institution has thousands of local. who have traded loyalty for the ability to pick and choose from the latest deals-of-the-day that. Automated call systems and a proliferation of product choices. they wage 47 . 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. Customers stick around until enticed by the latest short term interest rate or direct mail offer. They spend large advertising budgets on television and print ads to lure new customers. For consumers. this competitive scene has brought a wealth of choices. . national and global competitors. regional. most players hold a relatively small and unreliable market share. keep them and maximize profitability from each all while streamlining product costs and customer contact channels. yet it has eliminated the personalized nature of banking. appear. say consumers. Banks have been doing that all along. This new order calls for a new mindset.Internet Banking. No matter. none of them fettered by traditional ties of geography and familiarity. and harder than ever to show profit. pre-appeared. focusing on ways to gain customers. In this increasingly fragmented industry.
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’. In the current competitive scenario – for 48 . Banks need to reconsider their traditional focus on product lines. They constantly monitor and seek to increase sales in each product line. and can even be self defeating. not just a series of transactions. Today’s knowledge savvy consumer is challenging the Indian retail banking industry to redefine itself. Knowledge dissemination has been propelled by electronic and mass media campaigns. So what’s the problem? The problem is that these measures fall short of the potential to truly maximize value from the existing customers.ambitious campaigns to cross sell services to the existing customers. It’s time to adopt comprehensive view of the customer as a part of continuum.
is taking on a new urgency. 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. 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. Ensuring a good customer experience at every customer touch point is the corner stone of a successful growth strategy. there is hardly any option but to learn from and actively respond to customers’ needs. banks are finding it increasingly difficult to meet the high growth expectations. In the current falling interest scenario. for gaining a greater slice of market share. succeed and make profit.a bank to survive competition. 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. The battle of the banks. A good customer experience 49 .
Moreover. it is a drain on the existing resources of the bank. With the emphasis on ‘delivering results’ most bankers are resorting to customer grabbing. 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. Therefore. and managing to sustain and achieve growth and profits. which translates into increased profits.will drive customer acquisition and promote customer retention. Bankers are conscious of the relative costs of acquiring new customers. the challenge for the 50 . rather than customer cultivation and creation. which can be better deployed for growth initiatives. bankers are fully aware that replacing customers increase the relative cost of new customer acquisition. The management of customer relationship in the financial service industry demands special focus. with the result that customer churn is the order of the day. The entire service industry is now metamorphosed to become customer specific. This in other words is the hallmark of a successful CRM strategy. Incidentally.
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. CRM links business process across the supply chain from back – office functions through all touch points. model “what-if” scenarios. From an analytical standpoint. From a strategic standpoint. assess and maximizes lifetime value of each customer. CRM mobilizes resources around customer’s relationships rather than product groups and fosters activities that maximize the value of lifetime relationships. predict customer behaviors. CRM is a host of analytical data tools that enable banks to fully understand customer segments.banks is to retain and deepen the profitability of the existing customer relationships. enabling continuity and consistency across a customer relationship. and design and track effective marketing campaigns. From an operational standpoint. 51 .
52 . comprehensive view of every one of its customers.8 billion on CRM in 2001. With this base. This should allow the banks to generate a single. the banks must identify prime customers who require to be specially treated under CRM. • Enabling the bank to fulfill customer needs at the right time with the right offer. • Identifying high risk customers and adjusting service accordingly. retail financial services institutions are expected to spend some $6. 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. • Maximizing lifetime value of each customer through cross-selling. • Fostering greater long term loyalty through relationship building.According to Meridian Research. • Enabling immediate action to retain the most valuable customers. related products and their holding pattern with the bank. • Increasing the rate of return on marketing initiatives. Those investments will pay off for banks by • Restoring the personal service connotation that previously removed.
