Strategic business project proposal

MBA Cohort 11
2nd March, 2018

Research title
How customer relationship management plays important rules for
customer satisfaction- A case study of BRAC Bank

Submitted by
Mohammad Abdul Kaium
B00335050
University of the West of Scotland
London Campus
Background of the study
Contemporary financial service industries have become highly dynamic and turbulent, with
many in form of new regulations, change in customer behaviour, increased usage of the
information and communication technologies and intense competitions (Heinonen, 2014;
Cvjovic et al. 2017). Banks must invest significant efforts to create added values and one way
to do that is to generate and support the development of long-term customer relationships that
provided the greater value than the value provided by the banking product itself. Building any
added value is hard to achieve nowadays because of the competitors’ activities which are often
very similar and erode the added value of any business (Zineldin, 2005).

Even though the banking industries have faced the significant changes in different business
segments in last two decades such as distribution changes (with greater usage of ATMs, PCs,
Internet and mobile banking), reduction of transaction costs, increased speed of services
substantially, managing supplier-customer relationship is still one of the crucial issues of the
banking industries (Ndubisi et al. 2007). According to those changes, customer behaviour and
needs changes a lot (want the best value, quick and hassle-free services etc.) and with that goal
to gain and maintain market competitiveness, banks invest a lot at financial, technological and
human resources in customer relationship management (CRM) (Jugovic et al.2015). here, the
relationship is such that both banking service providers and customers get to benefit from it for
long-term (Dimitriadis, 2011).

Tseng and Hu (2014) cited that CRM practice influences the service quality which is
considerate the main requirement to achieve competitive advantages over the rival and gain
profits.

Moreover, the practice of CRM can help the banking industries to identify answers to many
unsolved or ambiguous questions of the customer behaviour. Many of the baking industries
shift their strategical point of view of customer services from the traditional product oriented
to customer oriented.

To boost the customer loyalty and retention, many of the baking organisations started re-
engineering to make proper and new strategic connections with the new and existing customers.
By using the strategic CRM practice, some of the tertiary level banking organisations are
advance in the race to grip the potential customers and enhance their service gradually.
CRM is a foreseeable practice in the banking sectors in Bangladesh. Though the CRM practice
is very hardly observed in public banks, the wider use of it observes in the tertiary level private
banks. BRAC bank is one of the largest private banks and here the CRM system brings lots of
pieces of information about customers, sales transactions, marketing effectiveness to enhance
the customer service and improving customer satisfaction.

By analysing all aspects of literature and theories, the author considers the title as ‘how CRM
plays important rules for the customer satisfaction in the context of BRAC Bank’. So, it is
important to investigate how a bank works with their customers, how to solve their problems,
how to persuade them to purchase their products and services and how to develop customer
loyalty and long-term financial interactions. All of those aspects are considered under the
development of strategic CRM practice to enhance customer satisfaction. Thus, the research
question is

‘How bank use CRM system to persuade customers selling their products and services,
resolving their problems, developing loyalty and long-term financial interactions for customer
satisfaction?’

Research objectives

1. To develop the concepts and CRM;

2. To analyse how CRM system influences firm performance especially in the banking
sectors;
3. To explore how Bangladeshi banks use CRM technologies to satisfy their customers’
need and
4. To investigate the extent to which CRM concepts assist to build up competitive
advantages over time.

Rationale of research

The banking business is very highly competitive in Bangladesh regarding customer services,
improving customer satisfaction, selling products and services and ensuring customer
retentions because almost all the banks provide more or less similar services. Almost every
baking sectors move from traditional services to speedy computer-aided services. In this
regard, they employ people, process, and technology in a rational way (which is in other sense
known as CRM practice) to develop customer retention and increase satisfaction. The banking
sectors develop CRM practice day by day. So, it is a most important aspect to study more about
CRM due to the changing demand and customer needs.

Literature Review

Introduction

Chen and Popvich (2003) cited that the general concept of customer relationship management
(CRM) evolves from the combined efforts of people, process, and technology where this effort
helps to identify the potential customers for the company. So, the general definition of the CRM
system is considerate as integrate approach where it focuses on the relationship development
with the customers and generates profits for the company by creating the smooth service
environment. CRM system is a customer-centric process which evolves from using the advance
it infrastructure and strategic change of the organisation. Form the philosophical stance,
Marikovic (2015) stated that CRM system develops the relationship with the customers and
keeping customer orientation and also upgrade services to the existing customers.

