Gaurav project


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Gaurav project

  1. 1. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS INTRODUCTIONCHAPTER : 1WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT?Before we begin to examine conceptual foundations of C.R.M. It will be useful to definewhat CRM is. A narrow perspective of customer relationship management is databasemarketing emphasizing the promotional aspects of marketing linked to database efforts.Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention inwhich a variety of after marketing tactics is used for customer bonding or staying in touchafter the sale in made.In today hyper competitive scenario, more than three quarters of the money and time spentby companies go towards acquiring and retaining customers. Customer-centricity hasbecome the buzzword and the ones with clear and relentless focus on customers, enjoy abetter competitive position. This is proved time again. Yet, companies go throughmeticulous processes to gradually and consistently mature into an “ ORGANIZATIONFOR THE CUSTOMERS” But, how would you mature into a customer focused orcustomer-centric organization? The answer is ; By reading and understanding yourcustomers. Yes, this is all need to do! And this you need to do not just once, but regularlyand consistently over the lifetime of your customer and beyond.Reading the customer demographics and understanding their needs (both explicit andimplicit) is what customer insight is all about. Customer insight is the basic point or thefoundation for building a customer centric organization. Everything in the value chainrevolves around this. This is the raw material . This is more a conversion process rather,since the end product is customer loyalty! Over decades, many organizations hadsuccessfully completed the conversion process and tasted higher returns, mostorganizations miserabely failed in their effortsCRM relies on customer data to create customer loyalty. The concept of CRM was againthe result of an evolution born out of necessity . When companies understood the need toobtain and maintain customer data, Which was exhaustive and scattered in nature and weredesperately looking for a tool that could compile, preserve use the data in a way they want,technology came to the rescue with exclusive methods called data mining , datawarehousing and thus data base management techniques were born. Technology ismechanistic and did not know what is required and what is not. A managerial tool wasneeded to perform the directors role in order to decide the path and processes. Thus CRMwas engineered as a tool to manage customer data using IT-enabled techniques 1
  2. 2. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCRM gives framework for the activities. It decides on what to do – the objectives, what isrequired to do it – the resources, who should do it – the people, how to do it – theprocesses, how long to do it – the time frame. CRM could be ready made, tailor made orhand made depending on the specific objectives it is set to achieve. CRM is unique in therespect that it follows a set of pre-determined processes to accumulate and managecustomer data, which was hitherto unpracticed Hence, CRM is defined as :“Customer relationship management (CRM) is a business strategy to acquire and managethe most valuable customer relationships. CRM requires a customer- centric businessphilosophy and culture to support effective marketing , sales and service processes. CRMapplications can enable effective customer relationship management, provided that anenterprise has the right leadership, strategy and culture”As is implicit in the above definition, the purpose of CRM is to improve marketingproductivity. In CRM, marketing efficiency is achieved because cooperative andcollaborative processes help in reducing transaction cost and overall development costs forthe company. Two important processes for CRM include proactive customer businessdevelopment and building partnering relationship with most important customers. Theselead to superior value creation. The basic concept is that the customer is not someoneoutside the organization, he is a part of the organizationPurpose of CRMCRM in its broadest sense, means managing all interactions and business with customers.This includes, but is not limited to, improving customer service. A good CRM programwill allow a business to acquire customers. Service the customer, increase the value of thecustomer to the company, retain good customers, and determine which customers can beretained or given higher level of service. A good CRM program can improve customerservice by facilitating communication in several ways: Provide product information, product use information, and technical assistance on websites that are accessible 24 hours a day, 7 days a week. Identify how each individual customer defines quality, and then design a servicestrategy for each customer based on these individual requirements and expectations. Provide a fast mechanism for managing and scheduling follow-up sales calls to assesspost purchase cognitive dissonance, repurchase probabilities, repurchase times, repurchasefrequencies. Provide a mechanism to track all points of contact between a customer and thecompany, and do it in an integrated way so that all sources and types of contact areincluded, and all user of the system see the same view of the customer (reduces confusion). 2
  3. 3. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Help to identify potential problems quickly, before they occur. Provide a user-friendly mechanism for registering customer complaints. Provide fast mechanism for handling problems and complaints. Provide a fast mechanism for correcting service deficiencies. Use internet cookies to track customer interests and personalize product offeringsaccordingly. Use the Internet to engage in collaborative customization or real-time customization Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness) The CRM program can be integrated into other cross-functional systems and therebyprovide accounting and production information to customers when they want it.KEY CRM PRINCIPLE Differentiate CustomersAll customers are not equal; recognize and reward best customers disproportionately.Understanding each customer becomes particularly important. And the same customersreaction to a cellular company operator may be quite different as compared to a car dealer.Besides for the same product or the service not all customers can be treated alike and CRMneeds to differentiate between a high value customer and a low value customer.What CRM needs to understand while differentiating customer is:1. Sensitivities, Tastes, Preferences and Personalities2. Lifestyle and age3. Culture Background and education4. Physical and psychological characteristics Differentiating Offerings1. Low value customer requiring high value customer offerings.2. Low value customer with potential to become high value in near future.3. High value customer requiring high value service.4. High value customer requiring low value service. 3
