1

Content Pg no.
THE HISTORY OF CRM 3
INTRODUCTION 6
CUSTOMER RELATIONSHIP MANAGEMENT 7
CRM & BANKS
10
NEED OF CRM IN BANKS 12
BENEFITS OF CRM
17
CHALLENGES FACED BY BANKS IN SUCCESSFUL
IMPLEMENTATION OF CRM
22
CRM PRINCIPLES
23
TYPES OF CUSTOMER RELATIONSHIP MANAGEMENT TOOLS
27
EFFECTIVE CRM IMPLEMENTATION
29
TRENDS IN CRM IN BANKS
30
FINDINGS
32
CRM AT ICICI BANK
34
SUGGESTION
38
CONCLUSION
40
BIBILOGRAPHY
41



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ABSTRACT
The prime objective of the research work is to develop a framework for Customer Relationship
Management (CRM), applicable to Indian retail banks and to analyze the influence of service
quality on customer behavior with respective to retail banks. The results of the research study
reveal that there appears to be lack of awareness with the bank employees as well as adoption of
CRM packages available in the market. It is suggested that the successful implementation of
CRM package can be achieved only if the bank can create the right environment, culture and
attitude of the employee aiming to serve the customers in the best possible manner.
Customers are the focal point in the development of successful marketing strategy. Marketing
strategies both influence and are influenced by consumers affect and cognition, behaviour and
environment. In the banking field a unique Relationship exists between the customers and the
bank. But because of various reasons and apprehensions like financial burdens, risk of failure,
marketing inertia etc., many banks are still following the traditional ways of marketing and only
few banks are making attempts to adapt CRM. It is with this background, the researcher has
made a modest attempt towards the idea that CRM can be adapted uniformly in the banking
industry for betterment of Banking Services. The lack of understanding on Customer
Relationship Management (CRM) is always a concern among the service providers especially
banks. Banks have their own way of managing their relationships with the customers.






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THE HISTORY OF CRM
Customer Relationship Management (CRM) is one of those magnificent concepts that swept the
business world in the 1990s with the promise of forever changing the way businesses small and
large interacted with their customer bases. In the short term, however, it proved to be an
unwieldy process that was better in theory than in practice for a variety of reasons. First among
these was that it was simply so difficult and expensive to track and keep the high volume of
records needed accurately and constantly update them.
While Customer Relationship Management (CRM) can be traced back to the 1980's, the actual
term did not come about until the 1990's. One reason that drove the CRM software boom in the
90's was the explosion of technology. As advancements in different database features came
about, it paved the way for early CRM adopters to truly improve the CRM software and make it
more effective for customers. Some of the earliest companies to really embrace this and invest in
the use of CRM software were the banking and telecommunications industry, as so much of their
business was customer-related. For them, this was the easiest way to do it. This eventually led to
other industries of all shapes and sizes, to get involved in CRM software.
In the last several years, however, newer software systems and advanced tracking features have
vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the
price of newer, more customizable Internet solutions have hit the marketplace; competition has
driven the prices down so that even relatively small businesses are reaping the benefits of some
custom CRM programs.
In the beginning
The 1980s saw the emergence of database marketing, which was simply a catch phrase to define
the practice of setting up customer service groups to speak individually to all of a companys
customers.
In the case of larger, key clients it was a valuable tool for keeping the lines of communication
open and tailoring service to the clients needs. In the case of smaller clients, however, it tended
to provide repetitive, survey-like information that cluttered databases and didnt provide much


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insight. As companies began tracking database information, they realized that the bare bones
were all that was needed in most cases: what they buy regularly, what they spend, what they do.
Advances in the 1990s
In the 1990s companies began to improve on Customer Relationship Management by making it
more of a two-way street. Instead of simply gathering data for their own use, they began giving
back to their customers not only in terms of the obvious goal of improved customer service, but
in incentives, gifts and other perks for customer loyalty.
This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards
and a host of other resources that are based on CRM tracking of customer activity and spending
patterns. CRM was now being used as a way to increase sales passively as well as through active
improvement of customer service.
True CRM comes of age
Real Customer Relationship Management as its thought of today really began in earnest in the
early years of this century. As software companies began releasing newer, more advanced
solutions that were customizable across industries, it became feasible to really use the
information in a dynamic way.
Instead of feeding information into a static database for future reference, CRM became a way to
continuously update understanding of customer needs and behavior. Branching of information,
sub-folders, and custom tailored features enabled companies to break down information into
smaller subsets so that they could evaluate not only concrete statistics, but information on the
motivation and reactions of customers.
The Internet provided a huge boon to the development of these huge databases by enabling
offsite information storage. Where before companies had difficulty supporting the enormous
amounts of information, the Internet provided new possibilities and CRM took off as providers
began moving toward Internet solutions.



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With the increased fluidity of these programs came a less rigid relationship between sales,
customer service and marketing. CRM enabled the development of new strategies for more
cooperative work between these different divisions through shared information and
understanding, leading to increased customer satisfaction from order to end product.
Today, CRM is still utilized most frequently by companies that rely heavily on two distinct
features: customer service or technology. The three sectors of business that rely most heavily on
CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations
and the telecommunications industry.
The financial services industry in particular tracks the level of client satisfaction and what
customers are looking for in terms of changes and personalized features. They also track changes
in investment habits and spending patterns as the economy shifts. Software specific to the
industry can give financial service providers truly impressive feedback in these areas.