a savings bank customer may be offered a credit card or a housing loan. Banks should employ a CRM solution that consolidates information from all customer interactions. but also enable banks to offer their customer the additional services they might really want. CUSTOMER RETENTION: Customer Retention is the most important focus of CRM. on a continuous basis. 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 busy business may be offered internet banking etc. Every banking representative should have ability to 53 . All operations can be optimized and systemized to enhance efficiency and effectiveness. CUSTOMER ACQUISITION: CRM is aimed at optimizing processes and functions related to the customer. a minor customer may be offered an educational loan. which not only would build customer loyalty and business. CRM solution should adopt an integrated approach to customer needs. This continuous learning process would help banks to bring out better products that target potential as well as existing customers. The operations can be aimed at getting the right customers and then retaining them by extending special treatment under CRM environment.CROSS-SELLING/UP-SELLING: Cross-selling and Up-selling are huge untapped opportunities for banks. For example.
using technology as a tool. Else. the prime ones. A dissatisfied Customer tells at least 10 other people about what went wrong with the bank. it will definitely stem the flow of new customers into the bank. To achieve this. beyond the level of satisfaction.access 360-degree view of any customer. which can trigger an exodus of customers from the bank. the banker should make all efforts to improve services on a continuous basis. 54 . if he receives a level of service lower than his expectations. banks must continuously innovate new producers and features. to enhance the competitive advantage and customer retention. CUSTOMER SATISFACTION AND DELIGHT: When a customer receives a higher level of service that what he expects. at least. he is dissatisfied. in time. On the contrary. Hence. Banks operate in a very dynamic market and it is important to be proactive to delight a customer. he is satisfied.
electronic and wireless. 55 . 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.
It is aimed at utilizing the customer’s potential to the maximum. it is an indication that the customer is having a loan with that bank.For e. 56 . if an important customer dials to the bank’s call center. Analytical CRM can trace this and the banker can offer him a loan with better benefits and in the process benefit himself.g.g. It helps in tracking the activities of the customer on a real time basis. if there is a monthly debit of certain amount in the customer’s account by means of cheques in favor of some other bank. the operational CRM can alert the call center of the customer’s account status and other details. For e. ANALYTICAL CRM Helps banks make sense of the information collected.
Understand the bank’s products. Preparing for CRM involves three important steps 1. 57 . it is necessary for the banks to lay a solid foundation on which the edifice of CRM can be built.RETAIL BANKS PLANNING FOR CRM “The prerequisite for successful CRM in banks is to have a thorough understanding of the organizational structure and environment.” RETAIL BANKS PLANNING FOR CRM In order to derive maximum advantage. Understand the organization environment. 3. Analyze the product environment. 2.
customer call centers. Customer interface executives who do their homework on the above issues are likely to make commitments to the customers which cannot be delivered. The reason can broadly be attributed to • Lack of understanding of the line and staff functions and the overall structure and organization. While both components are complementary in nature. web portals and written queries. Understand the organization environment There are essentially two components to the services provided by banks: CUSTOMER INTERFACE and TRANSACTION EXECUTION. 58 . This holds good for both internal as well as external customers. Transaction execution is the forte of the operations staff and IT. the skill-set required for the components are unique.1. Inputs received from customer interface staff are executed and delivered by the transaction processing personnel. 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. This is common in the case of loan products. • Inadequate knowledge about the sphere of operations at different levels. Components of customer interface are field sales staff.
Executives must master the art of ‘baby – sitting’.• Failure to judge the idiosyncrasies of superior peers and subordinates. 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. the rest of the pack woefully lacking in product knowledge. Chances are that the executive would answer one query and refer you another table for the second. 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. 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. 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. 2. Adequate knowledge about all the 59 . Walk into any private bank or public sector and enquire about demat account operation or the procedure for obtaining cash credit limits.
A ‘professional’ should be equipped with the following adequate information: -Competitors by rank: • Close competitors for the products handled. 60 . -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. 3. Analyze the product environment Enhanced service competency and product knowledge are the building blocks in a relationship – building exercise. • Their strength and weakness with respect to each product for which they compete with you.products of the bank would ensure that the CRM efforts are finally entrenched.