  4. 4. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Keeping Existing CustomersGrading customers from very satisfied to very disappointed should help the organization inimproving its customer satisfactions levels and scores. As the satisfaction level for eachcustomer improves, so shall the customer retention with the organization. Maximizing Life time valueExploit up-selling and cross-selling potential. By identifying life stage and life eventtrigger points by customer, marketers can maximize share of purchase potential. Thus thesingle adults shall require a new car stereo and as he grows into a married couple his needsgrow into appliances. Increase LoyaltyLoyal customers are more profitable . Any company will like its mindshare status toimprove from being an advocate. Company has to invest in terms of its product andservice offerings to its customers . It has to innovate and meet the very needs of itsclients/customers so that they remain as advocates on the loyalty curve. Referral salesinvariably are low cost high margin sales.Summarizing CRM activitiesThe CRM cycle can be briefly described as follows:1. Learning from customers and prospects, (having in depth knowledge of customer)2. Creating value for customer and prospects3. Creating loyalty4. Acquiring new customers5. Creating profits6. Acquiring new customers 4
  5. 5. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSWHY CRM IS NECESSARY?Several companies are turning to customer-relationship management systems andstrategies to gain a better understanding of their customers want and needs. Used inassociation with data warehousing, data mining, call centers and other intelligence-basedapplications, CRM “allows companies to gather and access information about customersbuying histories, preferences, complaints, and otherdata so they can better anticipate what customer will want. The goal is to instill greatercustomer loyalty.” Other benefits includes: Faster response to customer inquiries. Increased efficiency through automation. Deeper understanding of customers. Increased marketing and selling opportunities. Identifying the most profitable customers. Receiving customer feedback that leads to new and improved products or services.BENEFITS OF CRMImplementing a customer relationship management (CRM) solution might involveconsiderable time and expanses. However, there are many potential benefits. A majorbenefit can be the development of better relations with your existing customers, which canlead to: Increased sales through better timing due to anticipating needs based on historic trends Identifying needs more effectively by understanding specific customer requirements Cross-selling of other products by highlighting and suggesting alternatives orenhancements Effective targeted marketing communications aimed specifically at customer needs A more personal approach and the development of new or improved products andservices in order to win more business in the future Enhanced customer satisfaction and retention, ensuring that your good reputation inthe marketplace continues to grow 5
  6. 6. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Increased value from your existing customers and reduced costs associated withsupporting and servicing them, increasing your overall efficiency and reducing total cost ofsalesHISTORY OF CRMCustomer Relationship Management (CRM) is one of those magnificent concepts thatswept the business world in the 1990 with the promise of forever changing the waybusinesses 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 varietyof reasons. First among these was that it was simply so difficult and expensive to trackand keep the high volume of records needed accurately and constantly update them.In the last several years, however, newer software systems and advanced tracking featureshave vastly improved CRM capabilities and the real promise of CRM is becoming areality. As the price of newer, more customizable Internet solutions have hit themarketplace ; competition has driven the prices down so that even relatively smallbusinesses are reaping the benefit of some custom CRM programs.IN THE BEGINNING….The 1980 saw the emergence of database marketing, which was simply a catch phrase todefine the practice of setting up customer service groups to speak individually to all of acompany customers.In the case of larger, key clients it was a valuable tool for keeping the lines ofcommunications open and tailoring service to the client needs. In the case of smallerclients, however, it tended to provide repetitive, survey-like information that cluttereddatabase and did not provide much insight. vAs companies began tracking databaseinformation, they realized that the bare bones were all tht was needed in most cases: whatthey buy regularly, what they spend, what they do.ADVANCES IN THE 1990`SIn the 1990 companies began to improve on Customer Relationship Management bymaking it more of a two-way street. Instead of simply gathering data for their own use.They began giving to back their customers not only in terms of the obvious goal ofimproved customer service, but in incentives, gifts and other perks for customer loyalty. 6
  7. 7. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSThis was the beginning of the familiar frequent flyer programs, bonus points on creditcards and host of other resources that are based on CRM tracking of customer activity andspending patterns. CRM was now being used a say to increase sales passively as well asthrough active improvement of customer service.TRUE CRM COMES OF AGEReal Customer Relationship Management as its thought of today really began in earnest inthe early years of the century. As software companies began releasing newer, moreadvanced solutions that were customizable across industries, it became feasible to reallyuse the information in a dynamic way.Instead of feeding information into a static database for future reference, CRM became away to continuously update understanding of customer needs and behavior. Branching ofinformation, sub-folders, and customtailored features enabled companies to break down information into smaller subsets so thatthey could evaluate not only concrete statistics, but information on the motivation andreactions of customers.The Internet provided a huge boon to the development of these huge databases enablingoffsite information storage, where before companies had difficulty supporting theenormous amounts of information . The Internet provided new possibilities and CRM tookoff as providers began moving toward Internet solutions.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 morecooperative work between these different divisions through shared information andunderstanding, leading to increased customer satisfaction from order to end product.Today , CRM is a still utilized most frequently by companies That rely heavily on twodistinct features : customer service or technology . The three sectors of business that relymost heavily on CRM – and use it to great advantage – are financial services , a variety ofhigh tech corporations and the telecommunications industry . The financial services industry in particular tracks the level of client satisfaction and whatcustomers are looking for in terms of changes and personalized features . They also trackchanges in investment habits and spending patterns as the economy shifts . Softwarespecific to the industry can give financial service providers truly impressive feedback inthese areas. 7