1980s
Database marketing emerges
Database helped larger organizations rather than small who only got survey type
info
1990s
CRM appears as a two-way communication device
CRM leads to programs such as frequent flyer miles and bonus points on credit
cards
2000s
Internet has helped expand from stagnant database and allows off-site information
storage
Used most frequently in financial services, high tech corporations and the
telecommunications industry


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INTRODUCTION

The traditional mode of marketing mainly focused on
segmenting and acquiring new customers by using tools and
techniques developed for mass marketing. In the present
competitive era, this proves vain. Today there are different
approaches to business such as relationship marketing,
customer retention and cross-selling leading to customer
extension, which is a far cry from the traditional segmentation model. The relative and marked
emergence of CRM as a business strategy has radically transformed the way organizations
operate. The shift in business focus from transactional to relationship marketing keeps the
customer at the Centre of all business activities. Organizations are trying to restructure their
processes to meet the needs of their strategically significant customers. The critical driver of
such a dramatic shift towards customer orientation is the realization that customers are business
assets and when managed effectively they can derive continuous and sustainable economic value
for an organization over their lifetime. The dynamics of the banking ecosystem have changed the
business format of retail banks both in relationship management and in streamlining their
operations.
Relationship marketing or customer relationship management has been emerging as a core
marketing activity for businesses in the fiercely competitive environment. On an average,
companies spend six times more to acquire new customers than to retain them. Therefore, many
firms are now paying more attention to their relationships with existing customers to retain them
and to increase their share of customer purchases. In order to improve the relations with the
customers, todays Retail Banking comprehensively concentrates on the quality of the products
and the services offered to the customer, as it is the basic foundation for maintaining and
developing long-term relations with the customer. Offering quality products and services is not
only essential to develop long-term customer relations, but is also essential to improve marketing
productivity and long run profits and growth. In sum, managing customers today has turned into


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a well formulated and well-studied science and art known as Customer Relationship
Management (or) CRM.

CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)

Definition According to Business Dictionary
A management philosophy according to which a companys goals can be best achieved through
identification and satisfaction of the customers' stated and unstated needs and wants.

Definition According to Business Dictionary Investopedia
The principles, practices, and guidelines that an organization follows when interacting with its
customers. From the organization's point of view, this entire relationship not only encompasses
the direct interaction aspect, such as sales and/or service related processes, but also in the
forecasting and analysis of customer trends and behaviors, which ultimately serve to enhance the
customer's overall experience.
MEANING OF CRM
Customer Relationship Management is the establishment, development, maintenance and
optimization of long-term mutually valuable relationships between consumers and the
organizations. Successful customer relationship management focuses on understanding the needs
and desires of the customers and is achieved by placing these needs at the heart of the business
by integrating them with the organization's strategy, people, technology and business processes.
At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved
in the business process. It is about creating a sustainable competitive advantage by being the best


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at understanding, communicating, and delivering, and developing existing customer relationships
in addition to creating and keeping new customers.

Customer relationship management helps in profiling prospects, understanding their needs, and
in building relationships with them by providing the most suitable products and enhanced
customer service. It integrates back and front office systems to create a database of customer
contacts, purchases, and technical support, among other things. This database helps the company
in presenting a unified face to its customers, and improves the quality of the relationship, while
enabling customers to manage some information on their own.

Traditional Marketing CRM
Goal: Expand customer base,
increase market share by mass
marketing
Goal: Establish a profitable, long-term, one-to-one
relationship with customers; understanding their
needs, preferences, expectations
Product oriented view Customer oriented view
Mass marketing / mass
production
Mass customization, one-to-one marketing
Standardization of customer
needs
Customer-supplier relationship
Transactional relationship Relational approach


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Customer relationship management is one of the strategies to manage customer as it focuses on
understanding customers as individuals instead of as part of a group. Managing customer
relationships is important and valuable to the business. The effective relationship between
customers and banks depends on the understanding of the different needs of customers at
different stages. The ability of banks to respond towards the customers needs make the
customers feel like a valuable individual rather than just part of a large number of customers.
CRM manages the relationships between a firm and its customers. Managing customer
relationships requires managing customer knowledge. CRM and knowledge management are
directed towards improving and continuously delivering good services to customers. To
understand more in customer relationship management, we first need to understand three
components which are customer, relationship and their management. More often, managers
always make mistakes by seeing customers satisfaction from their eye not from customers eye
CRM & BANKS
Today, customers have more power in deciding their bank of choice. Consequently, keeping
existing customers, as well as attracting new ones, is a critical concern for banks. Customer
satisfaction is an important variable in evaluation and control in a bank marketing management.
Poor customer satisfaction will lead to a decline in customer loyalty, and given the extended
offerings from the competitors, customers can easily switch banks. Banks need to leverage
effectively on their customer relationships and make better use of customer information across
the institution.
Competition in the financial services industry has intensified in recent years, owing to events
such as technology changes and financial industry deregulation. Conventional banking
distribution has been gradually supplemented by the emerging use of electronic banking. Many
bank customers prefer using ATMs or a website rather than visiting a branch, while technology
has also reduced barriers to entry for new customers.


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CRM IN BANKING SECTOR
Banking sector is a customer-oriented service where the customer is the KEY focus. Research is
needed in such sector to understand customers need and attitude so as to build a long
relationship with them. Customer Relationship Management includes all the marketing activities,
which are designed to establish, develop, maintain, and sustain a successful relationship with the
target customers. CRM identifies the present and future markets, selects the markets to serve and
identifies the progress of existing and new services.
Thus, CRM is a managerial philosophy that seeks to build long term relationships with
customers. CRM can be defined as the development and maintenance of mutually beneficial
long-term relationships with strategically significant customers It is the establishment,
development, maintenance and optimization of long term mutually valuable relationships
between consumers and the organizations. Successful customer relationship management focuses
on understanding the needs and desires of the customers and is achieved by placing these needs
at the heart of the business by integrating them with the organizations strategy, people,
technology and business processes.
Over the last few decades, technical evolution has highly affected the banking industry. For more
than 200 years, banks were using branch based operations. Since the 1980s, things have been
really changing with the advent of multiple technologies and applications. Different
organizations got affected from this revolution; the banking industry is one of it .In this
technology revolution, technology based remote access delivery channels and payment systems
surfaced
ATM displaced cashier tellers, telephone represented by call centers replaced the bank branch,
internet replaced the mail, credit cards and electronic cash replaced traditional cash transactions,
and interactive television will replace face-to-face transactions. In recent years, banks have
moved towards marketing orientation and the adoption of relationship banking principles. The
key motivators for embracing marketing principles were the competitive pressure that arose from
the deregulation of the financial services market particularly in India.
This essentially exposed clearing banks and the retail banking market to increased competition
and led to a blurring of boundaries in many traditional product markets. The bank would need a


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complete view of its customers across the various systems that contain their data. If the bank
could track customer behaviour, executives can have a better understanding, a predicative future
behaviour and customer preferences. The data and applications can help the bank to manage its
customer relationship to continue to grow and evolve .Most sectors of the financial services
industry are trying to use CRM techniques to achieve a variety of outcomes. In the area of
strategy, they are trying to
Create consumer-centric culture and organization
Secure customer relationships;
Maximize customer profitability;
Integrate communications and supplier customer interactions across channels;
Identify sales prospects and opportunities;
Support cross and up-selling initiatives;
Manage customer value by developing propositions aimed at different customer
segments;
Support channel management, pricing and migration.