The other advantage is that this strategy results in a greater return on marketing investment coupled with reduced marketing costs. “The more you give the more one wants” seems to be the adage. Experience has shown that each interaction at an event may not result in a sale. Campaign management in retail banks is growing by leaps and bounds from single channel mass campaigns to multi-channel targeted campaigns. 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. Consider the introduction of ATM facility that was meant to reduce transaction pressure on daily basis. Proliferation of services due to intense competition has turned the banking into a buyers’ paradise. 61 . lesser cost of communication reaching out to a larger targeted audience and a higher response rate. complete with client history to enable devising an appropriate action plan.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’. Technologies has evolved to such an extent that management can keep a tab on real-time status of a campaign. Again. nevertheless the aim to make every interaction a potentially profitable opportunity to offer additional value to the customer.
bank breaches appear to be mushrooming all over the cities. Recruitment and deployment of personnel without adequate inputs relating to issues explained above have a detrimental effect on CRM. is the need of the hour. Success of such a strategy will be possible only when an exclusive CRM team ensures dissemination of the CRM philosophy. More branches entail deployment of more staff. 62 . A CRM focused approach that starts with the top management.In their anxiety to reach out to more customers and grab a bigger piece of cake. conducts a regular CRM audit and offers suggestions and ideas while filing the ‘CRM performance report’ with the top management. percolates and permeates all levels of organizations.
CRM IN RETAIL BANKING. BY THE PEOPLE. FOR THE PEOPLE” 63 . CRM IN PUBLIC SECTOR “OF THE PEOPLE.
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. 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. The surprising aspect that came out from the study was that though banks were aware of the benefits of CRM. 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. It is found in a research that the cost of acquiring a new customer is over 5 times the cost 64 . 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.CRM IN RETAIL BANKING CRM has been in India for over seven years now.
• Streamlining of the business process across different functions aligned to the best practices. • Providing an integrated view of customers across companies and channels. • Increased productivity of managerial executives. 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. Cross selling to existing customers produces incremental underwriting accuracy. 65 . • Reduced training costs. Research shows the more products a customer buys from a firm.of retaining an existing customers. • Giving customers the ability to transact through multiple channels. the less likely that person is to leave it. Apart from enhancing customer satisfaction. sales and customer service staff. this makes cross selling and up selling easier. one cannot be complacent as far as customer satisfaction is concerned.
several emerging trends affect the approach and tools banks employ to achieve sustainable growth. 66 . Intensifying competition. 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. the ability to maximize customer loyalty through close and durable relationships is critical to retail banks’ ability to grow their business. opening accounts and closing service requests can be drastically improved. 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). As banks strive to create and manage customer relationships. Today. more than ever before. proliferating customer contact channels. escalating attacks on customer information.• Turn around time (TAT) for closing leads.
a handful of retail banks boast of globally integrated delivery channels that are built on standard technology principles. Quantifying the effects of fixing this problem proves to be tricky. however. 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. No institution. as well as business managers that rely on the delivery channels to their service products.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. 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.g.. for e. Today. These channels can. IT managers within the bank. deliver consistent architecture. however. 67 . can claim to have all channels working on a common platform or claim even to share information or process across all channels.
68 . Bankers are getting better at knowing how to calculate customer profitability. even recognize attrition behavior thanks to the segmentation and focus of solution providers in the analytics markets. On the sales side. The implementation of integrated delivery channels has to date focused on the service side of the relationship equation. Customer knowledge databases and analytic engines have made the selling process more predictable then ever before. both of which traditionally have had low response rates. predict propensity to buy. But the actual use of the information from these systems has been limited to mail campaigns and outbound telemarketing. marketing and product line managers have benefited greatly from a relatively plentiful source of analytics systems in the market. Although. or are in the process of designing. 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.SERVICES AND SALES PROCESSES MADE MORE PREDICTABLE Many banks have implemented. these rates have improved somewhat with the improved customer knowledge in hand.