In the advent of the technical marketing development, CRM systems play the important rules
to dominate the prime marketing principles. The changing of the customers’ demand and needs,
CRM integrate all the marketing issues such as sales, market management, customer service,
daily transactions to enhance the satisfaction day by day.

Knox et al. (2003, pp 268-269) cited that CRM is considered as a strategic approach which
developing the relationship with the customer and generating the value of the stakeholders.
From the point of view of customers’ need and expectation, CRM system analyses the customer
factors for their retention and also ensures to develop the long-term relationship (Rigby et al.
2003; Thakur, 2014; Al-Hawari, 2015).

Payne and Frow (2005) stated that CRM system is more efficient to handle the heterogeneous
customer groups by escalating the substantial enhancement of firm potentials.

Sayani (2015) also added that, with the use of CRM technology, the banking organisations
know their customer well enough and with the improving of organisations’ service quality they
get competitive advantages over the rivals and improve customer loyalty and satisfaction.

Actually, CRM technology helps firm in the operation side by maintaining, enhancing and
establishing a relationship with the potential customers and ensure customer retention for the
long-term.
In another study, Yim et al. (2004) cited that implementing the performance indicator in an
organisation, which includes CRM based technology, the organisation can focus on the
customer and developing knowledge about customer perception and needs. Though there is no
alternative to enhance customer satisfaction, the failure of CRM initiatives is very high in the
developing countries. Awarti and Sangle (2012) stated that 50-70 percents projects failed due
to the over-reliance on CRM technologies, less face to face interactions with the customers,
overemphasis on the resource-based CRM capabilities and ignoring the customer-centric view
of CRM. In another study, Bhat and Darji (2013) stated that the proper implementation
(installation and utilisation) is a critical success factor in organisations. In another case, the
researchers identified the key success factors of CRM in the individual organisation are failed
to distinguish the factors with other organisation in terms of performance managing customer
relationship and strategy about gaining the competitive advantages.

CRM in Banking Sector

In the competitive marketing environment, banks have applied two available strategies such as
aggressive approach and defensive strategy (Kotler and Bliemel, 1995). In aggressive
approach, banks attracting new customers by providing their products and services and
encouraging the customers to use their existing services (online accounts, online bill payments,
using other products etc.). In defensive strategy, banks are targeted to defend their existing
share market, keeping existing customers, protecting customer database and keep generating
the future business strategies for long-term existence in the competitive market.

By considering those strategies, banks adopt CRM technology to keep customer retentions and
build long-term relationships by re-establishing their organisational structures and culture.
Ndubisi et al. (2007) cited that the relationship marketing enables banks to detect and
understand the customers’ needs, and consequently offer superior values that will make
customer satisfied and become loyal for the long-term. One of the previous research, Hedley
et al’s (2006) research identified that the banking sectors change dramatically with the changes
of the of the customers’ individualistic characters and they also want to build the long-term
relationship with the financial organisations.

On another side, the traditional approaches to customer segmentation are out of dated and
become ‘extinct’.
The introduction of the CRM focuses on the banking operational level where it focuses on
functioning and oriented customer data as many as possible to process sales/purchases, and
subsequent customer interaction and orientation. Marinkovic (2015) cited that the bank's goal
is not always to focus on customers but to increase turnover from the loyal customers with the
efficient use of CRM technologies.

CRM in BRAC Bank

BRAC Bank, one of the largest private banks in Bangladesh, runs by one of the world largest
NGO ‘BRAC’, is looking to the new ways to enhance the customer's potentials and service
quality. Their core business process is not only enhancing the new customer’s groups but also
to enhance the bank performances by developing strategic lines to re-engineering the core
business process (BRAC bank CSR report, 2014). In the strategic lines, there is a good number
of banks in Bangladesh expand their commercial banking business, use different delivery
channel while growing and enhance the operation efficiency through in human resources and
technologies.