  8. 8. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSIn recent years however , several factors have contributed to the rapid development andevolution of CRM . These include:-1. The growing de intermediation process in many industries due to the advent ofsophisticated computer and telecommunication technologies that allow producers todirectly interact with end – customers . For2. Example ,in many industries such as airlines , banks insurances , software orhousehold appliances and even consumables , the de-intermediation process is the natureof marketing and consequently making relationship marketing more popular . databasesand direct marketing tools give them the means to individualize their marketing efforts .3. Advances in information technology , networking and manufacturing technology havehelped companies to quickly match competition . As a result product quality and cost areno longer significant competitive advantages.4. The growth in service economy . Since services are typically produced and deliveredat the same institution ,it minimizes the role of the middlemen .5. Another force driving the adoption of CRM has been the total quality movement .When companies embraced TQM it became necessary to involve customers and suppliersin implementing the program at all levels of the value chain . This needed close workingrelationships with the customers .Thus several companies such as Motorola , IBM ,General Motors , Xerox , Ford, Toyota etc formed partnering relations with suppliers andcustomers with practice TQM . other programs such as JIT and MRP also made use ofinterdependent relationships between suppliers and customers .6. Customers expectations are changing almost on a daily basis . Newly Empoweredcustomers who choose how to communicate with the companies across various availablechannels. Also nowadays consumers expect a high degree of personalization .7. Emerging real time , interactive channels including e-mail , ATMs and call centre thatmust be synchronized with customer‟s non-electronic activities . The speed of businesschange , requiring flexibility and rapid adoption to technologies .8. In the current era of hyper competition , marketers are forced to be more concernedwith customer retention and customer loyalty .9. As several researches have found out retaining customers is less expensive and moresustainable competitive advantage than acquiring new ones .10. On the supply side it pays more to develop closer relationships with a few suppliersthan to develop more vendors11. The globalization of world marketplace makes it necessary to have global accountmanagement for the customers . 8
  9. 9. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 2 :CRM PROGRAMS & ACTIVITIESOne - to-one MarketingMeeting and satisfying each customer‟s need uniquely and individually . In the massmarkets individualized information on customers is now possible at low cost due to therapid development in the information technology and due to availability of scalable datawarehouses and data mining products . By using online information and database onindividual customer interactions , marketers aim to fulfill the unique need of each mass –market customer. Information on individual customers is utilized to develop frequencymarketing , interactive marketing and after marketing programs in order to developrelationship with high – yielding customers . In the context of business – to-businessmarkets , individual marketing has been in place of quite sometime . Known as KeyAccount Management Program, here marketers appoint customer teams to husband thecompany resources according to individual customer needs .CONTINUITY MARKETING PROGRAMSTake the shape of membership and loyalty card programs where customers are oftenrewarded for their member and loyalty relationships with the marketers. The basic premiseof continuity marketing programs is to retain customers and increase loyalty through long-term special services that has a potential to increase mutual value through long-termspecial services that has a potential to increase mutual value through learning about eachother .Partnering programsThe third type of CRM programs is partnering relationships between customer andmarketers to serve end user needs . In the mass markets , two types of partnering programsare most common : co-branding and affinity partnering .Traditionally customer relationship management ( CRM ) revolves around the threefunctions of selling , marketing and support . various process models have been builtaround how these functions are integrated and operated in a customer oriented enterprise.There is however a fourth critical function that is lacking in most CRM models .The fourth function that often is the source of a competitive edge is that of innovation .companies must continually reinvent themselves to deliver an improved and often a totallynew value offering to their customer base . CRM must provide the customer intelligence 9
  10. 10. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSthat feeds information back in to the enterprise‟s knowledge management process where itcan trigger new innovation process . When CRM is integrated into the innovation process ,significant value can be derived from faster time to market cycle times and with newprocess and services .Marketing automation must ensure that the innovation processes are actually marketdriven. A market driven innovation process must include both strategies that are focusedon satisfying customer requirements as well as strategies focused at redefining customerrequirements. Sales automation should be integrated with the innovation process byensuring that all sales channels are prepared and ready to take new processes and servicesto market before competitive forces can react. Customer service automation must bedesigned to empower the customer with the option of assisting with the design of the valueoffering. Redefining CRM around innovation, sales, marketing and service can identifynew competitive opportunities for an enterprise.There are three parts of application architecture of CRM: Operational - Automation to the basic business processes (marketing, sales, service) Analytical – support to analyze customer behavior, implements business intelligencealike technology Collaborative – ensures the contact with customers (phone, email, fax, web, sms, post,in person)Operational CRMOperational CRM means supporting the “front office” business processes, which includecustomer contact (sales, marketing and service). Tasks resulting from these processes areforwarded to resources responsible for them, as well as the information necessary forcarrying out the tasks and interfaces to back-end applications are being provided andactivities with customers are being documented for further reference.Operational CRM provides the following benefits: Delivers personalized and efficient marketing, sales, 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 customerinteraction with your company, regardless of the touch point. 10
