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of Master of Business Administration of Bangalore University
Submitted By, K.GNANASAMBANDAM Reg. No – 04VWCM6024
Under the guidance of Prof. Rathnakar Acharya, Alliance Business Academy, Bangalore.
ALLIANCE BUSINESS ACADEMY BANGALORE - 560076
I, K. Gnanasambandam, studying in Alliance Business Academy, Bangalore do hereby declare that this Dissertation Report “A Study of End-user satisfaction of CRM systems in banking sector” is an original research work carried out by me, as part of the requirements of the MBA Program of Bangalore University (Batch of 2004 – 2006). My guide for the Dissertation work has been Prof. Rathnakar Acharya. I further declare that this dissertation report has not been submitted earlier to any other University or Institute for the award of any Degree or Diploma.
Date: Place: Bangalore
K. GNANASAMBANDAM Reg. No 04VWCM6024 ALLIANCE BUSINESS ACADEMY
I, Prof. Rathnakar Acharya, hereby certify that this dissertation report titled “A Study of End-user satisfaction of CRM systems in banking sector” has been successfully carried out by K.Gnanasambandam with Registration number – 04VWCM6024 under my supervision and guidance.
Place: Bangalore Date: Prof. Rathnakar Acharya, Alliance Business Academy Bangalore.
Alliance Business Academy for his valuable guidelines and continuous encouragement. Prof. Chairman. My heartfelt thanks to my guide.V. Sudhir G. I would like to thank all of my friends. Alliance Business Academy. Director and Executive Vice President. I record my thanks to all the respondents who spend their valuable time providing the information which was imperative to this work. Bangalore and Dr. faculty. K. Angur. colleagues and to the best parents a kid can hope for. Rathnakar Acharya. B. Gnanasambandam . who were always my true sense of inspiration.Krishnamurthy. Alliance Business Academy.ACKNOWLEDGEMENT I would like to express most heartfelt gratitude to Prof. In the end. for providing me the much necessary encouragement to take up this dissertation work.
3 CRM CAPABILITIES 1.1 3.3 2.5 2.9 FEATURES OF GOOD CRM SYSTEM 2. THE CRM MARKET PROFILE 3.4 IMPLEMENTING CRM 1. INTRODUCTION TO CRM 1.8 CRM IN BUSINESS 1.4 2.6 2.3 3.1 RELATIONSHIP MANAGEMENT: CHANGING PARADIGMS IN MARKETING 1.2 BUSINESS PROCESSES IN CRM 1.TABLE OF CONTENTS CHAPTER NO LIST OF FIGURES LIST OF TABLES EXECUTIVE SUMMARY 1.4 THE INDIAN MARKET CHANGING DYNAMICS MARKET DRIVERS AND INHIBITORS CRM LANDSCAPE TRENDS IN CRM MARKET 22 23 24 26 4.7 TECHNICAL FUNCTIONALITY 1.2 3.2 2.6 PURPOSES OF CUSTOMER RELATIONSHIP MANAGEMENT 1.7 PROBLEM STATEMENT RESEARCH OBJECTIVES RESEARCH PLAN RESEARCH METHODOLOGY SAMPLING PLAN CONTACT METHODS RESEARCH INSTRUMENT 18 18 18 19 20 21 21 1 3 3 6 7 11 13 13 14 TITLE PAGE. NO. DESIGN OF THE STUDY 2. 3. CRM IN BANKING .5 ARCHITECTURE OF CRM 1.1 2.
5 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED USER PRODUCTIVITY 5.3 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED CUSTOMER SATISFACTION 5.4 CRM IMPLEMENTATION IN BANKS IN INDIA 5.8 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED CUSTOMER RETENTION 5.3 OVERCOMING IMPLEMENTING HURDLES WHILE 29 31 33 CRM 4.9 CRM MARKET SHARE IN BANKING SECTOR 5. ANALYSIS AND INTERPRETATION 5.2 CRM IN BANKING 4.7 TIME REQUIRED TO REALISE A RETURN ON INVESTMENT 5.1 RETAIL BANKING 4.10 RESPONDENT INVOLVEMENT WITH CRM SYSTEMS 6.4 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED REVENUE 5. SUMMARY OF FINDINGS RECOMMEDATIONS CONCLUSION BIBLIOGRAPHY ANNEXURE 34 36 37 40 41 42 43 44 45 46 47 48 51 53 55 .4.1 END-USER SATISFACTION MEASUREMENT METHODOLOGY: GAP ANALYSIS 5. 7.6 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON DECREASED OPERATING COSTS 5.2 END – USER RATING OF CRM SYSTEMS ON VARIOUS FACTORS 5.
1 5.5 5.2 3.LIST OF FIGURES FIGURE NO.6 TITLE Business processes in CRM CRM transformation Map Best-fit sectors for CRM practices and packages Top-of-mind CRM Packages Market Drivers and Inhibitors Desired End – User rating of CRM systems on various factors on a scale of 1 to 10 Actual End–user satisfaction rating of CRM systems on various factors on a scale of 1 to 10 GAP scores of CRM systems on various factors Response Statistics for impact of CRM systems on increased Customer satisfaction Response Statistics for impact of CRM systems on increased revenue Response Statistics for impact of CRM systems on increased User productivity PAGE NO. 3 5 22 23 23 37 37 38 40 41 42 .3 5. 1.3 5.2 3.4 5.1 3.2 5.1 1.
10 5.8 5.5.7 5.11 Response Statistics for impact of CRM systems on decreased Operating costs Response Statistics for time required to realise a return on investment Response Statistics for impact of CRM systems on increased Customer retention CRM Market share in banking sector Respondent involvement with CRM systems 43 44 45 46 47 .9 5.
40 41 42 43 44 45 46 47 48 49 49 EXECUTIVE SUMMARY Today information technology conscious society has increasing appetite for the skills of others.7 5.4 5.2 6.3 5.1 5. as a result the service industries are growing. 5.5 5.6 5.8 6. Marketers have now realized .3 TITLE Responses for impact of CRM systems on increased Customer satisfaction Responses for impact of CRM systems on increased revenue Responses for impact of CRM systems on increased User productivity Responses for impact of CRM systems on decreased Operating costs Responses for time required to realise a return on investment Responses for impact of CRM systems on increased Customer retention Responses for what CRM system was in use in the organisation Responses for Respondent involvement with CRM systems End-User rating of CRM system Gap Scores for various factors Correlations for GAP scores PAGE NO.1 6.2 5.LIST OF TABLES FIGURE NO.
The financial services industry including banking and insurance. as in India the customers are still at the receiving end only. hence this work concentrates on banking sector.that in the global and highly competitive market place and market space. This demands marketing efforts to be more informative. as they are unable to comprehend the benefits of this approach to enhance their relationships with their customers and ultimately gain the long-term profitability profits. This work tries to capture upon those key issues. . CRM approach is still new for the corporate managers. customer and service oriented. which are critical for evaluating and estimating the utility of CRM and its implementation in Banking sector. CRM – Customer Relationship Management is an innovative approach undertaken by the marketers in the process of developing lifetime customers and maximizing lifetime value of the customers. Focusing further the banking sector holds a good percentage for employment of Customer Relation Management software. success rests on the firm’s ability to attract. accounts for the major customers of CRM vendors. The study also focuses on finding out the Gap between expected level of performance and actual level of performance of the CRM system in the end-user perspective. satisfy and retain its customers. The concept of CRM and its implementation creates chaos for the marketers. The purpose of this work was to study the CRM environment in banking industry and to find out the CRM market scenario in banking sector.
Branch operations managers. Return on investment in the banking sector due to deployment of CRM systems. . In this research. The relevant population who were information elements of this work was the Branch managers. Further questionnaires were administered to gather the required primary data. The results lighten up the actual rating of CRM systems by the end-users on various factors. This research work has made a sincere attempt to study the gap that exists between the expectations of the CRM users in banking industry and the actual benefit offered by this approach and then has suggested strategies that could be implemented to fill these gaps. and assistant managers of various banks. The work presents data on the factors driving satisfaction for the end-users of CRM systems in banking. Customer retention. Customer satisfaction. Relations officers. Hence a descriptive study was appropriate for the work. Operating costs.The other major objective of the study was to determine the impact on User productivity. the problem has been identified and the requirements have been clearly defined in the problem definition and the objectives have been set. Change in revenue.