Currently, very little information is available on mediating role of loyalty about CRM and its
competitive advantages in the economy of Bangladesh due to the less research in this sector.
With the rapid changing of the economic condition, rapid change of inflation rate, BRAC bank
is a timely focus on the CRM system. With the aided by the BRAC NGOs, BRAC has
developed the massive improvement of branches by routinely collecting and cleansing
customer data and collecting and gathering reliable customer data. To improve the decision
support system, BRAC bank developed the information system by developing data
warehousing. Besides developing the fully compatible corporate data mining, bank partially
uses data warehouse for the development of CRM and production of accurate and consistent
management reports. The data banking system contains customers’ demographic data,
transaction data, product ownership data, risk and profitability data etc. for the strategic
decision of the customer analysis, BRAC bank CRM expertise analyse results to obtain and
design the action plans such as marketing incentives, campaigns, promotion etc. BRAC bank
recognizes customer is the most important partner for the business conduction and perceived
customer relation is beneficial and profitable. Here, the CRM system supports the main activity
of the bank such as field of marketing, sales, customer information service, and analytics.

Since CRM system is new in almost every banks in Bangladesh and BRAC bank as well faced
challenges to get accurate information across the enterprise. Poor data analysis,
misinterpretation of data, incomplete data, cost implication, customisation of the software
applications are some common challenges faced by the bank. The paramount of the IT
securities (pressurized by the central bank to install more security) costs a lot for not securely
using CRM system. Though BRAC bank facing some of the above challenges, they always
customised their workflow structures, employed skill stuff, and other initiatives to enhance
CRM practice.

Proposed research Model

The key issue of this research is customer satisfaction by using the CRM system in the banking
sector. Here, the customer satisfaction is the marketing term which measures how services and
products meet customer’s expectation. Customer satisfaction provides the leading indicator of
consumer's purchase intention and building loyalty. Here, the prime goal of the CRM system
to integrate marketing, promotion, sales, service, and customer support to deliver high and
swift service of customer satisfaction.

Thus, this research may choose SERVQAL Model (which includes reliability, assurance,
tangibility, empathy, and responsiveness) which is considerate as a multi-dimensional research
instrument which helps to develop the customer perception and expectations by developing
customer loyalty. This model also helps to develop the conceptual framework where the author
can identify the strategic CRM system and its applications regarding the deep search of
customer satisfaction.
Fig. SERVQAL model
Source: Emari, Iranzadeh, and Bakhshayesh, (2011), Determining the dimension of service
quality in banking sector

Conclusion
The continuous change in the financial market, customer behaviour and preferences and CRM
application in the banking industry play significantly for the customer satisfaction. Effective
CRM system provides customer segmentation in different criteria such as customisation of
services and products and continuous innovation of the product portfolio. From the discussion
of the theories in the literature review part, it is clear that bank can enhance customer loyalty
by understanding the customer dynamic behaviour and providing the exact and timely
information to the customers. On the other side, addressing customer complaints and providing
effective resolution can build customer loyalty and satisfaction. Though the banking sector in
Bangladesh has faced challenges for CRM practice, they have changed a lot to improve the
service quality. By using the SERVQAL model for the diagnostic of CRM practice in
Bangladesh, the author can consider ten dimensions to develop the conceptual framework such
as competences, courtesy, credibility, security, access, communication, knowing the
customers, tangibles, reliability, and responsiveness [ adapted from the previous research
Sharma, 2011].

Research methodology

Rationale for using qualitative research

Since this research aims to understand the importance of CRM in banking sectors for customer
satisfaction, the depth research is required to apprehend the people interaction to CRM
technology regarding how they provide day to day services to enhance customer satisfaction.
Here, the author may primarily choose the qualitative research which enables to understand the
people attitudes to their experience in the social world with specific context of the situation
(Myers, 2013). Manning (1992) and later Jones et al. (2006) also cited that the qualitative
research does not describe the norm but discover the richness and complexity of the situation.
Philosophical assumption

To understand the depth and complexity of the people and technology interaction (working
with CRM system) and also identify the organisation dynamics for providing the best customer
service, interpretative research is more suitable than two other approaches such as positivistic
and critical research. Critical research is less common of doing business and marketing research
but in many ways similar to interpretative research which usually followed up the social
situation like political, cultural and social phenomenon (Brooke, 2002). Positivistic research is
categorized deductive type research which explains experimental results and where the
research results are already known as before. On the contrary, interpretative research
acknowledges social phenomena which might be understood in the social context where they
guided and constructed by how the people interpret and understand the situation (Angen, 2000).
Walsham (1993) suggested that in the epistemological assumption of the interpretivism, the
generalisations derived from the experience which depends upon the researchers, their
methods, and interaction with the subject of the study.