CRM is a sound business strategy to identify the banks most profitable customers and prospects,
and devotes time and attention to expanding account relationship with those customers through
individualized marketing, reprising, discretionary decision making, and customized service
through the various sales channels that the bank uses. Any financial institution seeking to adopt a
customer relationship model should consider six key business requirements they are:
Create a customer-focused organisation and infrastructure.
Gaining accurate picture of customer categories.
Assess the lifetime value of customers.
Maximise the profitability of each customer relationship.
Understand how to attract and keep the best customers.
Maximise rate of return on marketing campaigns.



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CRM is developing into a major element of corporate strategy for many organisations .A
greater focus on CRM is the only way the banking industry can protect its market share and
boost growth. With intensifying competition, declining market share, deregulations, smarter and
more demanding customers, there is competition between the banks to attain a competitive
advantage over one another or for sustaining the survival in competition.
In India, the banking sector has been operating in a very stable environment from last
thirty -forty years. In current scenario of banking sector, the falling of interest rates and tough
competition between these players had made Indian bankers to realise that the purpose of their
business is to create and retain a customer and to see that the entire business process is consistent
with an integrated effort to discover, retain and satisfy customer needs. But the success of' CRM
Strategy depends upon its ability to understand the needs of the customer and to integrate them
with the organisation's strategy, people, technology and business process. Financial services are
in a structural change whereby competition and customer demands are increasing.
NEED OF CRM IN BANKS
Bank merely an organization it accepts deposits and lends money to the needy persons,
but banking is the process associated with the activities of banks. It includes issuance of cheque
and cards, monthly statements, timely announcement of new services, helping the customers to
avail online and mobile banking etc. Huge growth of customer relationship management is
predicted in the banking sector over the next few years.
Banks are aiming to increase customer profitability with any customer retention. This
paper deals with the role of CRM in banking sector and the need for it is to increase customer
value by using some analytical methods in CRM applications. It is a sound business strategy to
identify the banks most profitable customers and prospects, and devotes time and attention to
expanding account relationships with those customers through individualized marketing, pricing,
discretionary decision making.


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In banking sector, relationship management could be defined as having and acting upon
deeper knowledge about the customer, ensure that the customer such as how to fund the
customer, get to know the customer, keep in tough with the customer, ensure that the customer
gets what he wishes from service provider and understand when they are not satisfied and might
leave the service provider and act accordingly.
CRM in banking industry entirely different from other sectors, because banking industry
purely related to financial services, which needs to create the trust among the people.
Establishing customer care support during on and off official hours, making timely information
about interest payments, maturity of time deposit, issuing credit and debit cum ATM card,
creating awareness regarding online and e-banking, adopting mobile request etc are required to
keep regular relationship with customers.
The present day CRM includes developing customer base. The bank has to pay adequate
attention to increase customer base by all means, it is possible if the performance is at
satisfactory level, the existing clients can recommend others to have banking connection with the
bank he is operating. Hence asking reference from the existing customers can develop theirclient
base. If the base increased, the profitability is also increase. Hence the bank has to implement lot
of innovative CRM to capture and retain the customers.
There is a shift from bank centric activities to customer centric activities are opted. The
private sector banks in India deployed much innovative strategies to attract new customers and to
retain existing customers. CRM in banking sector is still in evolutionary stage, it is the time for
taking ideas from customers to enrich its service. The use of CRM in banking has gained
importance with the aggressive strategies for customer acquisition and retention being employed
by the bank in todays competitive milieu. This has resulted in the adoption of various CRM
initiatives by these banks.
OBJECTIVES OF CRM IN BANKS
CRM, the technology, along with human resources of the banks, enables the banks to analyze the
behavior of customers and their value. The main areas of focus are as the name suggests:


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customer, relationship, and the management of relationship and the main objectives to implement
CRM in the business strategy are:
To simplify marketing and sales process
To make call centers more efficient
To provide better customer service
To discover new customers and increase customer revenue
To cross sell products more effectively

Customer retention: Knowing and understanding that some customers have left the
company and knowing specifically who has left is even more important, and also
knowing why these customers left is not an easy task at all. The more customers leave,
the revenue to the company decreases and hence the greater the loss of revenue. It is also
difficult to encourage customers to stay, but this is done base on the assumption that,
keeping an existing customer is far more cost effective than acquiring a new one

Cross-selling and up-selling: Cross-selling and up selling is trying to know which
products can increase, rather than decrease a customers total profitability. Cross-selling
is selling a product to a customer base on another purchase the customer has already
done. Up-selling is also defined as motivating an existing customer to trade up to more
profitable products. Because of the assumption that selling more services to an existing
customer is less costly and also increases revenue, it has become very common these
days. Cross-selling helps companies to sell the right product to the right customer at the
right time. The desire of many companies to do the cross- selling has made the
automation of CRM marketing technologies very popular

Behavior Prediction: This helps organizations to determine the next thing customers
will do in the future. Data mining techniques are used for behavior prediction based on
the customers history to foresee customers future behavior. By understanding the next
action a customer will take, the organization can make so many marketing decisions


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based on that. The key to this is to help you to actually know who your best customers
are

Personalization: This is the ability of a company to personalize or customize
communication, products and services base on knowledge, behavior and preferences at
the interaction time. Personalization technologies can apply their learnings to future
personalized messages. This helps to remove the guesswork, resulting in a creeping
understanding of customers and their preferences over that customers relation with your
company. Personalization on a business to customers (B2C) website is largely based on
the analysis of a customers click streams, his or her navigation path through a
companys website.