many firms are paying more attention to their relationships with existing customers to retain them and increase their share of customer’s purchases. 1 . being the most potent and effective to compete globally in this emerging marketing environment is Customer Relationship Management. 1. CRM works on the theme of retaining existing customers i. On average. The world is becoming a ‘buyers’ market. Keeping customers happy is not just good public relations. Studies have proved the worth of CRM in turning the customer service into customer sales.. Banks have relationship managers for select customers. Behind this turbulence lies a series of frequently cited environmental factors: Technological advances. businesses spend six times more to acquire customers than they do to keep them.1. Highly empowered and informed customers have made Customer Relationship Management (CRM) – a most important area to concentrate upon by the marketers. and hotels have personalized services for their regular guests. INTRODUCTION TO CRM These are turbulent times in the world of organizations and there is every indication that it will continue beyond the turn of the century and it into the new millennium.1 RELATIONSHIP MANAGEMENT: CHANGING PARADIGMS IN MARKETING Relationship management is emerging as the core marketing activity for businesses operating in fiercely competitive environments.e. where increasing discerning customers are freer than ever to select their global market place. that has created intensified global competition. These forces have changed and continued to change the dynamics of marketplace but the only tool that perceived to make sense. airlines have frequent flyer programs to reward loyal customers. it is an essential part of sound business strategy. Therefore. telecom service operators provide customized services to their heavy users. credit cards offer redeemable bonus points for increased card usage. most businesses get customers but successful businesses keep them. Deregulation of markets etc.
is an enterprise-wide initiative that belongs in all areas of an organisation. It enables the marketing. service oriented and relationship oriented. changing customer profile. The full implications of customer relationship management could mean a dramatic shift in emphasis by the supplier from organisation by function to an organisation aligned to specific customers or groups of customers. active informed and cautious customer. harsh marketing environment etc.1 CRM – A SNAPSHOT VIEW The development of information superhighway and opening up of the digital markets has made marketing efforts more information oriented. conceptually.1. brand proliferations. 1. frequent new product introductions.There is a radical shift from conventional to relationship marketing which can be attributed to a number of reasons viz: competitive pressures. CRM. means changes in the structure of the business. these factors clearly reveal that marketers cannot totally depend on new customers to take the place of lost customers. Customer-Driven business management should be embraced by all functions at all levels. the responsibilities and the relative status of the individual in the business and maybe even the product itself. 2 . in turn. As a philosophy Customer Relationship Management is the most significant development in the evolution of marketing since the 1960s. sales and service functions to be truly integrated. fickle brand loyalties and rapid customer turnover. They are required to focus on developing. keeping and improving current customers rather on acquiring new customers as customers prefer to have an ongoing relationship with one organisation that to switch continually in their search for value. industry maturity and recessionary pressures. which. shrinking product life cycles. company priorities to be clarified and resources to be more planned and cost-effectively deployed. It has enabled the marketers to provide customized product or service offerings and develop value laden long lasting relationships with the customers.
cross-sell and ultimately customize products and services. up sell. and after the sales cycle. sales. it is incumbent upon marketing. marketing and service processes.1. during.2 BUSINESS PROCESSES IN CRM The goal of CRM is to share a single view of the customer across all touch points and interactions before. partners.3 CRM CAPABILITIES • Integration of interactive technologies and customer centric business processes to identify. Strategies. Therefore. and service managers to track customer history. interactions. sales. and preferences and use this knowledge to build the relationship. A customer centric business intelligent system to create decision support systems for efficient sales. and service functions affecting employees. . The various processes in CRM processes span across marketing. behaviour. • • A business strategy to create “intelligent” opportunities to retain customers. and customers at all points of interaction in the relationship cycle. 3 .1: Business processes in CRM 1.Customer Segmentation Campaign Management Marketing Content Management Customer and Transaction Analysis .Sales force and Forecast Mgmt Account Management Opportunity Management Order Management .Service Delivery Inquiry and service resolution Customer Satisfaction measurement Fig 1. learn and predict buyer behaviour and to create one to one marketing.
The CRM processes also incorporate newfound knowledge into existing customer related operational systems and analyze the results of previous actions to predict which customer segments are more likely to respond to which type of campaign or product offering.The customer relationship management (CRM) solutions allow a company to bring together the most complete repository of information about customer and competitorsincluding market research data from both internal and external sources-within a single. Transforming the business focus of an organization essentially means getting the organization to buy into the customer-focused paradigm. The transformation to a customer-focused organization should lead to literally organizing around your customers – assigning customer segment manager’s responsibility for the acquisition.3. The stages of transformation are shown from left to right – from Product to customer. retention and growth of different segments of customers. customer-centric data warehouse. and how can we meet those needs?" Changing the organizational structure of a company goes hand in hand with the change in business focus. This enables a company to develop new products or reposition or abandon existing ones to satisfy customer demands and give competitive advantage in the market place. They offer multidimensional data analysis and data mining techniques to explain what drives profitability by identifying the most profitable current customers and predicting future customer profitability. 1.1 REQUISITES TO PROMOTE CRM INITIATIVES There are five key aspects that an organisation will have to change in order to truly support and foster CRM initiatives. The business focus may shift from "How can we increase the sales of our products" to "What do our customers need. Exploiting such a repository leads to a deeper understanding of market trends and competitive marketing activities. It is a matter of an organisation shifting its emphasis over time. 4 .
Finally. you have to be able to implement – to provide differential customer experiences through marketing. the shift is from a single focus on product performance. In this case. as in this case you are only as strong as your weakest link.com Transforming the business metrics should be a by-product of the changes previously noted. there is an essential technology transformation. CRM technology must support and enable meaningful customer dialogue at all points of contact. CRM in a nutshell can be described as a discipline as well as a set of discrete software and technologies which focuses on automating and improving the business processes 5 .Siebel.2: CRM transformation Map Source: www. Changing the marketing focus or customer interactions within your organization from mass to interactive dialogue is also essential.PRODUCTS SALES CHANNELS MARKETING SERVICES CUSTOMERS PRODUCT MGMT PLACE MGMT PROMOTION MGMT CHANNEL MGMT CONTACT MGMT CUSTOMER MGMT PRODUCT PERFORMA NCE PLACE PERFORMA NCE PROGRAM PERFORMA NCE CUSTOMER REVENUES CUSTOMER CUSTOMER SATISFACTION LIFETIME VALUE LOYALTY CUSTOMER MASS OPPORTUNISTIC TARGETED SEGMENT CONTACT TRANSACTION PROMOTION SPECIFIC CAMPAIGNS ENVIRONMENT COMMUNICATION INTEGRATION INDIVIDUAL PERMISSION BASED INTERACTION DATA TRANSACTION PROCESSING MAINTENANCE DATA ACCESS DATA WAREHOUSE DATA MARTS CUSTOMER TOUCHPOINT SYSTEMS Fig 1. sales and service. If you change your business focus and organize around your customers. or decentralized views of these metrics to a focus on customer lifetime value and loyalty. and/or promotion performance. Four out of five or some other fractional level of participation will not work. It is important to keep in mind that all five of these areas need to change in order to effectively support CRM.
marketing. the customer's past financial history. instead of a whole business strategy. A good CRM program needs to: Identify customer success factor 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. The term itself is meant to describe the whole business strategy (or lack of one) oriented on customer needs. sales. This approach may include training of employees. 6 . The main misconception of CRM is that it is only a software. and customer service. the effects of the CRM segment and what information is not useful. When setting up a CRM segment for a company it might first want to see what profile aspects it feels are relevant to its business. 1. Being able to eliminate unwanted information can be a large aspect of implementing CRM systems. a modification of business processes based on customers' needs and an adoption of relevant IT systems (including software and maybe hardware) and/or usage of IT services that enable the organization or company to follow its CRM strategy. customer service and support. such as what information it needs to serve its customers. a holistic approach is needed.4 IMPLEMENTING CRM A successful CRM strategy cannot be implemented by simply installing and integrating a software package. CRM services can even replace the acquisition of additional hardware or CRM software licences.associated with managing customer relationship in the area of sales. To be effective. the CRM process needs to be integrated end-to-end across marketing.
in person) 1. Tasks resulting from these processes are forwarded to employees responsible for them. and service through multi-channel collaboration Enables a 360-degree view of your customer while you are interacting with them Sales people and service engineers can access complete history of all customer interaction with your company. email.support to analyze customer behavior. fax.5 ARCHITECTURE OF CRM There are three parts of application architecture of CRM: Operational .When designing a CRM's structure. regardless of the touch point 7 . sales. post. service) Analytical . implements business intelligence alike technology Collaborative . a company may want to consider keeping more extensive information on their primary customers and keeping less extensive details on the low-margin clients.1 OPERATIONAL CRM Operational CRM means supporting the "front office" business processes. web. sales. Operational CRM provides the following benefits: Delivers personalized and efficient marketing. marketing and service).automation to the basic business processes (marketing. which include customer contact (sales. as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference. sms.ensures the contact with customers (phone. 1.5.
etc). complaints. Key infrastructure requirements of SFA are mobile synchronization and integrated product configuration.Sales force automation (SFA) SFA automates some of the company's critical sales and sales force management functions. When a customer calls. industry trends.The operational part of CRM typically involves three general areas of business: . including competitors. quote management.Enterprise marketing automation (EMA) EMA provides information about the business environment. Functions include demographic analysis. using multiple channels (Web. the system can be used to retrieve and store information relevant to the 8 efficiencies. face-to-face. sales administration. buying habits. contact management. kiosk. for example. and predictive modeling occur on the analytical (Business Intelligence) . keeping track of customer preferences. and demographics. forecasting. The intent of EMA applications is to improve marketing campaign side." This is because they deal directly with the customer. It is the execution side of campaign and lead management. lead/account management. product returns. and macroenviromental variables.Customer service and support (CSS) CSS automates some service requests. phone/fax. . as well as performance management. Integrated CRM software is often also known as "front office solutions. Many call centers use CRM software to store all of their customer's details. variable segmentation. and reliability. Key infrastructure requirements of CSS include computer telephony integration (CTI) which provides high volume processing capability. and information requests. SFA tools are designed to improve field sales productivity. Traditional internal help desk and traditional inbound call-center support for customer inquiries are now evolved into the "customer interaction center" (CIC). .