  11. 11. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSThe operational part of CRM typically involves three general areas of business: Sales Force Automation (SFA)SFA involves of the company‟s critical sales and sales force management functions, forexample, lead/account management, contact management, quote management, forecasting,sales administration, keeping track of customer preferences, buying habits anddemographics, as well as performance management. SFA tools are designed to improvefield sales productivity. Key infrastructure requirements of SFA are mobilesynchronization and integrated product configuration. Customer Service and Support (CSS) CSS automates some service requests, complaints, product returns, andinformation requests. Traditional internal help desk and traditional internal inbound call-center support for customer inquiries are now evolved into the “customer interaction center(CIC), using multiple channels ( Web, phone/fax, face-to-face, kiosk, etc.). Keyinfrastructure requirements of CSS include computer telephony integration (CTI) whichprovides high volume processing capability, and reliability. Enterprise Marketing Automation (EMA)EMA provides information about the business environment, including competitors,industry trends, and macro-environmental variables. It is the execution side of campaignand lead management. The intent of EMA applications is to improve marketing campaignefficiencies. Functions include demographic analysis, variable segmentation, andpredictive modeling occurs on the analytical (Business Intelligence) side.Integrated CRM software is often also known as “front office solutions” This is becausethey deal directly with the customer. Many call centers use CRM software to store all oftheir customer‟s details. When a customer calls, the system can be used to retrieve andstore information relevant to the customer. By serving the customer quickly andefficiently, and also keeping all information of a customer in one place, a company aims tomake cost savings, and also encourage new customers.CRM solutions can also be used to allow customers to perform their own service via avariety of communication channels. For example, you might be able to check your bankbalance via your WAP phone without ever having to talk to a person, saving money for thecompany, and saving your time. 11
  12. 12. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Analytical CRMIn analytical CRM, data gathered within operational CRM and/or other sources areanalyzed to segment customers or to identify potential to enhance client relationship.Customer analysis typically can lead to targeted campaigns to increase share of customer‟swallet. Examples of campaigns directed towards customer are: Acquisition: Cross-sell, up-sell Retention: Retaining customers who leave due to maturity or attrition. Information: Providing timely and regular information to customers. Modification: Altering details of the transactional nature of the customer‟srelationship. Analysis typically covers but is not limited to: Decision support: Dashboards, reporting, metrics, performance etc. Predictive modeling of customer attributes Strategy and research.Analysis of customer data may relate to one or more of the following analysis : Contact cannel optimization Contact Optimization Customer Acquisition/Reactivation/Retention Customer Segmentation Customer Satisfaction Measurement / Increase Sales Coverage Optimization Fraud Detection and analysis Financial Forecasts Pricing Optimization Product Development Program Evaluation Risk Assessment and Management 12
  13. 13. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Collaborative CRMCollaborative CRM facilitates interactions with customer through all channels (personal,letter, fax, phone, web, e-mail) and supports coordination of employee teams and channels.It is a solution that brings people, processes and data together so companies can betterserve and retain their customers. The data/ activities can be structured , unstructured,conversational and/ or transactional in nature.Collaborative CRM provides the following benefits: Enables efficient productive customer interactions across all communicationschannels. 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. 13
  14. 14. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 3:TOOLS FOR CRMCUSTOMER DATABASEA good customer information system should consist of a regular flow of information,systematic collection of information that is properly evaluated and compared againstdifferent points in time, and it has sufficient depth to understand the customer andaccurately anticipate their behavioral patterns in future. The customer databases helps thecompany to plan, implement, and monitor customer contact. Customer relationships areincreasingly sustained by information systems. Companies are increasingly adding datafrom a variety of resources to their databases. Customer data strategy should focus onprocesses to manage customer acquisitions, retention, and development.Call CentreA call centre is a centralized office used for the purpose of receiving and transmitting alarge volume of requests by telephone.A call centre is operated by a company to administer incoming product support orinformation inquiries from customers. Outgoing calls for telemarketing, clientele, and debtcollection are also made. In addition to a call centre, collective handling of letters, faxes,and e-mails at one location is known as a contact centre.A call centre is often operated through an extensive open workspace, with work stationsthat include a computer, a telephone set/ headset connected to a telecom switch, and one ormore supervisor stations. It can be independently operated or networked with additionalcenters, often linked to a corporate computer network, including mainframes,microcomputers and LANs.Increasingly, the voice and data pathways into the centre are linked through a set of newtechnologies called computer technology integration (CTI)Most major businesses use call centers to interact with their customers. Examples includeutility companies, mail order catalogue firms, and customer supports for computerhardware and software. Some businesses even service internal functions through callcenters. Examples of this include help desk and sales supports. 14
  15. 15. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSSystems IntegrationWhile CRM solutions are front office automation solutions, ERP is back office automationsolution. An ERP helps in automating business functions of production, finance, inventory,order fulfillment and human resource giving an integrated view of business, where asCRM automates the relationship with customer covering contact and opportunitymanagement, marketing and product knowledge, sales force management, salesforecasting, customer order processing and fulfillment, delivery, installation, pre-sale andpost-sale services and complaint handling by providing an integrated view of the customerIt is necessary that the two systems integrate with each other and complement informationas well as business workflow. Therefore, CRM and ERP are complementary. This integration of CRM with ERP helps companies to provide faster customer servicethrough an enabled network, which can direct all customer queries and issues throughappropriate channels to the right place for speedy resolution.This will help the company in tracking and correcting the product problems reported bycustomers by feeding this information into the R&D operations via ERP.Data Mining for CRM: Some Relevant IssuesData Mining is an important enable for CRM. Advances in data storage and processingtechnologies have made it possible today to store very large amounts of data in what arecalled data warehouses and then use data mining tools to extract relevant information. Data mining helps in the process of understanding a customer by providing the necessaryinformation and facilitates informed decision-making. 15