CRM, the technology, along with human resources of the banks, enables the banks to
analyze the behavior of customers and their value. The main areas of focus are as the
name suggests: customer, relationship, and the management of relationship and the main
objectives to implement CRM in the business strategy are:
To simplify marketing and sales process
To make call centers more efficient
To provide better customer service
To discover new customers and increase customer revenue
To cross sell products more effectively

The CRM processes should fully support the basic steps of customer life cycle. The basic
steps are:
Attracting present and new customers
Acquiring new customers
Serving the customers
Finally, retaining the customers



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In today's increasingly competitive environment, maximizing organic growth
through sales momentum has become a priority for Banks and Financial institutions. To
build this momentum banks are focusing on Customer relationship management
initiatives to improve
Customer satisfaction and loyalty
Customer insight/ 360 view of customer
Speed to market for products and service
Increase products-to-customer ratio
Improve up sales and cross sales
Capitalizing on New market opportunities

The idea of CRM is that it helps businesses use technology and human resources
gain insight into the behavior of customers and the value of those customers. If it works
as hoped, a business can: provide better customer service, make call centers more
efficient , cross sell products more effectively, help sales staff close deals faster, simplify
marketing and sales processes, discover new customers, and increase customer revenues
.It doesn't happen by simply buying software and installing it. For CRM to be truly
effective, an organization must first decide what kind of customer information it is
looking for and it must decide what it intends to do with that information.

For example, many financial institutions keep track of customers' life stages in
order to market appropriate banking products like mortgages or IRAs to them at the right
time to fit their needs. Next, the organization must look into all of the different ways
information about customers comes into a business, where and how this data is stored and
how it is currently used.

One company, for instance, may interact with customers in a myriad of different
ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile
sales force staff and marketing and advertising efforts. Solid CRM systems link up each
of these points. This collected data flows between operational systems (like sales and
inventory systems) and analytical systems that can help sort through these records for


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patterns. Company analysts can then comb through the data to obtain a holistic view of
each customer and pinpoint areas where better services are needed.

In CRM projects, following data should be collected to run process engine:
1) Responses to campaigns,
2) Shipping and fulfillment dates,
3) Sales and purchase data,
4) Account information,
5) Web registration data,
6) Service and support records,
7) Demographic data,
8) Web sales data.

BENEFITS OF CRM

Higher customer retention and loyalty: The customer retention will increase when
Customers stay longer, buy more and buy more frequently. The customers take more initiatives
that increase bounding relationship, and as a result the customer loyalty increases.
Increased customer profitability: The customer profitability will increase when the
customer wallet-share increases, the up-selling goes up as well as cross-selling and follow up
sales and also more referrals come with higher customer satisfaction among existing customers.
Lower cost of recruiting customers: When the cost of recruiting new customers reduce
or go down, there will be savings to be made on marketing, mailing, contact, follow-up,
fulfilling, service and many more.
CRM Banking Focuses on the Customer :CRM manages to places the customer at the
focal point of the organization in order to cater to his needs, satisfy him and thus maximize the


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profits of the organization. Banking CRM understands the needs of the customer and integrates it
with people, technology, resources and business processes. It focuses on the existing data
available in the organization and uses it to improve its relationship with customers. Banking
CRM uses information and analytical tools to secure customer focus. Thus it is completely
essential that banks implement CRM in order to secure this.
Overall Profitability :CRM enables banks to give employee's better training that helps
them face customers easily. It achieves better infrastructure and ultimately contributes to better
overall performance. The byproducts of CRM banking solutions are customer acquisition,
retention and profitability. Banks that don't implement CRM will undoubtedly find themselves
with lesser profitability coupled with a sharp decline in the number of customers.
Satisfied Customers: It is important to make a customer feel as if he / she is the only
one - this will go a long way in satisfying and retaining them. Bankers need a return on
investment and it has been proved that increase in customer satisfaction more than contributes a
fair share to ROI. The main value of CRM banking lies in satisfaction and increased retention of
customers.
Centralized Information :CRM banking solutions manage to clearly integrate people,
processes and technology. CRM banking provides banks with a holistic view of all bank
transactions and customer information as well and stores it in a single data warehouse where it
can be studied later.
CRM Banking Boosts Small Banks: Banking CRM software meets the needs of banks
of all sizes in terms of attaining the required accuracy and understanding of customers. Merely
assuming that banks that are considerably smaller in size have a better customer approach and
are able to deal with their customers in a better manner is wrong. They are just as much in need
of CRM aid as the others. Small banks on account of a limited amount of money have had to


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realize that a large contribution to profits is directly the result of good customer service. CRM
makes sure that the bank delivers exactly what the customer expects.
Customer Segregation :CRM enables a bank to see which customers are costing them
and which are bringing benefits. CRM provides them with the required analytical tools that will
help them focus on the importance of segregating these two and doing what is required to avail
of the maximum returns. After this segregation is done CRM easily enables banks to increase
their communication and cross-selling to their customers effectively and efficiently.
Aggressive Customer Acquisition: CRM solution supports the creation of demand
generation through multi-channel and multi-wave campaigns. The solution ensures the banks
marketing message is appropriately personalized and targeted towards the most suitable segment
of prospects. This optimizes marketing efforts and results in greater conversion of prospects
Improved Cross-sell Framework: The solution presents a unified 360 view of the
customer, allowing single point access to all the relationships the customer has forged with the
bank. This along with robust customer analytics effectively supports true relationship banking,
providing a robust framework for cross-sell opportunities.
CRM solution also integrates with other white labeled solutions to facilitate contextual and
personalized customer engagement, with a keen focus on right-talk driven right-sell.
Increased Operational Efficiencies and Collaboration: CRM solution supports
business automation for processes and business activities, eliminating manual tasks and
reducing process time. Straight through processing abilities enhance reduction in turnaround
and processing time, increasing output and enabling speedy completion of tasks. The
multilingual Web-based single repository of information enables remotely located bankers to
collaborate and transact seamlessly.