Contact Optimization 4.customer. and also keeping all information on a customer in one place. Campaign management and analysis 2. CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. 1. By serving the customer quickly and efficiently. Examples of Campaigns directed towards customers are: Acquisition: Cross-sell. and also encourage new customers. For example.5. a company aims to make cost savings. performance etc. you might be able to check your bank balance via your WAP phone without ever having to talk to a person. Predictive modelling of customer attributes Strategy and research. metrics. Customer analysis typically can lead to targeted campaigns to increase share of customer's wallet. Analysis typically covers but is not limited to: Decision support: Dashboards. data gathered within operational CRM and/or other sources are analyzed to segment customers or to identify potential to enhance client relationship. and saving your time. saving money for the company. Contact channel optimization 3. Modification: Altering details of the transactional nature of the customers' relationship. reporting. Customer Acquisition / Reactivation / Retention 9 . Analysis of Customer data may relate to one or more of the following analyses: 1. up-sell Retention: Retaining customers who leave due to maturity or attrition.2 ANALYTICAL CRM In analytical CRM. Information: Providing timely and regular information to customers.
Sales Coverage Optimization 8.conversational. phone. It is a solution that brings people. based on feedback from earlier analysis and decisions. 1. Program Evaluation 13.3 COLLABORATIVE CRM Collaborative CRM facilitates interactions with customers through all channels (personal. Therefore. Product Development 12. The data/activities can be structured. most successful analytical CRM projects take advantage of a data warehouse to provide suitable data. Financial Forecasts 10. processes and data together so companies can better serve and retain their customers.5. Pricing Optimization 11. Risk Assessment and Management Data collection and analysis is viewed as a continuing and iterative process. business decisions are refined over time. Fraud Detection and analysis 9. letter. fax. Customer Segmentation 6. e-mail) and supports co-ordination of employee teams and channels. and/or transactional in nature. Customer Satisfaction Measurement / Increase 7. Ideally.5. Collaborative CRM provides the following benefits: Enables efficient productive customer interactions across all communications channels Enables web collaboration to reduce customer service costs Integrates call centers enabling multi-channel personal customer interaction Integrates view of the customer while interaction at the transaction level 10 . web. unstructured.
improving customer service. A good CRM program can improve customer service by facilitating communication in several ways: Provide product information. and repurchase frequencies. Provide a mechanism to track all points of contact between a customer and the company. repurchase probabilities. A good CRM program will allow a business to acquire customers. Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance. and technical assistance on web sites that are accessible 24 hours a day. 7 days a week. Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved. Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction). and are a major source of customer dissatisfaction). Help to identify potential problems quickly. Identify how each individual customer defines quality. increase the value of the customer to the company. This includes. and all users of the system see the same view of the customer (reduces confusion). and do it in an integrated way so that all sources and types of contact are included. Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction). and then design a service strategy for each customer based on these individual requirements and expectations. service the customer. in its broadest sense. means managing all interactions and business with customers.6 PURPOSES OF CUSTOMER RELATIONSHIP MANAGEMENT CRM. 11 . retain good customers. product use information. but is not limited to.1. before they occur. repurchase times. and determine which customers can be retained or given a higher level of service.
needs. This way customers get exactly what they want as they change. increase customer loyalty. increase sales revenue. repair. comes from customer satisfaction . The technology can track customer product use as the product progresses through its life cycle. When any of the technology-driven improvements in customer service (mentioned above) contribute to long-term customer satisfaction. The CRM can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it. and thereby increase profit margins. Repeat purchase. and on-going support (improve efficiency and effectiveness). Provide a fast mechanism for managing and scheduling maintenance. Use the Internet to engage in collaborative customization or real-time customization. and buying habits as they progress through their life cycles. In industrial markets. This way customers get what they need as the product ages.which in turn comes from a deeper understanding of each customer. and tailor the marketing effort accordingly. decrease marketing costs (associated with customer acquisition and customer “training”). decrease customer turnover. however. they can ensure repeat purchases. Use internet cookies to track customer interests and personalize product offerings accordingly. 1.6.1 IMPROVING CUSTOMER RELATIONSHIPS CRM programs also are able to improve customer relationships. their individual 12 . and tailor the service strategy accordingly. the technology can be used to micro-segment the buying centre and help coordinate the conflicting and changing purchase criteria of its members. improve customer relationships. Proponents say this is so because: CRM technology can track customer interests.
in particular.the ability to trigger a process in the backoffice system.g. and to be reliably expanded to whatever scale is necessary. However. are often touted as less expensive communication methods in comparison to traditional ones such as telephone calls. g. e.the ability to be used on a large scale.7 TECHNICAL FUNCTIONALITY A CRM solution is characterised by the following functionality: scalability . 1. data encryption and the destruction of records to ensure that they are not stolen or abused. CRM software enables sales people to achieve this one on one approach to selling and can automate some elements of it via tailorable marketing communications. Some major companies believe that the majority of their clients trust other means of communication. etc. assignment . WAP. are 13 . These types of technologies service can be very helpful. internet.CRM is therefore a company-wide attitude as much as a software solution. Email Response.the centralised storage (in a data warehouse) of all information relevant to customer interaction customer privacy considerations. like telephone. however. more than they trust e-mail.8 CRM IN BUSINESS The use of internet sites and specifically e-mail.the ability to assign requests (Service Requests. multiple communication channels . but it is completely useless to a business that cannot reach its customers. etc) workflow . e. 1.the ability to interface with users via many different devices (phone. Sales Opportunities) to a person or group. Clients. all of these elements are facilitated by or for humans to achieve .business challenges and proposing solutions for those challenges rather than a "one size fits all" approach. database .
Before proceeding with a CRM system. 1. and cancellations. From prospect and client contact tools to billing history and bulk email management. There are several key characteristics of CRM software that are important to keep in mind. Front office systems are set up to collect data from the customers for processing into the data warehouse. orders. Shortcomings on either side can lead to failure. companies need their CRM systems to integrate seamlessly.9 FEATURES OF GOOD CRM SYSTEM A “one size fits all” approach to CRM rarely brings substantial business value. a company must carefully define its CRM strategy and evaluate the technology. With an emphasis on business requirements and an understanding of the technology that enables the strategy. It is up to the companies to focus on reaching every customer and developing a relationship. The data warehouse is a back office system used to fulfill and support customer orders.usually not the ones to blame because it is often the manner of connecting with consumers on a personal level making them feel as though they are cherished as customers. A lack of proper integration can lead to longer project 14 . The CRM system allows a business to maintain all customer records in one centralized location that is accessible to an entire organization through password administration. the company can ensure a successful and profitable implementation. To avoid replacing these support systems. Special regressions of this data can be very beneficial for the marketing division of a firm/company. All customer information is stored in the data warehouse. These include: 1. It is possible for CRM software to run an entire business.1 EASE OF INTEGRATION A company’s customer data and processes are located in many different support systems.9. Back office CRM makes it possible for a company to follow sales.
support for multiple integration methods.2 EASE OF CUSTOMIZATION CRM should be easily customized to meet specific business needs. CRM means changing your focus and the business processes to support it and then applying technology to automate those new processes. The most important factor to consider is compliance with standards-based architecture. CRM software has change management capabilities that allow IT departments. Such open architectures make it far easier to develop interfaces to the many legacy and operational systems that may be required for an implementation. standards-based architecture is vital for delivering CRM scalability. Upgradeability is also a key consideration. customer care executives and marketing departments to quickly and easily query and modify systems to accommodate the fast-changing needs of the marketplace.9. but also supporting real-time distributed databases. This is why CRM needs to be customized. CRM systems must exemplify the following characteristics: system extensibility. an integrated development environment.9. and extendable and modular architecture. including database. To deliver ease of customization. upgradeability of all customizations.3 EASE OF SCALABILITY Scalability is important because it addresses business needs into the future. user interface and business logic. wireless and disconnected users. Software is 15 . orders and other information it receives daily. and make it easier to maintain. and adoption of standards-based architectures. 1. 1. proper integration consulting and training.timelines and increased costs. Scalability means not only adding new users and application modules. ease of end-user configurability. and multiple interaction channels. In any implementation. support for industry-standard customization tools. it must be able to handle the volume of customer inquiries. the biggest mistake is to let the technology features drive CRM functionality. For CRM software to be successful. Effective integration tools include adapters and object interfaces. An open. Many companies say that mapping their business rules to software is one of the biggest “pain points” of implementing a CRM system.
customers and Web users. Sales is provided greater insight into customers so it can anticipate their needs and offer valuable solutions proactively. 1.4 RICH OUT-OF-THE-BOX FUNCTIONALITY The depth and robustness of a CRM vendor’s out-of-the-box functionality is critical to a successful implementation. supports the organization’s business processes and delivers faster return on investment. In the contact centre.9. the less customization is required.9. consistency and efficiency.5 BUSINESS PROCESS INTEGRATION Process flows determine the course of the customer life cycle and the manner in which it’s managed. as well as cutting the amount of customization required — shortening the time to production and lowering implementation costs. users.6 ACTIONABLE CUSTOMER DATA A CRM system can enable companies to cut costs and increase efficiencies in business processes that touch every facet of an organization. quick and easy functionality enables implementation. The greater the functionality. While it’s true that there is no such thing as off-the shelf CRM. Out-of-the-box process flows and management tools deliver all of these benefits. and analytics capabilities ensure that marketing campaigns always have the highest possible success rate.and back-office systems. features. 1. unified front end — both to improve call centre effectiveness and customer satisfaction. ensuring repeatability. agents require more than just data. With business processes running through multiple front. 1. it’s imperative to be able to manage and display these processes through a single. Troubleshooting groups resolve problems more efficiently and ensure that issues need be resolved only once. Particularly in 16 .needed that will grow with the business as it adds modules.9. they need information upon which they can act quickly and confidently to maximize every customer interaction.