Research Method

A case study methodology is primarily selected to carry out this research. In this regard, BRAC
bank is primarily chosen because it is considerate the most prominent bank and capture the
wider areas in Bangladesh such as Union and District level. CRM system is widely used in
almost every district level branches. On the other side, case study research allows for the
exploration and understanding the complex issues and explore and investigate contemporary
real-life phenomena through details contextual analysis (Chetty, 2013).

Data collection techniques

Participants

To study the nature of the CRM system in the banking sector and its application to provide the
customer satisfaction in the organisation is related to the decision-making process who are
utilising the CRM system in the different level of operations. Sampling strategy in the
qualitative research indicates the purpose of the strategy. Mays and Pope (1995) mentioned
that the aim of sampling in qualitative research is to identify the specific group of people who
hold characteristics or live in circumstances relevant to the phenomenon being studied. Here
the purposive sample is derived to identify the people who are using the CRM system such as
managers, it specialists, administrative people etc.
Data Collection

Various data collection techniques might be used in this study including structure, semi-
structured interviews, and analysis of various proceeding papers, documents and other archival
materials of the banking sector to understand how they utilise the information system to provide
the best service to the customers. Ryan and Bernard (2000) stated that the various data
collection techniques will be used to reduce the bias which is considerate the most common
pitfall in the qualitative research. In face to face or telephone interviews, the author can get the
exact opportunity to get insight stories of participants of using the CRM system and their
success, failure, and future suggestions or projects might help to get answers of the research
questions. The semi-structured interviews might conduct 30-45 minutes according to the
availability of their time.

Data analysis

The author might choose the narrative approach to analyse the qualitative data. The narrative
approach to some extent considered as ‘real world measure’ which are appropriate where ‘real
life problems’ are investigated. To utilise the CRM system, the bank officials and experts might
face the problems to execute the proper results to give feedback to customers. Cladinin and
Connelly (2000) advised two approaches to analyse the qualitative data through narrative
approach such as:

1. Determine the research problem and questions which is the best fit for narrative
research and capture the details stories of the incidents;
2. Analyse the participant's stories in thematic format and restore them into a framework
that makes the sense and analyse the elements of stories.

Ethical consideration

To conduct the qualitative research, the author first applies to the university ethical permission
panel and signed the necessary documents with ticking the checkbox and then in the field area,
the author may need to fill extra ethical obligation of the organisation.

Since the author decided to conduct the interviews and the participant's observation, he should
need to tell the participants at the starting of the interview what he is doing, why he is doing
and what he will do with the findings. The author keeps the information confidential and should
seek permission from the ethical panel to publish any materials.
Research project completion (Gantt Chart)

This research shows the different time frame to complete the whole dissertation which will be
started from second week of March, 2018 to last week of June, 2018. The author shows part
by part of dissertation in the different time frame through Gantt Chart.

Mar 2018 Apr 2018 May 2018 Jun 2018

ID Task Name Start Finish Duration
4/3 11/3 18/3 25/3 1/4 8/4 15/4 22/4 29/4 6/5 13/5 20/5 27/5 3/6 10/6 17/6 24/6

Introduction part and refine

1 07/03/2018 21/03/2018 2.2w
research objectives
Write literature with theories and
2 22/03/2018 19/04/2018 4.2w
model
Complete literature part and
3 20/04/2018 15/05/2018 3.6w
research method
Started primary research and
4 16/05/2018 12/06/2018 4w
finish analysis part
5 Concluding part 13/06/2018 21/06/2018 1.4w

Fig: Gantt Chart, Contains tasks to complete in the proposed time frame
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