  16. 16. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 4 :IMPLEMENTATION OF CRMHOW TO IMPLEMENT CRM?The implementation of a customer relationship management (CRM) solution is the besttreated as a six-stage process, moving from collecting information about your customersand processing it to using that information to improve your marketing and the customerexperience. Stage one – collecting information The priority should be capture the information you need to identify your customersand categorise their behavior. Those businesses with a website and online customer servicehave an advantage as customers can enter and maintain their own details when they buy. Stage two – Storing informationThe most effective way to store and manage your customer information is in a relationaldatabase – a centralized customer database that will allow you to run all your systems fromthe same source, ensuring that everyone uses up-to-date information. Stage three – Accessing informationWith information collected And stored centrally, the next stage is to make this informationavailable to staff in the most useful format. Stage four – Analysing Customer BehaviourUsing data mining tools in spreadsheet programs, which analyse data to identify patterns orrelationships, you can begin to profile develop sales strategies.customers and Stage five – Marketing more effectivelyMany businesses find that a small percentage of their customers generate a high percentageof their profits. Using CRM to gain a better understanding of your customer‟s needs,desires and self-perception, you can reward and target your most valuable customers. Stage six – Enhancing the customer experienceJust as a small group of customers often take up disproportionate amount of staff time. Iftheir problems can be identified and resolved quickly, your staff will have more time forother customers. 16
  17. 17. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSTYPES FOR IMPLEMENTING CRM Purchasing or Licensing SoftwareOwning the Software and running it on your own servers is ideal if you have highlycustomized enterprise resource planning, or ERP, or order management system, or OMS,software. If you have third-party software for your back-office processes (accounting,ERP, OMS, etc.) and your front-end systems (content management, merchandising,checkout, personalization engine), then you should be able to find CRM software thatworks with at least some of your systems without extensive customization. It‟sunavoidable that you will have to do some customization, but by working with vendorsthat have partnerships and interfaces with your existing vendors and their software – orwith vendors that have partnerships with the ASPs that host your existing solutions – youcan keep customization to a minimum. Customization is not only expensive when you firstinstall third-party software. But it‟s also expensive every time you try to apply a patch orvan upgrade.The advantages of purchasing or licensing the software and implementing it on your ownservers are that you have complete control over the software and over the data. Therearen‟t any of the privacy issues that might arise from having your data residing with a thirdparty. If you already have a customer service department with trained associates, and youdon‟t expect rapid growth or you believe you are equipped to handle rapid growth – thenthere‟s no point in paying to train CSRs elsewhere CRM via ASPOnly recently have CRM services become available via an ASP There are two kinds ofASPs providing CRM solutions. With one type, of which shop Tok is one example, theASP hosts its own CRM software. The other5 type hosts a best of bread third partysolution. The disadvantage of third type is that when something isn‟t working with thesoftware, you don‟t always the whether the problem rests with the ASP or with thesoftware ,and you can‟t necessarily get it fixed. with ASPs that5 hosts their own software,the vender hears you requirements for new features and your complaints about existingfunctionality.When you work with an ASP, the first thing you will want to know the degree to whichyou can customize the software so that your other business software will take to your CRMsoftware . after all ,your CSRs need to know what a customer has purchased to handle 17
  18. 18. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSinquiries from that customer, requiring between the order-management system and theCRM system. If the customer database doesn‟t talk to the CRM system, then yourmarketing department can‟t segment customers based on purchases and the use theanalytical tools frequently built into CRM software to make intelligent decisions on whatkind of promotions to make to attract the highest-value customers. Outsourcing Customer ServiceWhile you can outsource customer service, which is one component of CRM, you can‟toutsource business intelligence , which is the component of CRM. If the strategiccomponent of CRM. If you don‟t need to integrate with existing system, or you only needlimited integration, then the fastest route to take is to outsource your customer service to afull-service provider who will give you Web access to the business-intelligence tools. Mostfull-service customer-service providers will work with best-of-breed CRM vendors andoffers you a choice of CRM systems with which to manage your customers. Some are alsowilling to purchases and install the CRM software of your choice on their servers, but beaware that this will eliminate the advantage of a quickimplementation, lower entry costs and CRSs who already know the software. The costassociated with outsourcing CRM is usually a significant startup cost for developing yourmaterials, their training materials and your knowledge base, then a monthly fee basedeither on the number of hours of CRS you want available or on the number ofcalls/messages they receive for your site. The pay-as-you-go model can be very attractiveto smaller members. The ability to grow quickly can be an advantage for any size Webmerchant.CRITICAL SUCCESS FACTORS FOR IMPLEMENTATIONOF CRM SYSTEMSCritical success factors have been defined as the elements that make a project a success,and as the „events and conditions in a few key areas which absolutely must go right for thebusiness to succeed‟ These include trust, effective communication, and top managementsupport. For this to occur, proper measurement tools and metrics must be utilized toeffectively control the project. The Key CSF for CRM projects are:Key stakeholder support 18
  19. 19. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSSupport from all stakeholders in the organization, including top management and allmanagement levels, employees, government, suppliers, strategic partners and investors.Includes the timely reporting of the project status with accurate information.Sufficient ResourcesResources of money, equipment and expertise available with appropriate support structuresin place. Includes time and budget allocations for training. Clearly Defined ObjectiveA clearly defined mission with a set of defined goals and objectives communicated to allstakeholders through clearly defined communication channels, with alignment of projectand corporate goals. This is managed through a detailed project plan. Managing ChangeProject changes are implemented through formally defined process, with appropriateapprovals sought. Any scope changes are mutually agreed and documented, withappropriate analysis of resource requirements.Challenges of CRM ImplementationOrganizations face a number of key challenges in implementing CRM systems. Theseinclude: Methodology driven by end usersIT personal do not have knowledge or authority to influence corporate decisions makers Lack of customer centric cultureCRM projects are mostly driven by a functional head, such as a VP or sales/marketing, andrarely produce an enterprise view of customers. Lack of customer centric cultureAn acceptable return on investment will no be achieved if the organization does not have astrong customer centric culture 19