7 MEASURABLE ROI AND A VENDOR TRACK RECORD Return on investment. it’s critical to monitor and measure the success of the CRM implementation on an ongoing basis. the total emphasis on the creation of a 360-degree view of a customer leads to a flawed CRM strategy and doesn’t necessarily lead to more profitable customer relationships. In today’s increasingly competitive market.high-volume contact centres. but an ongoing process. Keeping all of these important factors in mind will ensure a successful execution of a CRM strategy. This isn’t a one-time event. A better use of 360-degree knowledge of the customer is to present this knowledge to the agent as actionable data. like any measure. In addition to all of the above issues. companies are becoming increasingly aware of the need for CRM to focus on individual relationships and maximize profitability.9. is the instrument for measuring success and is not the success itself. Many vendors tout promises of specific returns but lack a track-record of success in delivering quantifiable results and are not willing to stand behind their promises. Agents require information that clearly directs them to a desired outcome. But the key is to focus on providing actionable information that will achieve the desired result. from presales through the many phases of the CRM implementation. 17 . Measuring ROI is crucial in times of tight IT budgets. Companies that are able to carefully select the most appropriate CRM applications and match them carefully to the benefits they are seeking will see a faster payback on their investments than enterprises that blindly implement CRM applications. Insights gleaned from customer analytics may not be presented in an appropriate form for the agent. These prompts can occur as a flash on the agent’s desktop or as an automatic trigger of relevant scripts. 1. All business units must be a part of the assessment in order to present an accurate picture of the ROI achieved.
2. DESIGN OF THE STUDY 2. To find out the CRM market scenario in banking sector. 2.2 RESEARCH OBJECTIVES • • • • To study the CRM environment in banking industry. To determine the impact on the following metrics due to deployment of CRM systems: User productivity Customer satisfaction Customer retention Change in revenue Operating costs Return on investment.1 PROBLEM STATEMENT “A Study of End-user satisfaction of CRM systems in banking sector” This was the statement of the problem that was undertaken to find out the satisfaction level of end-users of CRM systems in banking sector. To find out the Gap between expected level of performance and actual level of performance of the CRM system in the end-user perspective.3 RESEARCH PLAN TYPE OF STUDY ADOPTED: DESCRIPTIVE RESEARCH 18 . 2.
4 RESEARCH METHODOLOGY 2. Design of procedure for information collection 6. Some of the information presented in this work has been drawn from secondary data. Identification of target population and determination of sampling procedure 5. Descriptive research generally follows the following steps. Identification of information needed to solve the problem 3. 1. to developmental studies which seek to determine changes over time. Secondary data sources used in this work 19 . which have been gathered earlier for some other purpose. Analysis of information 8. are secondary data in the hands of marketing research. It is pre planned and structured. • • • The problem has been identified. Generalizations and/or predictions 2.4. the correlation study which investigates the relationship between variables. Selection or development of instruments for gathering the information 4. The methods involved range from the survey which describes the status quo.1 SOURCES OF DATA SECONDARY DATA Any data. Collection of information 7. Statement of the problem 2. Descriptive research is used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation.Descriptive Research has been used due to the following reasons. The requirements have been clearly defined in the problem definition and the objectives have been set.
2.2 SAMPLING SIZE AND PROCEDURE Larger samples give more reliable results than small samples.5.1 SAMPLING UNIT The marketing researcher must define the target population that will be sampled. it is not necessary to sample the entire target population to achieve results. The sampling plan attempts to identify at least two management level recipients at each bank branch office—one on the business side and one on the IT side. 2.5. PRIMARY DATA Primary data is the data. The target samples were Branch managers.include published articles. However. In this work. 2. and Assistant managers of various banks. The most feasible method of collecting primary data in this research was by questionnaires. 50 20 . Considering the type of data required for the research and depending upon the purpose of the study. the marketing researcher must design a sampling plan. data from resource centres from CRM vendor websites.5 SAMPLING PLAN After deciding on the research approach and instruments. Relations officers. Questionnaires were used to evaluate the CRM system on the grounds of end-user. industrial reports and external research agency reports. the type of the research adopted in this work is descriptive. The scope of the study is limited to the number of samples chosen for the survey. Branch operations managers. which has been gathered at first hand by the researcher or by someone especially for the specific research project.
The accuracy of data obtained is directly related to the knowledge base of the respondent and the involvement of the respondent with CRM system in that organization.7 RESEARCH INSTRUMENT The research instrument used to collect primary data in this work was Questionnaire.6 CONTACT METHODS Once the sampling plan has been determined. In this work personal meeting was the most versatile method.samples are chosen. the researcher must decide how the subject should be contacted. The sampling procedure adopted in this work was non probability convenient sampling 2. The respondents were met and asked to provide necessary information through the deployment of questionnaires. So this called for proper choice of respondents to ensure reliability and validity of the survey. 2. 21 .
Source: Icicle consultancy Fig 3. Similarly duplication of offerings in other service sectors also exhibits a very short time span. insurance and allied services sectors.1: Best-fit sectors for CRM practices and packages 22 . Studies have indicated that on average it takes a period of six weeks for any competitor to clone a product or service offering in the banking and insurance segment. where once again most of the global insurance giants are fighting to gain market share. With most of the global major telecommunication organizations present in this market. This is due to the fact that product and services offering within these segments gets cloned in a very short span of time. THE CRM MARKET PROFILE 3. Majority of this turnover being driven by the banking.1 THE INDIAN MARKET CHANGING DYNAMICS The Indian ‘Customer Relationship Management’ market is today estimated to be of the tune of INR 1000 million.3. Similar trends have been witnessed in the insurance sector. An evidence of this is seen in the current mobile telecommunication industry in India. financial. Traditionally it has been witnessed that these industry verticals have been on the forefront of technology adaptation. after the opening up of this sector. service offering duplication is taking place somewhat on a daily basis.
these sectors have been driven by necessity to embrace technology for enhancing their competitive advantage.To combat this competitive rivalry. Fig 3. 3.2 MARKET DRIVERS AND INHIBITORS 23 . Clarify. PeopleSoft and Talisma.2: Top-of-mind CRM Packages Source: Icicle consultancy Siebel is the CRM market leader in India. SAP has recently added modules to its CRM offerings and is focusing on the Manufacturing and pharmaceutical verticals. followed by Oracle.
respondents have put high cost of implementation as the main inhibitor. this could soon change. with software vendors bringing down prices and offering relatively affordable packages bundled with integration and consulting services.com. Salesnet. • In the Indian context. NetSuite and Siebel OnDemand.5 Crores (and more) are too expensive for most Indian firms. 24 .3 CRM LANDSCAPE 3. 3. High Global adoption is likely to drive the MNCs to adopt CRM first in line with Global implementations • While the first hurdle holding back the market is a lack of awareness. lack of customer orientation and poor existing IT infrastructure can prove major factors. • Another major inhibitor is that Indian firms lack the skills and strategic vision required to successfully implement CRM. However. The most notable of these is the ASP (application service provider) .1 THE ASP FACTOR While the CRM marketplace as a whole may be generating rather lacklustre results. Firms need to evolve their customer thinking by a significant extent before they accept CRM as the strategic imperative it is.3.class CRM systems: SalesForce.Fig 3. and internal systems and database management practices need to be upgraded before CRM software can be used to any effect. some classes of systems are generating very positive results. Complete and comprehensive CRM packages such as those of Siebel and Oracle costing in the range of Rs. 1 to 2.3: Market Drivers and Inhibitors Source: Icicle consultancy • A need for improved Customer Service shall be the main driver for Industry sectors that depend on the quality of their customer interactions to retain existing customers and win new ones.