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Lower Total Cost of Ownership (TCO):A Web-based solution leveraging new-
generation technologies, CRM solution is future-proof and can be seamlessly integrated with
other enterprise applications. With a robust architecture and proven scalability, it ensures
protection for the banks technology investments
Customer Information Consolidation: Instead of customer information being stored in
product centric silos, (for e.g. separate databases of savings account & credit card
customers), with CRM the information is stored in a customer centric manner covering
all the products of the bank. CRM integrates various channels to deliver a host of services
to customers, while aiding the functioning of the bank.
INTANGIBLE BENEFITS

Overall smoother functioning within your company : To determine this benefit,
consider measuring the time spent looking for needed information versus time spent
utilizing information and getting on with your job. It can be shocking to learn how much
time is spent by sales personnel on unnecessary administrative matters, or the amount of
time a new sales person spends getting up to speed in a new territory!

Increased employee motivation and satisfaction : While this may be difficult to
measure, consider measuring feedback from those employees who use CRM. An
alternative measurement is employee turnover rate for those personnel who use the CRM
system.

Better trained and more skillful sales, marketing and customer service personnel
CRM can provide an excellent training ground for personnel to quietly spend time
learning facts and figures about your products and services. To determine this benefit,


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consider measuring the ability of sales personnel to quickly access needed facts and
figures, including the implementation of required sales and business procedures.

Improved use of mobile access devices This benefit is important given that each of us
have a different technology assimilation learning curve that impacts our future use of
equipment and technology. To determine this benefit, consider measuring the comfort
level over time of field personnel who use the mobile devices


More up-to-date information and easy access to this information: Up-to-date
information and easy access are subjective measurements made by end-users. To
determine this benefit, therefore, consider measuring the timeliness of needed
information and the ease of accessing this information based on end-use standards.

Improved responsiveness to customer and prospect requests : Link a go to person
manager, sales representative or customer service representative) to each customer
request and work until the request gets resolved. To determine this benefit, which may be
tied in with customer service, consider measuring the time it takes to respond completely
to a customer or a prospect request.

Improved image of your company : Automation can play a leading role in building
your companys image in the eyes of your customers. To determine this benefit, consider
measuring the reaction of existing and future buyers to your sales and marketing
professionalism.

The ability to differentiate your company from the competition: It should be noted
that many studies have tried or are trying to measure the competitive advantage resulting


22
from CRM. Consider measuring the increased customer loyalty as well as customer
perception of your company versus the competition.

Support for organizational change(s) with your firm: To determine this benefit,
consider measuring the time lost training new sales and marketing personnel.

Improved understanding and better control over expenses: CRM can assist in this
effort, assuming sales, marketing and customer care expenses are tagged to individual
sales personnel and /or accounts. To determine this benefit, consider measuring expense
per sales and marketing personnel and/or per account.
CHALLENGES FACED BY BANKS IN SUCCESSFUL
IMPLEMENTATION OF CRM
The most pervasive challenges to effective customer knowledge include
The difficulty of obtaining a complete view of customers.
The need to move away from disjointed, standalone, and inconsistent channels to provide
a cohesive, multichannel offering.
The burden of disconnected legacy systems and disparate databases that store client
financial data.
The cost and complexity of meeting stringent government regulatory and client security
and privacy requirements.
The pressure on margins and growth prospects from increased competition.
The costs associated with retaining customers and developing customer loyalty.






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CRM PRINCIPLES
The main principles of CRM can be grouped into seven guiding factors
The main principles of CRM can be grouped into seven guiding factors:
1. Customer focus
The first and foremost important guiding principle in CRM is customer focus. Who is a
customer? This question is very fundamental. A customer is a person or group of persons who
receives the product or servicethe final output of a process or group of processes. A customer
is the final arbiter of quality, value and price of a product or service. A satisfied customer only
assigns value to a service, on the contrary, to a dissatisfied customer a product or service has no
value, even if the concerned service or product has been designed with lot of effort, energy and
cost after a thorough planning.
A satisfied customer motivates his fellow members to go in for the service or product that
he has already acquired. But a dissatisfied customer always counsels his friends, and fellow
members not to go to banks where his experience proved to be wrong or other-wise. So
customers delight or customers satisfaction is the essence of any CRM program. As a part of
this focus on customers, banks should ensure that clients are identified; their requirements are
determined, understood and met enhancing customers satisfaction.
2. Leadership
Persuasion, judgment and decision-making abilities are the main attributes of quality
leadership. When there is a slight chance of getting a business but the client is hesitating or in a
fix, or not in a position to decide properly, it should be followed up by the relationship manager
by patient hearing, mild counseling and to stand by the side of the prospective client to help clear
his doubts and to make him feel happy by realizing that he is going in the right direction and he
is very right in choosing his requirements.
The following points may be found helpful in this regard:
(a) It is to be communicated to all employees that all customers should be given a proper hearing
and it should be supported from all levels.


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(b) Ways and means should be identified and practiced of getting and staying closer to
customers.
(c) Proper respect should be extended to the customers. All relevant information should be
collected from them with humble and polite approach. Proper value should be given to their
feedback.
(d) There should be proper re-action to the information and feedback provided by the customers
in designing, developing and providing desired products at afford-able cost.

3. Process approach
A process transforms an input into desired output by the use of resources, energies and
time. In producing an output there may one single process or a group of inter-related processes.
In case of inter-related processes, often the output from one process directly forms the input to
the next. For effective functioning of an organization, it has to identify and manage numerous
linked activities with the help of different processes for accomplishing its goal.