  20. 20. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER5:CRM RELATED CONCEPTS Knowledge ManagementKnowledge Management (KM) refers to a range of practices used by organizations toidentify, create, represent, and distribute knowledge for reuse and learning across theorganization.Knowledge Management programs are typically tied to organizational objectives and areintended to lead to the achievement of specific business outcomes such as improvedperformance, competitive advantage, or higher levels of innovation.While Knowledge Management programs are closely related to Organizational Learningby its Organizational Learning initiatives. Knowledge Management may be distinguishedfrom Organizational Learning by its greater focus von the management of specificknowledge assets and development and cultivation of the channels through whichknowledge flows. In recent years, Personal Knowledge Management (PKM) practice hasarisen in which individuals apply KM practice to themselves, their role in the organizationand their carrier development.Knowledge Management is a continually evolving discipline, with a wide range ofcontributions and a wide range of views on what represents good practice in knowledgeManagement. KNOWLEDGE MANAGEMENT PLAYS A KEY ROLE IN CRMSUCCESSCRM and KM were once considered entirely different disciplines, with the two sharinglittle but perhaps the same data warehouse hardware and a vague understanding that bothefforts were meant to improve business efficiency and customer satisfaction. It has becomeclear, however, that the two disciplines were really working toward the same goal, and thatto deliver continuous improvement to business clients, they would have to start speakingthe same language.KM focuses largely on finding the right solution to a problem that requires detailed insight,be it locating the right experts, at the right time, or ensuring that the solution to a complexproblem can be written once but reused many times. 20
  21. 21. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS Regain Management“The cost of acquiring a new customer is 9 to 12 times that of holding on to an existingcustomer.” – Philip KotlerGoal of customer regain management is to reinitiate valuable customer relationships,which have been already terminated. Regain management has to detect such „lost‟customers, select valuable relationships and attempt to regain them in an efficient way, forwhich a systematic process is necessary. Addition to this process structure, there is aninformation base needed , which enable the exchange of collected information along thecustomer regain process.- An incentive strategy tempts to regain business relation by offering customers someform of incentive like for example ticket for events, gifts & discounts.- A compensation strategy aims to compensate some disservices, which as the motivefor termination. For example the company could offer some form of vouchers.- A dialogue strategy tries to regain trust through a dialog.- A convincing strategy aims to persuade customers by means of use argumentations &Explanation of some product advantages. CRM in Supply Chain Management (SCM)Supply Chain management (SCM) is a business system of enterprise strategies, businessprocesses & information technologies for improving the planning, execution &collaboration of material flows, information flows,financial flows & workforce flows in the supply chain. SCM is supported by modularsoftware applications that integrate activities across organizations, from demandforecasting, product planning, parts purchasing, inventory control, manufacturing andproduct assembly to product distribution. In the context of SCM, where alliances &partnership are keys to success, CSM plays an important role in building long-termrelationships. The success of relationship depends upon sharing of saving from the supplychain, which may be reinvested to further enhance its efficiency & sustain the competitiveadvantage.GOALS OF SCM- To reduce inventory cost,- To increase sales,- To improve the coordination & the collaboration with suppliers, manufacturer &distributers. 21
  22. 22. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS CRM-ERP InformationERP‟s foundation, it is based on creating internally stable business functions & predictableprices control. The concept of ERP was the integration of all back-office functions so thatthe basic problems responsible for interception & breaks in the process where smooth out& the incompatibilities of the best-of-breed applications were eliminated or reduced. Thisdoesn‟t work with CRM which is external. How can you be in command of processedwhen they are based on your customers behavior? Conceptually, one important reason forCRM is real time response to the constantly liquid-shifting of customer demands, which isnot controlled internally at all. It also means the psychology of the front-office is quitedifferent from the psychology of the back-office.The simplest option is to hire a systems integrator to come in & integrate the systems.However, the obvious hazard here is that they are not only dealing with ERP & CRMapplications they may not know much about, they are also dealing with your legacysystem, which they know nothing about. But integrating all of that is what you could hirethe ERP vendor‟s CRM solution . The third solution is what many companies areincreasingly turning to Enterprise Application Integration (EAI)3. CRM Objectives in Banking SectorThe idea of CRM is that it helps businesses use technology and human resources gaininsight into the behavior of customers and the value of those customers. If it works ashoped, a business can: provide better customer service, make call centers moreefficient, cross sell products more effectively, help sales staff close deals faster,simplify marketing and sales processes, discover new customers, and increasecustomer revenues.It doesnt happen by simply buying software and installing it. ForCRM to be truly effective, an organization must first decide what kind of customerinformation it is looking for and it must decide what it intends to do with thatinformation. For example, many financial institutions keep track of customers lifestages in order to market appropriate banking products like mortgages or IRAs tothem at the right time to fit their needs. Next, the organization must look into all ofthe different ways information about customers comes into a business, where and howthis data is stored and how it is currently used. One company, for instance, mayinteract with customers in a myriad of different ways including mail campaigns, Websites, brick-and-mortar stores, call centers, mobile sales force staff and marketing andadvertising efforts. Solid CRM systems link up each of these points. This collecteddata flows between operational systems (like sales and inventory systems) andanalytical systems that can help sort through these records for patterns. Companyanalysts can then comb through the data to obtain a holistic view of each customerand pinpoint areas where better services are needed. In CRM projects, following datashould be collected to run process engine: 1) Responses to campaigns, 2) Shippingand fulfillment dates, 3)Sales and purchase data, 4) Account information, 5) Webregistration data, 6) Service and support records, 7) Demographic data, 8) Web salesdata. 22