But the marriage of integrated delivery channels and customer knowledge is not a trivial arrangement. 69 .Thus. channels. themselves. neither the chicken nor the egg came first. The opportunities to combine these powerful capabilities are built in to the very systems that enable them individually. technology is not the problem. for banks. 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. Institutions are already collecting most of the available information today such as identity. perhaps. To build on the full strength of this collaboration. Data acquisition through customer interaction is determined by the delivery channels. account. For once. and then tread lightly. or through some integrated channel management architecture. Both arrived at the same time. banks need to completely understand the issues surrounding the use of knowledge.
specialized applications collect and analyze information about the customer interaction. time of the day. there seems to be no need to collect information that is not currently acquired. that information is available at all appropriate channels. 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. What is required is the use of the data in managing the relationship with the customer in a more fulfilling way. Banks can also collect and store information about nontrivial transactions to provide continuity among customer contacts. So if a customer has an unresolved problem. For now. to give insight into customer behavior. 70 .transactions performed. Such basic information is included in the transactions that are sent to the core of the banking system such as a credit processor. Along with the use of transactional information by the systems that perform the basic units of work. itself.
This information can also be made available to the automated channels to keep the customer aware of the status of problems or account applications. tying to a quantified loss. the next step includes analysis of the customer’s behavior across in a broader context. • Using customer preference to understand the individual customer’s favorite channels for specific transactions. and analysis of how customer uses these products. 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. this management of information from the delivery channels offers many benefits to the institution and the customer. 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.While many institutions are currently performing such analysis with a given channel. analysis of all external providers of service. 71 . • Keeping certain transactions open – ended to maintain continuity of service. 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. By itself.
As these two infrastructures evolve. banks must begin from strategies around the use of information in the day – to – day contact with the customers. so. Privacy is an emotional issue and. The use of information between the knowledge systems and the delivery channels has yet to be fully realized. not entirely rational. Already. it has the potential to out space the customer’s acceptance of the bank’s knowledge. 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.POWERFUL CUSTOMER KNOWLEDGE SYSTEMS FOR THE FUTURE The pace of implementation of integrated delivery channel architectures will quicken and eventually prevail at top banks. As the capability to build on this flow of information grows. many institutions use information gleaned from the customer knowledge systems to suggest new products to the customers at the branch teller. the integration between them will also increase. Relationship training is more important 72 . 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. With most of the technology in place.
it’s about trust as a result of knowing the customer and not as an excuse for misusing information. the management of customer information at the point of interaction is about service. not a business practice. CRM is just a philosophy to be bandied about in boardrooms. Companies can get a lot of mileage out of effective CRM practices. Some facts to chew before we get started: 73 . about keeping the customer happy. and doing it in way that does not sacrifice the customer’s long term well being. about keeping the customer. and. But essentially. It’s about increasing the bank’s benefit as well.than before as banks begin to learn more about their customers and use that information to bring financial value to them. being customer focused means to have a consistent. Most companies consider themselves customer focused and believe that in being so they are servicing the customer. Ultimately. CRM: Do you get along with your customers? Most companies say they do. It’s about strengthening the relationship and showing the customer that the bank’s knowledge can lead to real benefit. Finally. simply put. But for many. dependable and convenient interaction with customers in every encounter.
CRM is an integrated framework. partners and vendors. marketing and service strategy that precludes lone existence and depends on coordinated actions among the customer. • 70% of customers will do business with the company again if it quickly takes care of a service. E-CRM goes a step ahead and adopts Web – centric approach that synchronizes customer relationships across communication channels.• It costs six times more to sell to a new customer than to sell an existing one. 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. business functions and audiences. • A company can boost profits but 85% percent by increasing annual customer retention by just 5%. CRM is typically defined as an integrated sales. the suppliers. or a business strategy. what they like. and what they do… 74 . CRM tools help companies understand their customers from a multi faceted perspective: who they are.
ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT (E-CRM) 75 .
is 76 . 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. making it an important tool for all small and medium businesses. marketing and service strategy that is used to identify. is according to Paul Greenberg (2000). attract and retain an organization’s customers. It describes improved and increased communication between an organization and its clients by creating and enhancing customer interaction through innovative technology.
using the internet technologies. EVOLUTION OF E-CRM Database marketing Behavior based marketing E-CRM 77 . if the customer prefers to use emails and not telephone.CRM on line. New technologies mean availability of additional faster means of communication between the customer and the organization. For e. E-CRM implies interaction with the customer using these new technologies.g. It provides organizations with tools for a high level of interaction communications with the customers with personalized messages. E-CRM provides a high degree of self service to the customers. the traditional and latest technology based. the organization will ensure this while dealing with the customer.. by understanding customer’s needs and personal preferences. This definition dispels all the doubts people might be having about E-CRM. E-CRM shares all the philosophy of CRM and the only difference is the underline technological architecture. E-CRM integrates all the communication from and to the customer from various channels both.
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. Though the core of E-CRM remains to be cross channel integration and optimization. The six “e” in E-CRM can be used to frame alternative definitions of E-CRM based upon the channels 78 .
2. Economics: An E-CRM strategy ideally should concentrate on customer economics. 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. interactive and economic communication. challenging companies to keep pace with this increased velocity. at what frequency? An E-CRM solution must be structured to deliver timely pertinent. Enterprise: Through E-CRM a company gains the means to touch and a shape a customers experience through sales. which drive smart asset-allocation decisions. 4. which channel. valuable information that a customer accepts in exchange of his/her attention. Through. Electronic channels: New electronic channels such as the web and personalized e-messaging have become the medium for fast. services and corner offices whose occupants need to understand and assess customer behavior. E-CRM thrives on these electronic channels. the six “E’s” of E-CRM are briefly explained as followed: 1.which E-CRM utilizes. 79 . 3. the issues which it impacts and other factors.
Evaluation: Understanding customer economics relies on a company’s ability to attribute customer behavior to market programs. 6. • Retention (increasing the amount of time that customer stays customers). 5. evaluate customer interactions along various customer touch point channel. 80 . and compare anticipated ROI against actual returns through customer analytic reporting. 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. • Expansion (increasing portability by encouraging customer to purchase more products and service).directing efforts at individuals likely to provide the greatest return on customer communication initiatives. ONE MUST ADDRESS CUSTOMER OPTIMIZATION ALONG THREE DIMENSIONS • Acquisition (increasing the number of customer).
A company should be able to identify the opportunities to cross sell and up sell to the same set of customers. A DIRECT BENEFIT OF AN E-CRM SYSTEM INCLUDES • Service level improvements – Using an integrated database to deliver consistent and improved customer responses. marketing and service personnel with better. more complete customer information. • Revenue growth – Decreasing cost by focusing on retaining customers and using interactive service tools to sell additional products. This will improve the customer’s overall experience in dealing with the organization. WHAT ARE THE BUSINESS BENEFITS OF ECRM? Implementation of E-CRM system enables an organization to streamline process and provide sales.An E-CRM strategy must be able to identify the expansion potential for each customer. 81 . The result is that an E-CRM organization to build more profitable customer relationships and decrease operating costs. • Customer satisfaction – Automatic customer tracking and detection will ensure enquires are met and issues are managed. ECRM solution should also establish a central mechanism to determine which customer should receive which investment at relationship level. • Productivity – consistent sales and service procedures to create efficient work processes.
82 . Lead tracking and response. Quotes and order configuration. • Marketing organization can increase campaign response rates and marketing driven revenue while simultaneously decreasing lead generation and customer acquisition costs.• Automation – E-CRM software helps automatic campaign including Telemarketing. • Customer service organizations can increase service agent productivity and customer detention while decreasing service cost. Direct mail. Opportunity management. average order size and revenue per customer. Across every sector and industry. 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. response time and request resolution times.