4. System approach
Customers requirement is one level of commitment. That level implies a system that is
reactive and provides to customers what they want but the target should be to achieve more and
to exceed the customers expectation to accommodate future requirement and to build a cushion
against the competitors attributes.
CRM denotes the management of the entire system and is not confined to only one or the
other sub-systems or functional departments. CRM is based on a system approach to
management. Its primary objective is to increase value to customers on a continuous basis by
designing and improving organizational processes and systems on a ongoing basis. Meeting Each
sub-system may have its own goal but the goal and objectives of all sub-systems are to be
integrated to achieve the overall goal.



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5. Involvement of people
The fundamentals of CRM bear the genes of customer relationship through involvement
of people, i.e., the work-force at the disposal of the organization. The whole gamut of CRM is
for the people, of the people and by the people. People involvement at all levels is essential for
the success of a CRM program. The bank managers and staff must be in a position to exploit the
concept of customer relationship completely.
Customer relation may be defined as that dimension of relationship marketing that seeks
and ensures customer loyalty by fulfilling promises and continuing to satisfy customers wants
and needs so that defection is zero. It comprises of three levels of relationships; financial
relationship, social relationship and structural relationship.
Drawing of money through ATMs instead of physical presence in the branch for
withdrawal of cash through cheques or withdrawal forms may be sited as example. To obtain the
full benefits of people involvement, the human resource management should focus on employee
empowerment, productivity linked reward, zero defeat service oriented train-ing and total quality
management.

6. Mutually beneficial customer relationship
The relationship with the customer should be based on a mutually beneficial relation-
ship. A bank should not concentrate its attention towards earning of profits only, but focus
should be directed to the customers wealth creation or value enhancement with the motto of
earning through service.
As an example we can talk of a savings account thats fixed up to give you more
interest. It ensures that any balance in your savings account above a certain amount, say, Rs
3,000 automatically gets transferred to a fixed deposit to give you higher returns, which will be
swept back into your savings account, when you need it.
Sometimes, other benefits are also extended, such as, free personal accident insurance
coverage along with fixed deposit scheme above a certain amount and above a certain term.


26
Banks are no more restricting their activities to deposit and advances; rather they work with the
mot-to of offering Integrated Total Package Solutions to all needs of a customer. Banks have
gone to the extent of booking cinema tickets, paying utility bills, school fees etc. for the ease of
their clients who are very busy and do not find time for such work. Many of such activities are
not profitable in terms of time and efforts spend by the bank. But banks are carrying out such
services for mutual benefits, which pays in the long run. Retention of customers and building a
long lasting relationship is the main criteria under this concept.

7. Continual improvement
Another objective of CRM is the efforts towards continuous improvement in the
customer relationship through the provision of value added ser-vices at favorable cost. Business
processes in the areas of finance, system integration, human resource management etc. are to be
automated and optimized with an aim to increase the efficiency and effectiveness of operations.
The most effective way of improvement lies in innovation and change management.
Todays successful organizations must stimulate and foster innovation and master the art of
change. Organizations that maintain their flexibility, spontaneity and unpredictability,
continually improve their quality and, beat their competitors to the market place with a constant
stream of innovative products and services, will be the winners.
The major areas to be targeted are:
(i) Improving the effectiveness of marketing.
(ii) Implementing multichannel trigger driven marketing.






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Types of Customer Relationship Management Tools
Customer relationship management tools represent items or processes a company implements to
create a connection with consumers. These tools can be either standard internal departments or
technology that collect customer data or feedback. Traditional customer relationship
management tools include a customer service department, surveys, or outsourcing. Newer tools
include websites and social media networks, among other technology. Companies can use
multiple tools in order to saturate the market with customer relationship tools.
A customer service department is typically the front line in terms of customer outreach. This
department has enough staff members to handle phone calls or other inquiries about the business
and its products. The department synthesizes the gathered data for review by upper management.
In most cases, this tool represents a reactive stance in terms of establishing a customer
relationship. The business simply waits for customers to contact the business in order to react to
issues.











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Surveys
Surveys and outsourcing are two related customer relationship management tools. A
survey is typically a paper document companies send to customers. Several questions or
other information on the survey seek information on the customers' thoughts on the
business and its products. Outsourcing this process to a third party is common because
the outsourcing company often has the tools and items necessary to gather information
quickly and cheaply. These steps are typically a proactive stance in customer relationship
management.
Technology
Technology adds a new wrinkle to customer relationship management tools. Companies can use
a corporate website as both a proactive and reactive response for customer relationship
management. The website allows a company to inform consumers on sales, changes, and other
information relating to the business. The biggest issue, however, is the fact that companies must
wait for customers to visit the website in order to take advantage of the information or feedback
forms. Companies can use the website with some success if it is set up and managed properly.
Social media networks
Social media networks take technology and the use of websites to a whole new level for
customer relationship management tools. These networks usually provide standard websites or
tools that a company can use to inform or query consumers for information. Depending on the
social media platform, a company can either send direct notes or e-mails in a proactive manner
or simply advertise a link to its social media page. Either way, both methods provide a company
new customer management tools to reach consumers. These tools are often additional to websites
because social media may be a more frequent location for consumers to visit on the Internet\


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EFFECTIVE CRM IMPLEMENTATION
Banks can take several steps to strengthen their customer relationship management in an
effective manner.

Acknowledge email enquiries
At the very minimum, banks should send out an automated email response that acknowledges
receipt of a customer's email and lets the sender know when to expect a more complete response.
It is then vital to get back to the customer within the promised time frame. Banks can earn more
customer goodwill if they respond faster than the imposed deadline. To handle significant
volumes of email, banks need adequate routing technology. Many banks regard a voice call
centre as a cost of doing business, but they don't look at it the same way with email.

Develop the right contact strategy

By knowing which offers and incentives to offer to which customers and when, banks
will not annoy customers with unwanted marketing offers, building customer loyalty along the
way. Such goals can be at least as important as realizing cross-sell opportunities.

Providing online `chatting'
An alternative to telephone support, online chatting is providing a service via emails or any
other form of immediate response. This service also offers some of the immediacy of the phone
but primarily allows customers to remain online. With online chatting, service agents can usually
handle between one and three customer inquiries at once.