  23. 23. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSNEEDS OF A BANKThe banks now need to find out what to sell, whom to sell, when to sell, how to sell andhow to be different to increase profitability. Banks need to differentiate themselves byadding value-added service, offerings and building long-term relationships with theircustomers through more customized products, enhanced value offerings, personalizedservices and increased accessibility. Banks also need to identify customers and productsthat would be most profitable and target customers with products that are most appropriateto their needs and serve the customers with greater cost efficiency.Banks also need to find out the avenues for increased customer satisfaction, which leads toincreased customer loyalty. This may be explained better from two initiatives bank took inthe past: Earlier what drove many bankers to invest in ATMs was the promise of reducedbranch cost, since customers would use them instead of a branch to transact business. Butwhat was discovered is that the financial impact of ATMs is a marginal increase in feeincome substantially offset by the cost of significant increases in the number of customertransactions. The value proposition, however, was a significant increase in that intangiblecalled customer satisfaction. The increase in customer satisfaction has translated to loyaltythat resulted in higher customer retention and growing franchise value. Bankers invested in Internet banking, believing that the Internet was a lower-costdelivery channel and a way to increase sales. Studies have now shown, however, that theprimary value of offering Internet banking services lies in the increased retention of highlyvalued customer segments. Again customer satisfaction drives the value proposition.Thus, banks need to retain existing customers with enhanced personalized services andproducts, which best suits their needs and satisfies them the most.WHAT IS E-CRM?In a simple term, it provides to companies a means to product interactive, personalized &relevant communication with customers across both electronic & traditional channels. Itutilizes a complete view of the customer to make the decision about the messaging, offers& channel delivery. It synchronies communications across disjointed costumer facingsystem. It focuses on understanding of customer activities, personalized relationshipsaffect the business. Advocate of E-CRM recognized that a comprehensive understanding ofcustomer activities, personalization, relevance, permission, time lines & metrics is a meansto an end optimize the value of your most important asset: your customer. 23
  24. 24. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSFor fortune 500 companies, evolving to E-CRM requires process & organizationalchanges, a suite of integrated applications & a non-trivial technical architecture to supportboth the E-CRM process & the enterprise applications that automate the process. Mid-sizecompany‟s benefits from less sophisticated & easier-it-implement, hosted solutions offeredthrough Application Service Provider. But regardless of the size of the firm, you have nochoice but to evolve to E-CRM quickly.E-CRM v/s CRM: The DifferencesBeing able to take care of your customer via internet or customer being able to take care ofthemselves online: That‟s the difference between CRM & E-CRM. It implies a myriad ofissues, questions, approaches, technologies & architecture that are different fromclient/server-based CRM. Many of them are issue general to the internet. Others are issuesrelated to the creation of applications for the internet. The third group is related directly toE-CRM & its actual value to business.Companies agree that E-CRM is critical to their business, but unfortunately very fewunderstands exactly what it is or how to evolve from their existing database marketingpractices to an E-CRM solution.Basic Requirements of E-CRM or Six “E” of E-CRM Electronic ChannelsNew electronic channels such as the Web and personalized e-Messaging have become themedium for fast, interactive and economic customer communications, challengingcompanies to keep pace with this increased velocity. EnterpriseThrough E-CRM, a company gains the means to touch and shape a customer‟s experienceacross the entire organization, reaching beyond just the bounds of marketing to sales,services and corner offices – whose occupants need to understand and assess customerbehavior. An E-CRM strategy relies heavily on the construction and maintenance of a datawarehouse that provides a consolidated, detailed view of individual customer behavior andcommunication history. 24
  25. 25. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS EmpowermentIn this new age, E-CRM strategies must be structured to accommodate customers who nowhave the power to decide when and how to communicate with the company and throughwhich channel, which ability to opt for or out of. Consumers decide which firms earn theprivilege to “talk” with them. EconomicsToo many companies execute communication strategies with little effort or ability tounderstand the economics of customer relationships and channel delivery choices. Yetcustomer economics drives smart asset allocation decisions, directing resources and effortat individuals likely to provide the greatest return on customer communication initiatives. EvaluationUnderstanding customer economics relies on a company‟s ability to attribute customerbehavior to marketing programs. A company should evaluate customer interactions alongwith various customer touch point channels and compare anticipated ROI against returns,through customer analytic reporting. Evaluation of results allows companies tocontinuously refine and improve efforts to optimize relationships between companies andtheir customers. External InformationThe use of Customer-sanctioned external information can be employed to furtherunderstand customer needs. This information can be gained from resources such as third-party information networks and webpage profiler applications, under the condition thatcompanies adhere to strict consumer opt-in rules and privacy concerns. 25
  26. 26. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 6:PROBLEMS AND DRAWBACKSThere are several reasons why a customer relationship management (CRM) solution mightnot have the desired results.There could be a lack of commitment from people within the company to theimplementation of a CRM solution. Adapting to a customer-focused approach may requirea culture change. There is a danger that relationships with a customers will break downsomewhere along the line, unless everyone in the business is committed to viewing theiroperations from the customers perspective. The result is customer dissatisfaction andeventual loss of revenue.Poor communication can prevent buy-in. In order to make CRM work, all the relevantpeople in your business must know what information you need and how to use it.Weak leadership could cause problems for any CRM implementation plan. The onus is onmanagement to lead by example and push for a customer focus on every project. If aproposed plan isn‟t right for your customers, don‟t do it. Send your teams back to thedrawing board to come up with a solution that will work.Trying to implement CRM as a complete solution in one goes is attempting but riskystrategy. It is better to break your CRM project down into manageable pieces by setting uppilot programs and short-term milestones. Consider starting with a pilot project thatincorporates all the necessary departments and group but is small and flexible enough toallow adjustments along the way. Don‟t underestimate how much data you will require,and make sure that you can expand your systems if necessary. You need to carefullyconsider what data is collected and stored to ensure that only useful data is kept.You must also ensure you comply with the eight principles of the Data Protection Act thatgovern the processing of information on living, identifiable individuals. For moreinformation, see their guide on how to comply with data protection legislation.Avoid adopting rigid rules which cannot be changed to be more flexible to the needs ofindividual customers. 26