individuals can get access to tools to help make them be more efficient and effective in terms of managing their time and activities. Maximizer. so many of the technology issues associated with implementing and managing the applications are lifted off the end user organization’s back. These types of applications would include programs like ACT. insurance. Onyx. The customer satisfaction and project success ratings from companies using ASPbased CRM solutions are much higher than the norm. PeopleSoft and SAP — garner most of the press. tracking projects. 3. These solutions get high marks not only for the functionality they provide. but also for their user interfaces. This is not only in terms of cost of the subscription services themselves.One of the strongest drivers for companies who are turning to ASP-based CRM is that the price of these applications is very attractive. 25 . In case of this systems . Goldmine.2 THE QUIET SUCCESS FACTOR Right behind ASP-based systems in terms of high-end user acceptance and satisfaction are the systems that can easily be installed on a PC for use by a single user or professionals working for a small-to-midsize business (SMB).3. keeping track of customer records. but also a lower total cost of ownership. Pivotal. Oracle. A second advantage results from the fact that ASP solution providers view CRM as not software. these class of systems continue to quietly grow a solid following in the marketplace. generating correspondence. in some cases. They host the applications for their customers. managing opportunities and the like just for a few hundred dollars. These types of capabilities are especially attractive to segments of the marketplace including real estate. SalesLogix. but a service. While the large enterprise CRM systems — Siebel. etc. automotive dealerships and retail businesses. which make it easy for professionals to find and share the key customer information they need to do their jobs.
sales and support people need. reinforce and enforce a structured way of selling. and many players are starting to work much more closely together to imbed sales process support into CRM tools. Leading this charge are firms including Salesnet. 3. 3. Let’s examine four of these. and cross-sell and up-sell.3.4 TRENDS IN CRM MARKET Several new innovations are emerging that also will contribute significantly to helping CRM achieve its true potential and to reenergize the marketplace. as they continue to buy well over one million copies of these software applications each month. effectively present benefits. And here there is a path to achieve those objectives. Every CEO would get excited about seeing their organization significantly improve their ability to target prospects. Focusing on collecting and aggregating information from external data sources that marketing. ShadeTree Technology.The value of these quiet CRM systems to SMB organizations is clearly being recognized by business professionals. 26 . Miller Heiman. Customer Centric Selling to ensure that CRM tools support. Factiva.1 THE CONTENT MANAGEMENT FACTOR Directly attacking the issue of populating and maintaining useful information in CRM systems is becoming the mission of a broadening base of solution providers. DataFlux.com.4. SalesForce.3 TECHNOLOGY AND PROCESS FACTOR Another interesting factor is how the combination of CRM technology and formal sales process can significantly improve the performance of sales teams. Sales Performance International. The CRM industry and the process industry also are recognizing this fact. 3. Siebel. are firms like OneSource/InfoUSA.
Salesnet in commercial leasing. Here you find companies including Siebel Systems and Dendrite International in the Pharmaceutical space. SalesForce. build their own semi-custom applications.com and Frontrange systems are examples of these types of vendors. gathering and making available the key information they need to do their jobs. Beyond just product data and customer contact data they will automatically receive knowledge on competitive intelligence. 3. the user adoption rates are expected to increase as the value of the information they can access increases. Savo and Purisma. in effect. 27 . changes in customer accounts and their marketplace and best sales and service practices. knowledge and insights from internal data sources (within a company) are firms like Involve Technology. A third approach is vendors delivering a technology framework that people with domain expertise can use to. and Pivotal in healthcare sciences and home building. Two examples are Salesnet’s OEM version of their platform and SugarCRM. The second approach is vendors delivering vertical industry-focused versions of their systems. Firstwave Systems in sports marketing. and automotive dealerships.Hoovers and Dun & Bradstreet. The market is witnessing three approaches to this issue. With this type of knowledge available easily through CRM applications.2 THE VERTICALIZATION FACTOR Another trend driving CRM adoption is the customization of applications to fit the needs of account teams in specific vertical industries. real estate. insurance. The first is vendors that are focusing on optimizing the customization of CRM applications so that end-user firms can modify the applications themselves to fit the uniqueness of their industry.4. The benefit of this collaboration will be that account teams will have key information imported into CRM applications automatically for them. In effect. CRM system will become a personal research assistant for account teams. Taking a similar approach to obtain data.
the value of CRM seems augmented. Up until recently. With anytime. anywhere access to key information. Mobile Computing is changing all that.4. their marketplace vocabulary and their information needs. designed to optimize customer meetings. because a number of companies still write them own CRM applications.The key advantage that verticalization will give account teams is that they get applications that are directly tied to their workflow processes. For those end-user firms there now will be an alternative to writing applications from scratch — enter the world of open source consortiums. The impact that open source programs could have on the CRM marketplace could be exciting. the two main things CRM helped account teams do was plan for a customer meetings and follow-up on one.3 THE MOBILE COMPUTING FACTOR With the advent of mobile computing. at the coffee shop. it’s clear that commercial CRM solution providers are not addressing everyone’s needs. Add to that the development of robust Tablet PC-based applications from solution providers such as MobilePoint. or even sitting across the desk from a customer.3 THE OPEN SOURCE CODE FACTOR The Open Source Code Factor is the newest and potentially most disruptive factor. 28 . But the applications were rarely used during a meeting. Dovario and Kenetic Data. 3. Because of this increased access to information. With the explosion of PDA and smart phone devices. professionals now can tap into a wealth of CRM-based information in their car. account teams can be more in favour of servicing the customers.4. 3. with the exception of presentations tools like PowerPoint. the value of CRM applications will increase in terms of helping account teams deal with their everyday tasks more efficiently. We are seeing a direct relationship being the degree to which a CRM application is tailored to a marketplace and the user adoption rate the company achieves.
This is just the beginning of the story. and the proliferation of the Internet are changing the competitive landscape of the retail banking industry. housing. Thus the customer base of banks has increased. or low cost alone could be the flame that rekindles excitement in this marketplace. Non-traditional competition. CRM IN BANKING 4. Today’ retail banking sector is characterized by following: Multiple products (deposits. market consolidation. This fresh wave of innovation. new technology. personal. such as Internet banking and ATMs. now customers can freely chose any bank for their transactions. and educational). credit cards. Thus. enhancements and bug fixes can occur much more rapidly than in the case of conventional development approaches. investments and securities) 29 .g. Due to globalization a new generation of private sector banks and many foreign banks have also entered the market and they have brought with them several useful and innovative products. fixed deposits. Due to forced competition. repurpose and modify source code for an application — the programs advance quickly. depository services. auto.The premise of open source is that when programmers leverage the work of othersreview. debit cards. and so has the choices of customers for selecting the banks. consumers largely selected their banks based on how convenient the location of bank’s branches was to their homes or offices. credit cards. And in keeping with the philosophy of the open source world. 4. With the Advent of new technologies in the business of bank. mortgages.1 RETAIL BANKING Retail banking refers to mass-market banking where individual customers typically use banks for services such as savings and current accounts. public sector banks are also becoming more technology savvy and customer oriented. Before Internet era. loans (e. insurance. investment advisory services (for high net worth individuals) etc. As members of a community work together. much of the software is available to users for free.
personalized services and increased accessibility. when to sell. Banks need to differentiate themselves by adding value-added service. Multiple channels of distribution (call centre. offerings and building long-term relationships with their customers through more customized products. 4. and corporate) Today. This may be explained better from two initiatives bank took in the past: 30 . which leads to increased customer loyalty. branch. how to sell and how to be different to increase profitability.1. the customers have many expectations from bank such as (i) Service at reduced cost (ii) Service “Anytime Anywhere” (iii) Personalized Service With increased number of banks. customers are easily switching banks whenever they find better services and products. Banks also need to find out the avenues for increased customer satisfaction. Internet and kiosk) Multiple customer groups (consumer. whom to sell. small business. Therefore banks are now stressing on retaining customers and increasing market share. 5% increase in customer retention can increase profitability by 35% in banking business.2 LONG TERM STRATEGIES FOR RETAIL BANKING The banks now need to find out what to sell. Banks also need to identify customers and products that would be most profitable and target customers with products that are most appropriate to their needs and serve the customers with greater cost efficiency. According to a research by Reichheld and Sasser in the Harvard Business Review. Banks are finding it tough to get new customers and more importantly retain existing customers. products and services and practically nil switching costs. enhanced value offerings.