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Reduce costs by improving website design and self-service
Email, telephone support, and chat all involve considerable staffing costs. But to reduce these
expenses a site should anticipate customer needs. Sites that is difficult to navigate and don't
provide needed information chase away some customers and force those who stay to resort to
more expensive channels to satisfy their service needs.

Analyses the project's scope
Before recommending or embracing CRM, bank executives must analyses the business issues,
the customer relationship model and the exact nature of customer interactions and how they tie
together. Banks should not embrace top-line growth as an objective until they can understand
precisely how CRM technology will provide those new revenues.

Change accounts into customer
Traditionally banks have closely associated customers with accounts, to the point of calling the
account the customer and vice versa. Customers will tend to feel alienated when they are treated
like a number instead of a person. A conventional account structure usually contains very little
information about customers and their needs, or their relationship with competitors or other
divisions within the bank.


TRENDS IN CRM IN BANKS
Today, more than ever before, the ability to maximize customer loyalty through close and
durable relationships is critical to retail banks ability to grow their businesses. As banks strive to
create and manage customer relationships, several emerging trends affect the approach and tools
banks employ to achieve sustainable growth. These trends reflect a fundamental change in the
way banks interact with the customers they have and those they want to acquire.


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Focusing on organic growth
Traditionally, banks have grown through an aggressive strategy of acquiring direct competitors
and taking over their branch networks. Today, that strategy is no longer sufficient, since it
doesnt create organic growth for the financial institution. To build stronger customer loyalty,
banks need improved customer knowledge to develop products and deliver services targeted at
specific market segments; resulting in more directed marketing, sales and service tactics.

Creating deep business insight into customer preferences
Customer loyalty that drives organic growth can only be built through a consistent customer
experience this means understanding each individual customers needs and preferences. One of
the largest challenges banks face is how to better understand their customers and provide
personalized customer service. It is clear that financial service providers can no longer sustain
growth and profitability targets through mass direct mail campaigns that deliver less than 1
percent response rates. Those that do will lose out to competitors implementing personalized
communications that target the right customer, at the right time, with the right product or service

Improving distribution and channel management
To take themselves to the next level of improved sales and service, banks are focusing on
developing, implementing and integrating their channels more rapidly and efficiently. Their goal
is to meet three objectives:

Improved and more consistent service based on a full customer view
Increased revenue through adoption of new products
Improved profitability through lower product development and service costs

Forward-looking banks will simultaneously improve customer service quality and profitability
by deploying an integrated CRM strategy. Deepening relationships with their customers means


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that banks must offer their products and services through appropriate delivery channels that
appeal to their customers. Deploying multiple channels and integrating them at the enterprise
level give banks a consistent and full view of the customer. To be successful, this must include
all service channels both physical and virtual including, call center, Web, branch, kiosk,
ATM, phone and mobile devices.

To achieve this, banks need to develop technology, operational processes and customer strategies
to make their channels more effective in reaching and serving their customers. By tailoring
products or services to specific customers or market segments, banks will be able to increase
their product adoption rate, revenues and return on investment (ROI) for new product
development.

Safeguarding customer information
Adding to this complexity, customer privacy and information security are under attack as never
before. The threats come from many quarters including increasingly sophisticated identity
thieves, constant phishing expeditions by criminals seeking to trap unwary customers, and even
inside jobs where staff sell customer data to criminals.

FINDINGS
CRM has emerged as a popular business strategy in todays competitive environment. It is a
discipline that enables the companies to identify and target their most profitable customers. It
involves new and advance marketing strategies that not only retain the existing customers but
also acquire new customers. It has been found as a unique technique which can bring remarkable
changes in total output of companies. Through the literature survey and data analysis it can be
inferred that CRM tries to find out the relationship between perception and satisfaction,
commitment and loyalty that underlines the significance in Indian Banking Sector. Customers
largely select their banks based on how convenient the location of bank was to their homes or
offices. With the advent of new technologies in the business of banking, such as internet banking
and ATMS, now customers can freely chose any bank for their transactions. Private Banks have


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traditionally viewed themselves as exceedingly Customer Centric offering what they believe to
be highly personalised services to the High Net Worth Customers. It is also found that the
structured approach of CRM can provide various benefits to a bank, namely a distinctive and
consistent customer experience, clear identification of the organisation, technological and
process-related capabilities. The banking industry is much further along than other industries in
recognising the value of CRM and implementing decision support systems to support CRM.
Though most of the banks have already focused on tactical point solutions, theyre ready for a
transition toward strategic, enterprise-wide CRM initiatives that cross major business lines. An
effective decision support system for CRM enables to collect data about customer from every
touch consolidate this information into a single view of the customer, and use this information
for customer profiling, segmentation, cross-selling, up selling and retention efforts. As banks
continue to seek a unified understanding of customer relationships across diverse channels, the
mportance and penetration of CRM is expected to grow like anything













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CRM AT ICICI BANK

CRM at ICICI Bank involves increased communication between the bank and its present and
prospective customers. Its philosophy focuses on each and every customers satisfaction
CRM facilitated coordination of multiple business functions & multiple channel of
communication with the customers to carry out customer management more efficiently. It also
automated the process flow tracking in the product sales process and helped generate customized
reports and promote cross-selling








Understand and Differentiate
Organizations need to understand their customers in order to have a relationship with
them.
Profiling to understand demographics, purchase patterns and channel preference.
Primary research to capture needs and attitude.
Customer valuation to understand profitability, as well as lifetime value or long-term
potential.


35
The ICICI Groups customers need to see that the firm is differentiating service and
communications, based on their learning independently and on the customer expectation
and the expected values expected.
Develop and Customize
In a customer-focused world, product and channel development has to follow the
customers lead, identify customers wants, determine the value and desire of the
customer, etc.
Organizations are increasingly developing products and services, and even new channels
based on customer needs and service expectations.
ICICI believes that the extent of customization should be based on the potential value
delivered by the customer segment.