E-CRM gives you the ability to know more about customers. products and performance results using real time information across your business.HOW DOES E-CRM WORK In today’s world. dealers and partner networks. field sales people. customers interact with an organization via multiple communication channels – the World Wide Web. Through this system. call centers. in any language or currency – and to make customers feel that they are dealing with a single. 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. Many organizations also have multiple lines of business that interact with the same customers. unified organization that recognizes them every step of the way. 83 . E-CRM system enables customers to do business with the organization the way the customer wants – anytime. via any channels.
E-CRM BENEFITS TO CUSTOMERS • Customer interaction and satisfaction. • Transaction security. • • Convenience. • Website to market product or services.response.E-CRM BENEFITS TO BANKS • Relationship with customers. • Service quality and trust. Speed of processing the transaction through e. • Using e-mail for business communication. • Personalized services or one – to – one services. 84 .
CRM EVERYWHERE By investing in CRM or e-CRM applications companies are looking at retaining existing customers and converting potential customer into lifetime customers. Also not to ignore. In certain industries. Various studies have reflected that the CRM industry is poised to grow at an exponential rate. Companies that have fewer than 100 employees can now adopt and implement these applications. it is critical for any business to meet the expectations of the customers (that is changing ever so fast…) For long. with the advent of new technologies. Also. Today. customer retention is a key driver for profitability. advancement and choice of technology have permitted the cost of these technologies to fall to an affordable rate. 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. only enterprises thought of such applications as part of their business processes. solution 85 . with competition being the ‘key’ word in every industry.
clean. 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. stored in a format that makes it easily accessible for analysis and then analyzed by statisticians so that meaningful information regarding customer behavior.based on e-CRM already account for a third of the $100-billion global market for customer care. making the process 86 . friends and attitudes can be extracted.
millions and solutions overrun budget become impossible to deploy. When it comes to an enterprise e-CRM solutions.indispensable to marketers in developing targeted initiatives and to management needing near term project. 87 . In many instances. let alone provide the desired results. E-CRM initiatives are often implemented with to many business objectives in mind and managed by departments with different priorities and conflicting politics. few of the multi million dollars initiatives ever see the light of the day.
PRESENT AND THE FUTURE OF CRM.THE PAST. PRESENT AND THE FUTURE OF CRM CRM means many different things to different people.” -Anonymous THE PAST. By CRM it’s possible to develop a greater understanding of it by looking at its origin and the principles that drove its development. “As the years have gone by CRM has gained global importance. 88 .
1970’s – Saw the beginning of segmentation. we can see the following clearly developments and progression over the last few decades: 1960’s – The era of mass marketing. a number of key marketing concepts can also be used to see where CRM has developed from: • Satisfying needs. the explosion of telemarketing and call centers all setup to develop relationships with the customers. 1980’s – Where niche marketing made millionaires of those who were best at it. the recognition of the true value of retention and the use of lifetime value as a business case. we more clearly see where the benefits may be derived and we where we should see CRM developing over the next few years. direct mail campaigns and clearly telemarketing. THE PAST Looking back at a snapshot history of marketing. it is possible to understand more clearly how it could be applied to our business. 89 . 1990’s – Relationship marketing.By then examining the present day definitions of what it means. By looking at the future of CRM. In addition to this. customer orientation.
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. It is possible to draw further information definition of marketing and direct marketing. MARKETING “Determining the needs and want of target markets and delivering the desired satisfaction more efficiently and effectively than the competition.• The organization needs to be arranged so that all functions contribute.” THE PRESENT 90 .” DIRECT MARKETING “The planned recording. • Profit must be the consequence of delighting customers.
91 . What we are finding is that the organizations are now moving through several stages of CRM. Minimal evaluation of PREFORMANCE BASED PRO-ACTIVE customer service level. Evaluate customer needs. Identify customer retention COMMITMENT BASED VERY PRO-ACTIVE factors.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. Continuous improvements. Evaluate customer perception. Respond to complaints. STAGE SATISFACTION BASED STATE RE-ACTIVE CULTURE Meet customer needs.