Studies have now shown. The increase in customer satisfaction has translated to loyalty that resulted in higher customer retention and growing franchise value. across multiple touch points including the Internet. was a significant increase in that intangible called customer satisfaction. The value proposition. banks can identify the most lucrative customers and customer segments. 2. Based on these profiles. and 31 . banks need to retain existing customers with enhanced personalized services and products. believing that the Internet was a lowercost delivery channel and a way to increase sales. tailor products and services to meet their needs and sell these products to them. since customers would use them instead of a branch to transact business.2 CRM IN BANKING CRM primarily caters to all interactions with the customers or potential customers. Thus. income levels and other related criteria. Again customer satisfaction drives the value proposition. But what was discovered is that the financial impact of ATMs is a marginal increase in fee income substantially offset by the cost of significant increases in the number of customer transactions. however. bank branch. that the primary value of offering Internet banking services lies in the increased retention of highly valued customer segments. which best suits their needs and satisfies them the most. field organization and other distribution channels. call centre. CRM achieves this through Campaign Management by analyzing data from banks internal applications or by importing data from external applications to evaluate customer profitability and designing comprehensive customer profiles in terms of individual lifestyle preferences. Bankers invested in Internet banking.1. Earlier what drove many bankers to invest in ATMs was the promise of reduced branch cost. CRM can help banks in following ways: Campaign Management Banks need to identify customers. however. 4.
irrespective of whether the communication is from sales. CRM integrates various channels to deliver a host of services to customers. thus leading to enhanced customer satisfaction. This would make sales decision fast and consistent. 360-degree view of company This means whoever the bank speaks to. while aiding the functioning of the bank. (for e. news. finance or support. account. Lead and Opportunity Management 32 . pricing and competitive information. Removal of inconsistencies of data makes the client interaction processes smooth and efficient. Personalized sales home page CRM can provide a single view where Sales Mangers and agents can get all the most up-to-date information in one place. including opportunity. proposal templates and marketing collateral.execute targeted. the bank is aware of the interaction. Customer Information Consolidation Instead of customer information being stored in product centric silos. Marketing Encyclopaedia Central repository for products. sales presentations.g. and expense report information. as well as internal training material. with CRM the information is stored in a customer centric manner covering all the products of the bank. separate databases of savings account & credit card customers). personalized multi-channel marketing campaigns to reach these customers and maximize the lifetime value of those relationships.
uncover trends in customer behaviour. CRM with business intelligence allows banks to assess customer segments. It also links these customer touch points to an operations centre and connects the operations centre with the relevant internal and external business partners. An effective CRM solution supports all channels of customer interaction including telephone. the online portals. Fax. CRM with Business Intelligence Banks need to analyze the performance of customer relationships. the required follow-up and interaction with the prospects. Thus improved transparency leads to improved efficiency. e-mail. Contact Centre It enables customer service agent to provide uniform service across multiple channels such as phone. and face-to-face contacts with bank personnel.These enable organizations to effectively manage leads and opportunities and track the leads through deal closure. fax. Activity Management It helps managers to assign and track the activities of various members. which help them calculate the net present value (NPV) of a customer segment over a given period to derive customer lifetime value. Customers can be evaluated within a scoring framework. Enhanced productivity CRM can help in enhanced productivity of customers. Operational Inefficiency Removal CRM can help in Strategy Formulation to eliminate current operational inefficiencies. email. ATMs. and understand the true business value of their customers. partners and employees. Internet. wireless devices. Combining the behaviour key figure and frequency to monetary acquisition analysis with a 33 .
34 . Internet and ATM. At the same time there may be a few customers who still prefer the traditional methods of banking. information on credit balance. Customers can get account information. banks can efficiently allocate resources to the most profitable customers and reengineer the unprofitable ones. CRM implementations should have well defined objectives. issue instructions for drafts or even transact through these. Sales etc. CRM is Business Transformation: Too often banks have focused on the wrong areas of CRM. Banks need to be flexible enough to continue to extend the "personal touch" that such customers prefer. With such knowledge. and that this is reflected in actual marketing budget allocation. Have defined Objectives . such as ROI. This is of little use if the ongoing cost of servicing a customer outweigh the margin of profit that customer is generating. Unfortunately for these banks. Consider Complete Life Cycle Costs while budgeting . CRM is really about business transformation—changing the business from services-centric to customer-centric. turnover etc.marketing revenue quota can optimize acquisition costs and cut the number of inefficient activities. the software has often failed to deliver. finding it easier to buy CRM technology than to make the major internal changes necessary to really make CRM work for them.3 OVERCOMING HURDLES WHILE IMPLEMENTING CRM Customers may not want what they get: A CRM system apart from improving front office operations and customer servicing also helps in coping with many services that do not need manual intervention. Make changes internally before going for CRM: Many banks have spent a lot of money on CRM. These are serviced by channels like IVR. It is critical that banks have recognized and embraced the importance of the trend towards customer development.Measurements of profit are often constructed to embrace only the initial cost of sale.Many CRM implementations have been approved without examining aspects like profitability. 4.
cross-sell. Design programs Design innovative programs focusing on customer acquisition. retention. Disciplined work along four dimensions can significantly improve results from CRM initiatives: Customer Segmentation Do intensive data analysis and value-based segmentation to highlight the value of different customer segments and the underlying drivers of that value. which are using CRM products.4 CRM IMPLEMENTATION IN BANKS IN INDIA According to Nasscom report “Strategic Review 2004”. There are many banks such as ICICI Bank. HDFC Bank and Citibank. The retail banking industry is undergoing revolutionary change. The ability to mass customise the customer experience and refresh the value proposition is necessary to retain the right to do business with the 35 . loyalty. and make critical information available to relevant stakeholders. and customer service. Design Processes Design internal and external processes to support and sustain successful programs. Indian CRM market was estimated at US $ 14 million and is forecast to grow to US $ 26 million in 2005. Customer Relationship Management is an important weapon in this fight. Good Decisions based on Right Information The information from a CRM program can often guide better operational business decisions at many levels of the organization. perform in-depth analysis. There are many players and competition is tough.4. experience and industry best practices. based on customer insights. Gather customer information at a broader set of touch-points. Banking and financial services segment has a high growth potential and accounts for 22 percent of CRM license revenue.
and service attributes that drive overall customer satisfaction. the survey employs a methodology called “gap analysis. customers are asked to rate. For example.” For each factor being evaluated. the gap— 36 . on a scale of 0 (lowest) to 10 (highest). the importance of the factor to them or the expected level of system performance on that factor and their satisfaction with that factor. As the competitions increase. Consolidation and technology would become must for sustenance and growth.customer. while the second rating measures the customer’s satisfaction with CRM Systems’ performance on that factor. banks will require the robust CRM functionalities in order to manage their most valued asset – their customers 5.1 END-USER SATISFACTION MEASUREMENT METHODOLOGY: GAP ANALYSIS The end-user survey asks customers to rate their CRM Systems on specific business. The first rating measures how important the factor is to the customer in continuing doing business with the current CRM Systems provider. ease of using this product on a day-to-day basis and ease of system administration and system reliability” On questions where end-users are asked to provide a quantitative evaluation. the questionnaire asks customers to assess “Product effectiveness. training and technical support offered with the system. ANALYSIS AND INTERPRETATION 5. product functionality. Product. and Loyalty. The difference between the two ratings—that is. success. The pressure will be on banks to integrate data from every channel and know what customers say so that the banks deliver what they want.
• Gaps greater than 3.is calculated by subtracting the Actual satisfaction rating from the Expected satisfaction rating In Gap analysis for software products. • Gaps of less than 1 indicate world-class performance.4 8.6 8.6 7.1: Desired End – User rating of CRM systems on various factors on a scale of 1 to 10 37 . the following correlations are used to draw conclusions on the satisfaction levels of the end-users and customers. 5.4 8. • Gaps of 2 to 3 indicate vulnerability (opportunity).8 7. • Gaps of 1 to 2 are in balance and are targets for the industry.4 8.2 END – USER RATING OF CRM SYSTEMS ON VARIOUS FACTORS 9.0 indicate a serious vulnerability (or opportunity).04 PRODUCT EFFECTIVENESS TRAINING AND TECH SUPPORT 8.2 9 8.4 9 9. ADMINISTRATION EASE OF DAY TO DAY USE SOFTWARE RELIABILITY Desired End-User satisfaction level Ratings Fig 5.28 8 PRODUCT FUNCTIONALITY EASE OF SYS.8 8.2 8 7.
9 8.5 8 7.5 7 6.5 6 5.5 5 Actual End-User satisfaction level Ratings 7.08 8.08 7.24 6.7 7.56 7
PRODUCT EFFECTIVENESS TRAINING AND TECH SUPPORT PRODUCT FUNCTIONALITY EASE OF SYS. ADMINISTRATION EASE OF DAY TO DAY USE SOFTWARE RELIABILITY
Fig 5.2: Actual End–user satisfaction rating of CRM systems on various factors on a scale of 1 to 10
Fig 5.3: GAP scores of CRM systems on various factors The respondents were asked to rate the expected system performance and the satisfaction level of the existing CRM system on the following factors on a scale of 0 (lowest) to 10 (highest).
5.2.1 PRODUCT EFFECTIVENESS Product effectiveness gives a rating of the satisfaction of the end-user on the overall performance of the CRM system on grounds of installation, configuration, functionality and ease of use. 5.2.2 TRAINING ANDTECHNICAL SUPPORT Technical Support measures end-user satisfaction with product knowledge as well as the timeliness and quality of response provided by Technical Support team and Training measures customers’ satisfaction with the effectiveness of CRM technical training and End User Education services.