Interact and Deliver
To foster relationships, organizations need to insure that:
All areas of the organization have easy access to relevant, actionable customer
information.
All areas are trained how to use customer information to tailor interactions based on both
customer needs potential customer value.

ICICI is strongly of the opinion that value is not just based on the price of the product or the
discounts offered but are based on a number of factors including the quality of products and
services, convenience, speed, ease of use, responsiveness, and service excellence.

Acquire and Retain
The more ICICI learns about customers, the easier it is to pinpoint those that are
producing the greatest value for the organization.


36
They aim to continue to learn more about each customer segment and use it for
successful customer retention.
As ICICI moves step further in CRM they hopes to gain insight and understanding that
enhance the subsequent efforts. The organization shall become increasingly sophisticated
in the implementation of CRM processes, and over a period of time shall become
increasingly profitable by doing so.

CRM IMPLEMENTATION IN ICICI
CRM Implementation Following 3 areas are taken care while implementing CRM at ICICI Bank:
Business Focus
Components of CRM in ICICI
1. Customer Information
2. Sales Marketing Trends
3. Marketing Efficency
Implemented solution from Siebel for automation of customer handling
Track all customer requests and complaints
Identify new opportunities for existing customers as well as new customers

Organizational Structure

Organizational Structure Dynamic, constantly evolving and responsive to change
Flexible and consistency in standards across business groups


Five principle groups:
Retail Banking


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Wholesale Banking
Project Finance and
Special Assets Management International Business Corporate Center
All the five groups are compatible with CRM

Technology Focus
Technology Focus ICT (Information and Communication Technology) Strategic Tools
for competitive advantage
Multichannel Banking
Technology Strategy 24*7 availability Technology
Management Group Group wide technology
Sybase IQ based database
Implemented Informatics PowerCenter (2003)
Extraction, transformation and loading

Conclusion
Customer centric approach of ICICI Bank helped it to gain number 2 position in
India for Banking service Implemented CRM not as a tool but strategy for
competitive advantage Constantly paid dividends results in happy satisfied
customers






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SUGGESTION
Customer Relationship Manager
In the course of the research study there is a constant switch over of 90 percent of the
customers over a period of 3 to 5 years. The major factor for such switch over is the lack
of satisfaction in the service delivery and personalized products/services that cater to the
needs of the customer. Hence it is suggested to have a dedicated relationship manager to
measure the satisfaction levels of the customer

Identify Customer Expectation
Identifying expectations of the customers and meeting the expectations by suitable
products/services is one of the key elements of relationship management. It is suggested
through the research study that the identification of expectation can be identified from the
customers perceived service quality delivery and the satisfaction level of the customers.

Personalized Product/Services
It is suggested that, bankers may encourage suitable contribution of ideas towards
innovative product and services from all concerned in the process of product/Services
design and delivery system. Such an approach is suggested to be continuous in character.

Building Delivery Channels
Hence it is suggested to build more functional delivery channels to reduce the complexity
in delivering the products/services. In spite of advancements in delivery channels like
ATMs, Internet banking and mobile banking only few are gaining popularity among the
customers. The retail banks need to create more awareness and increase the utilization
level of the delivery channels. This will improve the service quality, reduces cost of
providing the service, minimizes the delivery time and in building Eco friendly delivery
system.





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Crafting Complaint Resolution Mechanism(CCRM)
In the research study the varying nature of customer complaints can be observed. The
customers look for a system to express their complaints and get it resolved in time. It is
observed from the study that it takes on an average, approximately three days to redress
the grievance of a complaint which effects on the satisfaction level. Therefore it is
suggested to craft a complaint resolution mechanism to bring a logical end to the issues
thereby minimizing the customer complaint cycle. This will strengthen the relationship
with the customer and build a reliability quotient in the operations.

Standard Processing Time(SPT)
Generally the retail bank customer expects the service to be offered at the right time. In
this context it is suggested that every service should be framed to a standard processing
time and need to explicitly specify to the employees need to follow the SPT and bring
reliability in the system.

Improving Customer Interaction
The interaction with customers is an essential input for effective customer relationship.
Active interaction at periodic intervals would reveal the relationship status. It is therefore
suggested that, bankers may come forward with appropriate and effective interaction
mechanism. In this context, the researcher could observe that some banks have already
initiated steps such as, appointment of relationship managers. Such approaches should
further be activated aiming at total customer interaction leading to build up better
relationship.

Customization of CRM Packages
The results of the research study reveal that there appears to be lack of awareness with
the bank employees as well as adoption of CRM packages available in the market. It is
suggested that the successful implementation of CRM package can be achieved only if
the bank can create the right environment, culture and attitude of the employee aiming to
serve the customers in the best possible manner



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Conclusion
The study brings to light the various aspects relating to relationship building in retail Banking
Industry. The variables identified are contributing towards relationship building and dissolution
of relationship. It will definitely help bankers to evolve appropriate strategies towards
relationship building. The study also found that there is a difference in the service quality
perception of customers and bankers as regard to several aspects of relationship management. On
this line of the study various suggestions towards improving Bank customer relationship by
enhancing the delivered service quality and the development of personnel involved in the
delivery system which is coined as External and Internal service quality. The relationship models
identified in the study would throw further light on strategic decision pertaining to relationship
building. An effective CRM program designed and executed will obviously provide a win-win
platform to both the service providers and the customers. It is hoped that this study is a humble
contribution towards achieving this goal.











41
Books referred
Customer Relationship Management-Emerging Concepts Tools and Application Author-Jadish N sheth
BIBILOGRAPHY
http://www.slideshare.net/JyotiPunjPrakash/icici-case-on-crm-15566086
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http://www.sssworld.com/News/history-of-crm/
http://pure.ltu.se/portal/files/30961216/LTU-PB-EX-0503-SE.pdf
http://en.wikipedia.org/wiki/Customer_relationship_management
http://www.wisegeek.com/what-are-the-different-types-of-customer-relationship-management-
tools.htm#
http://www.webopedia.com/TERM/C/CRM.html