• Make the best possible use of customer information – particularly when you are transacting with them. In terms of what the future holds • Customers will play a significant role in managing relationships service models will continue to change (skills. they need to look beyond this to the changes in customer expectations. However. • Be interactive. • The web will create globalization but will replace the need for people. volume. email/web/e-commerce). remuneration. • Use your people. • Recognize customer individuality. 92 . at least not for the foreseeable future. • Technology will consolidate (fixed and mobile telephone.THE FUTURE So what does the future hold? The astronomic development rates of technology are what many people see the key driver. • Develop end to end customer processes. transaction types).
CRM IN INDIA “INDIA IS A BIG MARKET FROM CRM” -DAKSH INDIAN CRM CO-SOURCING COMPANY 93 .
e-mail (e-CRM). CRM optimizes processes and functions related to the customer: All operations can be optimized and systematized to enhance efficiency and effectiveness. 94 . Sales automation results in more accurate predictions as well. Sales operations organizations have to make customer – facing systems more efficient and effective. CRM gives a complete set of tools that are required to improve efficiency. telephone.e. It offers a 360-degree view: A company should have a clear understanding of clients and their needs. the company is aware of the interaction. Personal Data Assessments and many other wireless devices. They problem lay in convincing the sales guy who believed in his personal abilities. In order to get a complete picture these must be integrated and tracked. finance or support. 1. This is one of the key steps of CRM implementation. sales force automation is critical. 2. Corporates began to realize that in the face of increasing competition. There are numerous channels of communication i. systems. irrespective of whether the communication is from operations. This is why sales force automation became important and critical. It means that whoever the company speaks to. sales.CRM IN INDIA In India CRM satisfies three basic objectives for companies that are keen on retaining customers and increasing market share. It is a matter of continuous improvement. fax.
95 . SURVEY REPORT ON INDIAN CRM MARKET • The need for improved customer service and high global adoption shall drive the Indian market.3. sales and any other function that interacts with the customer. To learn from integration: The learning process should be focused on bettering marketing. All these differences lead to the importance and need for CRM. you can target him better. This varies from customer to customer. Some customers have preferred channels of communicating. Some customers may not like to transact over the net but may prefer physical transaction. Their operations are aimed at getting the right customer and then retaining them by giving them the service they require. The interaction will help an organization to bring out better products that target potential and existing customers. • The high cost of implementation and low awareness of benefits is going to prove a major deterrent. The whole idea is that if you know your customer better.
ACCEPTANCE OF CRM IN INDIA MARKET DRIVERS • 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 MARKET INHIBITORS • • • • • • 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 96 .
probably because of improper implementation. HDFC bank and Citibank are using CRM products.CRM IN BANKS – INDIAN SCENARIO One industry best suited for the implementation of CRM is the Indian banking and financial service. However. 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. 97 . CRM market in India is still in a nascent stage. they have adopted new technology without a clear understanding of how to integrate it with the existing system and processes. Being short – sighted. Indian banks haven’t yet seen big results from CRM solutions. ICICI bank. Banks such as ICICI bank. which has the highest growth potential and accounts for 22% of CRM license revenue in 2002.
implementation in a phased manner will definitely lead to organization’s success in achieving the goals. Once this is done. processes and technology issues. CONCLUSION 98 . current and future IT initiatives can be formulated. prioritizing the related activities and their feasibility. In accordance with the strategies.Indian Banking Industry should aim to formulate strategies incorporating people.
Every time a company interacts with the customer. CONCLUSION It used to be that one could think of marketing as totally separate form the rest of the business enterprise. delivering on what we promised and having a shared vision on what it means having World Class Customer Service. SHELL EUROPE.“CRM is not simply about a system. the company customizes its service to be a bit more closely suited to the customer needs. 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.” -TOBY DETTER CRM HEAD. One of the benefits of CRM is that it would make a company’s customers more loyal. The company is getting a little higher up on the 99 . it is about serving our customers. and customizing your business for them. This is an inherently integrated operation. the dynamics have changed.