5.2.3 PRODUCT FUNCTIONALITY Product functionality measures how well the CRM system’s functionality meets the business needs. It is a measure of the fit between the software and its actual functional requirement. 5.2.4 EASE OF SYSTEM ADMINISTRATION Ease of system administration gives a rating of the satisfaction of the end-user on how easy is it to administer the CRM system. The factor deals with the setup and maintenance of computers and networks. The functions of system administration extends to the responsibility of running the system, or running some aspect of it. 5.2.5 EASE OF DAY TO DAY USE Ease of day-to-day use gives an end-user rating of how easy is to use the CRM system for day-to-day business operations. In day-to-day business complex and high-volume data entry, inquiries, reporting and querying is done on a routine basis. This factor measures how easy it is for the end-users to operate the system on the above grounds.
5.2.6 SOFTWARE RELIABILITY This factor is a direct measurement of the satisfaction level of end-users on the reliability of the CRM system. Software reliability is the ability of a program to perform its required functions accurately and reproducibly under stated conditions for a specified period of time. It is the probability that software will not cause the failure of a system for a specified time under specified conditions. In simple words, Software Reliability is the probability of failure-free software operation
5.3 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED CUSTOMER SATISFACTION
Particulars No of 10 - 20 % 20 - 30 % 30 - 50 % ABOVE 50%
10 14 20 6 Respondents Table 5.1: Responses for impact of CRM systems on increased Customer satisfaction
10 - 20 %
20 - 30 %
30 - 50 %
20 % ABOVE 20% 41 . 20 – 30 %. increase customer loyalty.4 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED REVENUE Particulars No of 2-5% 5 . 5. and best of all deliver customer delight.20 % ABOVE 20% 0 10 18 22 Respondents Table 5.10 % 10 . they ensure repeat purchases.10 % 10 .Fig 5.4: Response Statistics for impact of CRM systems on increased Customer satisfaction INTERPRETATION The questionnaire had four ranges ranging from 10 – 20 %. 30 – 50% and above 50%. improve customer relationships. The result were distributed with 40% of the sample surveyed quoting that the deployment of CRM system in their organization had increased customer satisfaction by 30 – 50%. The technology-driven improvements in customer service contribute to long-term customer satisfaction.2: Responses for impact of CRM systems on increased revenue 0% 20% 44% 36% 2-5% 5 .
Though around 36% of the respondents said their CRM system increased the revenues by 10-20 %.20 % 20 .30 % ABOVE 30% 2 16 22 10 Respondents Table 5. 10 – 20 %. 5 – 10 %.10 % 10 . above 20 % to quote their responses on the impact of CRM systems on increased revenue to the organisation.Fig 5. 5.3: Responses for impact of CRM systems on increased User productivity 4% 20% 32% 44% 5 .5 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED USER PRODUCTIVITY Particulars No of 5 . long lasting relationships with customers can be build and strategies can be framed to utilise the customer’s life time value. the Major portion of the responses agreed that their CRM system contributed to the increase of above 20% of their revenues.30 % ABOVE 30% 42 .5: Response Statistics for impact of CRM systems on increased revenue INTERPRETATION The samples were given four categories: 2 – 5 %. With a proper CRM system in place.20 % 20 .10 % 10 .
Helps Enforce Procedures and Delivers Enhancements to Optimize Employee Productivity 5. 20 – 30 % and above 30 % regarding the impact of CRM systems on increased user productivity. A clear majority of 44 percent of the samples who were surveyed have experienced 20 – 30 % improvement in user productivity.10 % 10 .Fig 5.4: Responses for impact of CRM systems on decreased Operating costs 20% 0% 28% 52% > 2% 2-5% 5 . CRM Technology Automates Business Processes at the Desktop.20 % 43 . 10 -20 %.6 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON DECREASED OPERATING COSTS Particulars No of > 2% 2-5% 5 .10 % 10 .6: Response Statistics for impact of CRM systems on increased User productivity INTERPRETATION The target samples were given four choices: 5 – 10%.20 % 0 14 26 10 Respondents Table 5.
10 MONTHS < 18 MONTHS Fig 5.10 MONTHS 10 .18 MONTHS < 18 MONTHS > 6 MONTHS 0 15 24 11 Respondents Table 5.7: Response Statistics for impact of CRM systems on decreased Operating costs INTERPRETATION The implication of the question is to gain knowledge on the impact of CRM systems on decreasing the operating costs. It helps to cut down the operating costs.5: Responses for time required to realise a return on investment 22% 48% 0% 30% > 6 MONTHS 10 .8: Response Statistics for time required to realise a return on investment 44 .18 MONTHS 6 . Everyone in the organisation benefits with CRM in place.Fig 5. The samples responded with a 52 % majority experiencing 5 – 10 % decrease in operating costs.7 TIME REQUIRED TO REALISE A RETURN ON INVESTMENT Particulars No of 6 . An integrated CRM solution gives employees a centralized place to store data and access information. CRM makes business processes transparent. since they are aware of the entire business process. 5.
30 % ABOVE 30 % Fig 5. About 22% of the samples were more optimistic and said their organization needed 6 – 10 months to realize a Return on Investment.20 % 20 . 48 % of the sample surveyed agreed that their organization needed 10 – 18 months to breakeven and realize a return on investment. if not quick. Many companies have found ROI as a critical factor driving the evaluation phase of implementing a CRM system. ROI. CRM solutions need to show a measurable.8 IMPACT OF DEPLOYMENT OF CRM SYSTEMS ON INCREASED CUSTOMER RETENTION Particulars No of > 10 % 10 . 5. 6 – 10 months.6: Responses for impact of CRM systems on increased Customer retention 0% 30% 20% 50% > 10 % 10 .20 % 20 .30 % ABOVE 30 % 0 10 25 15 Respondents Table 5. 10 – 18 months and above 18 months. The questionnaire had four ranges ranging from less than 6 months.9: Response Statistics for impact of CRM systems on increased Customer retention 45 . Because of the executive involvement in decision making.INTERPRETATION Return on investment is an important impact measure of any technology investment.
INTERPRETATION In today's extremely aggressive and competitive marketplace.9 CRM MARKET SHARE IN BANKING SECTOR Particulars No of Respondents 17 13 10 8 2 ORACLE CRM FINACLE FLEXCUBE CRM CRM SIEBEL CRM OTHERS Table 5.10: CRM Market share in banking sector 46 . About 30% of the sample had said that their organizations had improved customer retentions by more than 30 %. A majority 50 % of the sample surveyed agreed that their organization had 20 – 30 % increased customer retentions due to the deployment of CRM systems. commercial organisations need new and radically different strategies to attract and then retain quality customers who have good lifetime profitability potential. CRM systems again offers customer retention strategies to retain and utilize the value of the customer.7: Responses for what CRM system was in use in the organisation 4% OTHERS SIEBEL CRM FLEXCUBE CRM FINACLE CRM ORACLE CRM 0 5 10 15 20 25 30 Percentage Market share (values in %) 35 16% 20% 26% 34% Fig 5. 5.
Oracle CRM with 34 % of the respondents agreeing that their organisations employ it.8: Responses for Respondent involvement with CRM systems 60 40 20 20% 42% 32% 4% 0 Percentage Respondent involvement with CRM % KEY PERSON SOMEWHAT INVOLVED CLOSELY INVOLVED NOT VERY INVOLVED Fig 5. The various CRM software systems used by different banks are Oracle CRM. The Indian CRM market share when focussed on banking sector slightly varies to the overall market metrics.10 RESPONDENT INVOLVEMENT WITH CRM SYSTEMS Particulars No of CLOSELY INVOLVED SOMEWHAT INVOLVED NOT VERY INVOLVED KEY PERSON 10 21 16 2 Respondents Table 5.INTERPRETATION The implication of the question is to find out the CRM system used by the Bank for its operations.11: Respondent involvement with CRM systems INTERPRETATION 47 . projects to be the preferred CRM system over other systems. 5. Flexcube CRM and Seibel CRM. The respondents have rated I-Flex’s flexcube CRM and Seibel CRM with 20 and 16 percent of the market share in banking sector. Finacle CRM. Infosys’s Finacle CRM (F-CRM) is also used as a part of operations and the bank’s CRM requirements.
The above-mentioned factors are a direct measurement of the quality of the sample considered. 42 percent of the respondents chosen are closely involved with CRM.The implication of the question is to find out the validity and reliability of the research. 6.56 7 Table 6.04 on a scale of 10. 32 percent of the respondents chosen are somewhat involved with the CRM system and just about 4 percent of the respondents are not so involved with the CRM system. The end-users expect a very good product effectiveness to gain satisfaction from the CRM system.28 ACTUAL SATISFACTION LEVEL RATINGS 8. 20 percent of the respondents chosen are key persons.08 7. 48 . SUMMARY OF FINDINGS FACTORS ON WHICH CRM SYSTEM WAS RATED DESIRED SATISFACTION LEVEL PRODUCT EFFECTIVENESS TRAINING AND TECHNICAL SUPPORT PRODUCT FUNCTIONALITY EASE OF SYSTEM ADMINISTRATION EASE OF DAY TO DAY USE SOFTWARE RELIABILITY RATINGS 9 8.08 7.04 8.4 8. The respondents have rated ‘Ease of day to day use’ of the CRM system as the most important factor driving satisfaction with an overall rating of 9. The quality of the sample considered for research is found out by knowing the respondent’s involvement with CRM systems in the organisation.4 8 9. The rating for product effectiveness was 9 on the same scale.24 6.1: End-User rating of CRM system The survey sheds light on the factor considered important by the end-users of CRM in banking sector.7 7.