employees and information across an enterprise to attract and retain profitable customers. Much has been written about customer relationship management (CRM). That not only means listening carefully to what customers have to say. the jury is still out on whether CRM has fulfilled its promises. the diversity and range of products and services on offer form the banks are widening continually. 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. Moreover the companies are making the product more and more valuable to the customer.customers learning curve. Despite this. ‘Dog Eats Dog’ competition in banking has almost made CRM an in evitable solution. 100 . The key is to develop and nurture a close relationship with customers by understanding their needs and preferences and catering to their requirements. It has been called a strategic tool that combines business processes. The relationship with the customer is developing in its own context. 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. With customer expectations becoming increasingly demanding. Customers of today demand “UNIVERSAL BANKING”. This is possible if CRM is implemented in its true spirit. technology. but also following through with an improved organizational approach.
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. 101 . 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. sometimes even fledgling organisations with better planned systems and processes. spending patterns. needs. especially those focussed on retail such as banks. BPL Telecom and Air-India have successfully used these tools—and benefited. and causes of dissatisfaction. have suffered because of a lack of understanding of their clientele in terms of behaviour. because organisations like Standard Chartered Bank. 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. insurance providers and telcos. have grabbed some of their customers. It is a combination of technology and process change that has worked. ICICI Lombard. Rivals.
The challenge that lies ahead for banks is Four Fold 1. They need to address the demands based on supply chain. They must continually invent new products and services in the light of envisaged changes. They need to satisfy customer needs that are complex and difficult to manage. and business services should increase along with these potentials. 2.Customer mentalities are always growing. Here. the definition of CRM can be stated as a way through which companies can interact with their customers and so serve them better. CRM BASICALLY IS: 102 . 3. Businesses with wealthy CRM approaches and applications will result in a large raise in sales. customer pleasure. They need to face up to increased competition from within the sector and from new entrants coming into the financial services market. 4. and merely the overall achievement of the business.
RECENT SURVEY ON CRM 103 . No requirement of in-house technical persons. Extremely mobile with mobile/PDA/wireless Editions. Centralized well sorted enterprise database. Scalability and adaptability. Web based easy to use interface accessible from anywhere.CRM Vs Traditional CRM • • • • • • • • • • • • • • No in-house infra structure requirement. 30 day free trial. Better sales pipeline visibility. Entirely customizable to get desired result. Open-source CRM software made up of modules. Integration with office and web-based systems and programs. Always free updated to keep you on top. Better protection to enterprise data. 360 degree customer visibility and automated lead management.
if I meant it was easier to contact a customer service representative for enquiries. The Majority (96%). The survey commissioned by outsourced contact centre. 104 .000 Consumers. 80% of consumers will never go back to an organization after a bad customer experience. a Harris Interactive study sponsored by Right Now Technologies.According To The Second Annual Customer Experience Impact Report. up form 68% in 2006 According To A Survey Of 25. 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. Converso. would seriously consider changing a provider. rather than be faced by a recorded telephone message or no facility to speak to a live operator.
it is important to understand that CRM technology has developed. To create successful customer-centric organisations. It helps piece together information about customers. marketing effectiveness. but thinking about CRM solely in technological terms is wrong. evolved and matured over the years. It is now a reliable process that combines business and technology to power a customer-focussed organisation. CIOs and even CEOs are asked to repeat this mantra: “CRM is a business initiative and is not about technology. Technology can play a significant role in CRM being an enabler. sales. It is not about solving a technology problem. it is a process that aligns your business around your customers’ needs. 105 .THE MANTRA FOR CRM SUCCESS For companies that use CRM and those that plan to. responsiveness and market trends.focussed and develop stronger relationships with its clientele.” CRM is a management strategy that enables an organisation to become customer .
crmguru.com www.google.crmtoday.crmadvocate.com www.com www.crmnext.com www.BIBILOGRAPHY WEBSITE www.com MAGAZINES The Week Business Today Mint BOOKS CRM IN BANKING – By V V GOPAL UNDERSTANDING CRM – By R S PRASAD NEWSPAPERS Economic Times DNA Money 106 .
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