The desired satisfaction level on the factors software reliability and ease of system administration were given a rating of 8.7 on a scale of 10 to ‘Ease of System Administration’ and are least satisfied with the CRM system with regard to that factor and in comparison to other factors. End-users have given the lowest rating of 6.32 1. The factor on which the end-users are most satisfied with their current CRM system was the ‘Product Effectiveness’ which has a overall rating of 8.16 1. FACTORS ON WHICH CRM SYSTEM WAS RATED PRODUCT EFFECTIVENESS TRAINING AND TECHNICAL SUPPORT PRODUCT FUNCTIONALITY EASE OF SYSTEM ADMINISTRATION EASE OF DAY TO DAY USE SOFTWARE RELIABILITY Table 6.4 each on the same scale.48 1.92 1.28 The Gap analysis results details on the difference in the desired and the actual CRM systems on the various factors used and discussed earlier in this work. The factors training and technical support and product functionality trail close with a rating of 8. The satisfaction scores given by the respondents for the current CRM system also draw certain implications.2: Gap Scores for various factors GAP SCORES 0.08 on a scale of 10.3 1.28 and 8 on the above scale. Empirical analysis of gap data for user satisfaction of CRM system by a research organisation has shown the following correlations: GAP SCORES <1 1–2 2–3 >3 49 CORRELATION World-Class Meets/Exceeds industrial standard Vulnerability Serious Vulnerability .
it has been rated as the highest gap by the end-users and the CRM vendors must concentrate on this factor to move into the world-class category. It relates that the CRM product used by various banks meets or just exceeds the industry standard.10 percent reduction in operating costs Return on investment in 10 .48 for the factor ‘Ease of day to day use’ falls under the category of meeting industrial standard. With reference to the above table.30 percent increase in customer retention Above 20 percent increase in revenue 5 . the product has a world-class performance in that factor. The survey asks recipients to provide data about the impact of their CRM Applications deployment on six different metrics: Percentage change in user productivity Percentage change in customer satisfaction Percentage change in customer retention Percentage change in revenue Percentage change in operating costs Return on investment (measured in months until ROI) The majority of the CRM end-users reported the following results as a result of using their CRM Applications: 20 .92 exists.18 months 50 .30 percent increase in employee productivity 30 . Though a gap of 1.3: Correlations for GAP scores The least gap is for the ‘product effectiveness’.50 percent increase in customer satisfaction 20 .Table 6. All other gaps exist in the range of 1 – 2. A gap of 0.
The CRM vendors have a opportunity to improve the system on the attribute to gain a competitive advantage in the market. a significant gap does exist with reference to this factor and the CRM vendors should minimize this existing gap to gain a competitive edge. The end-users have rated ‘Ease of day to day use’ as the top priority factor driving satisfaction.RECOMMEDATIONS TO CRM VENDORS The CRM vendors must organise an end-user or customer satisfaction survey semi-annually or quarterly to figure out the actual need of individual customers. TO CRM BUYERS 51 . Training and further technical support can make issues a lot easier for the customers. As individual customization is required to bring in the CRM product – Business process fit. hence there is a state of uncertainty with the end-users. Training and technical support is a major component to be taken care of. Training the end-user to use the system is the first phase in the interaction of the system and the end-user. The requirements must be clearly communicated initially and further satisfaction surveys should be followed up. The concept of Mass Marketing is not synchronous with CRM as a product. From the research work.
. The CRM implementation should be driven by motive of transforming the business to a customer . internal changes within the organisation which are required to really make CRM work should be adopted. ROI etc. A product evaluation should be done before implementing CRM software. The organisation should be ready for CRM before its implementation.centric environment and not for a technology – centric environment. The buyer should have proper well defined objectives like sales. i. 52 . The extent to which the CRM product’s functionality fits the desired functionality should be analysed.e. The ease of integrating the CRM system with the other existing systems should be considered as one of key criteria in the evaluation. before CRM implementation.
Customer relationship management is do-able. etc and start linking them to the marketing programs. But these are mainly based on some loyalty programs and investments in technology for enhancing the capability of databases. Successful firms take a long-term strategic view of customer relationship management. Managers should ensure that while investing in databases. which help them sustain these initiatives. human resources and relationship marketing programs. technology. companies have wonderful opportunity to fully utilize the power of a CRM Software Solutions. usage behaviour.CONCLUSION Relationship marketing is emerging as a new area of focus for service firms in India. their buying patterns. referrals. integrate technology through customer oriented approaches. Presently in India. motivate employees to perform to their full potential through empowerment are prerequisites for firms to successfully utilize their customer knowledge to enhance relationships with their customers. Measurement metrics get developed over a period of time when one s tarts collecting information about customers. It is unrealistic to implement all the features and integration possibilities all at once. It cannot be solely managed through periodic programs. These milestones become benchmarks against which future programs get evaluated. attempts should also be made to develop milestones. A holistic approach which leads firms to develop customer centric process. If a phased approach is adopted in a planned manner with cross functional teams 53 .
and execution of its customer satisfaction program. 54 . It leads to the improvement of the CRM system which the vendors offer and may even result in genesis of new opportunities. The desired performance of the CRM systems has to be analysed by the CRM vendors by post implementation research and surveys. and action plans to follow up on the results.implementing the customized solutions under the co-leadership of both the IT and strategists. These customer and end-user satisfaction surveys figure and analyse the performance of the CRM system as required by the end-user. comprehensive reviews of the survey data. The vendors have an important role to accomplish even after the implementation. It leads to the improvement of the CRM system which the vendors offer and may even effect in genesis of new opportunities. These practices include regular surveys of its customer base. management. it will obtain the appropriate approvals at each stage and organization will have a successful CRM system to compete globally. The CRM vendors should apply best practices in the design.
Eleventh Edition.seibel. Business Research Methods. Donald R. Pamela S. WEBSITES www.com www.insightexec.destinationcrm.com 55 . Tata McGraw Hill.com www. Cooper.com/financialservices www. Marketing Management .mysap. Schindler.crmcommunity.BIBLIOGRAPHY BOOKS Philip Kotler.com www.com www.filenet.crm-daily.crmguru.com www.com www. Pearson Education.
functionality and ease of use? Expected System Performance on this factor 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 2.6) 1. I assure you that the information provided will be kept confidential and will be used only for the above said purpose. Rate the expected system performance and the satisfaction level of the existing CRM system on the following factors on a scale of 0 (lowest) to 10 (highest). PRODUCT EFFECTIVENESS: . configuration. I am doing a dissertation entitled “A study on End-user Satisfaction of CRM systems in banking sector”. (For questions from 1 . I am a student of Alliance Business Academy doing my Masters in Business Administration. technical training provided by the vendor and the timeliness and quality of response provided by technical support? Expected System Performance on this factor: 56 .Where do rate the overall performance of the CRM system on grounds of installation.ANNEXURE Questionnaire Dear Sir/Madam. TRAINING ANDTECHNICAL SUPPORT: . I request you to kindly spare a few minutes of your valuable time in filling this questionnaire which will help me in completing the dissertation. As a part of the curriculum.Where do rate the effectiveness of the end-user educational services.
Expected System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 5. PRODUCT FUNCTIONALITY: . Expected System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 4. 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 3.Rate how well the CRM system’s functionality meets the business needs.Rate how easy is it to administer the CRM system.Rate how easy is to use the CRM system for day to day business operations. EASE OF SYSTEM ADMINISTRATION: . Expected System Performance on this factor: 57 . EASE OF DAY TO DAY USE: .
To what level do you customers feel more satisfied on deployment of CRM system? 10 – 20 % 20 – 30% % 30 – 50% Above 50 % 8. SOFTWARE RELIABILITY: . 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 6. To what level the deployment of CRM system contribute towards increased revenue? 2–5% 5 – 10 % 10 – 20% Above 20 % 58 .Where do you rate the reliability of your CRM system? Expected System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) Actual System Performance on this factor: 0 (Lowest) 1 2 3 4 5 6 7 8 9 10 (Highest) 7.
What amount of time was required to realize a return on investment for its CRM deployment? Less than 6 Months 6 – 10 Months 10 – 18 Months Above 18 Months 12. To what extent the CRM system has enhanced and improved the retention of customers? Less than 10 % 10 – 20 % 20 – 30% Above 30 % 13.20 % 11. Which CRM system are you using for business operations? Respondent Profile: Name: Company Name: 59 . To what extent the deployment of CRM systems contribute to increasing user productivity? 5 –10 % 10 – 20 % 20 – 30 % Above 30 % 10.9. To what extent the deployment of CRM system contributes to decreasing the operating costs? Less than 2% 2–5% 5 – 10% 10 .
. 60 . . Thank you for your valuable time .Job Designation: Involvement with CRM system: Key Person Closely Involved Somewhat Involved Not very involved . . .
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