  27. 27. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSREASONS FOR CRM IMPLEMENTATION FAILUREAn understanding of the challenges and critical success factors is paramount to projectsuccess. In this way, the organization is aware of those factors by which success can bemeasured, and will ensure the CRM system is implemented in a manner to satisfy allstakeholders. The main reasons for CRM failures include: Customer focusOrganizational culture is not customer focused, with limited involvement of customerfacing personnel in the design and implementation phase. Organizational ManagementLack of support and understanding from senior management, lack of CRM understanding,lack of communications and changing business needs. Project ManagementMisalignment between project and business requirements, with unrealistic goals, timelines,coupled with a lack of planning and insufficient reporting and control. Team MembersLack of support, incentives and lack of technical knowledge Data & warehouse requirementsPoor quality data, inconsistent data between different systems Technical FactorsShort term solution focus not aligned to long term architectural infrastructure growth, noprototyping or testing, misunderstanding technical requirements. 27
  28. 28. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS1 . THE CRM FRAMEWORKSchmitt‟s book “ Customer Experience Management” offers the following five stepsframework that should help managers understand and manage the “customer experience”Step 1: Analyzing the experiential world of the customer Analyze socio-cultural of the customer (needs/wants/lifestyle) Analyze business concept (requirements/solutions) Step 2: Building the Experiential platform Connection between strategy and implementation Specifies the value that the customer can expect from the product.Whereas steps 1 (Analysis) and 2 (Strategy) form the basis for CEM, steps 3, 4, 5 arefocusing on implementation. Step 3: Designing the Brand experience Experiential features, product aesthetics, “look and feel” e.g. logos Step 4: Structuring the customer interface All sorts of dynamic exchanges and contract points with customers Intangible elements (i.e. value, attitude, behavior Step 5: Engaging in continuous experiential innovation Anything thatimproves and customers personal lives and business customers working livesAnd finally, to bring all pieces together, a holistic approach is required that provides alinkage the different steps and connects them with the organization. 28
  29. 29. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSHOW DOES CEM TECHNOLOGY WORK?CEM Technology captures customer experience information across all customer touchpoints and feeds it back to the organization so that action can be taken to improveprofitability. At the beginning or end (or both) of an interaction, and within context, thecustomer is invited (automatically or manually) to provide their perspective via four or fiveshort questions. Done properly, this process will result in better than 80% customerparticipation and have a measurably positive effect on customers.Whether phone, email or Web channels, the experience information is collected withincontext of the interaction. The question that are delivered to the customer are specific tothat interaction type; the people, products and processes that were part of the interaction;and the customer. The questions are also conditional in nature and facilitate bothquantitative as well as qualitative experience information.CEM Technology accesses existing CRM data, productivity metrics, and incorporates keyinformation related to customer behavior and profitability. Information such as retentionrates, average purchase amounts, store sales, complaint and resolution rates, customersegments, etc. are all combined withcustomer experience information and analyzed/reported in real-time. The strength of aCEM system is in its ability to continually align company performance with customerneeds and behaviors, enabling companies to make effective, correct, and critical day-to-dayadjustments in resource allocation and execution- as well as enterprise-wide shifts instrategy.Customer Experiences can be categorized into three unique states. The state of thecustomer experience has implications on the type of information to communicate with andcollect from customers. The three states of customer Experience are: Normal Experience,critical Experience, and Unique Experience. 29
  30. 30. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS MANAGING CUSTOMER INTERACTIONExperience Key words Stage Objectives Profit ImplicationsTypesNormal 1. Education 1.Early 1. Establish 1.Reduce early phase 2. Competenc 2.Middl Positive customer turnover e e Perceptions 2. Reduce service and 3. Consistenc 2. Validate support costs y Expectations 3.Reduce research 3.Establish expense Trust ,loyalty, satisfaction 4.EngageCustom ersCritical 1. Opportunit 1.Early 1.Service 1. Reduce turnover y 2.Middl Recovery 2. Promote Positive 2. Flexibility e 2. Positive word-of-mouth 3. Problem 3.Matur Memorable endorsements resolution e ExperiencesUnique 1. Appropriat 1.Middl 1. Up –Sell 1. Increase average e timing e Products, purchase levels 2. Appropriat 2.Matur Services 2.Increase proportion e context e 2. Cross –Sell of high margin sales Products ,Services 30
  31. 31. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 7 :CRM IN INDIASoftware is to India what oil was to gulf. It is therefore no surprise that the Indiancompanies are jumping into the CRM bandwagon to seize a chunk of the global market,both products as well as services.With a vast talent pool; India is a fast becoming an important development base of CRMmajor companies. This trend is likely to increase in the future. Call centers, Cateringprimarily to the American and European markets are coming up in and around the metros.With the easing of infrastructure constraints, India is likely to emerge as a significantplayer in the segment.Companies in India are realizing the need for CRM and some of the forward thinking oneshave been strategically investing in CRM initiatives and relate activities. Even though,some industries like steel, aluminum and cement could get by without any active customermanagement, they realize that is now all history and that they have to do something tocreate and build relationships.So the awareness of CRM there. The first steps have been taken by many. The question iswhether you want to compare CRM programs of Indian companies with the standards andbest practices of players like Ikea and Marriot who have been torchbearers in this field.India has a long away to go. Indian companies would do well to realize that CRM cannotbe delegated to the marketing department.It has to be whole revolution within the entire organization. The entire organization fromthe chairman to the doorman has to be a galvanized to become a customer-orientedorganization. It‟s about training, learning, rescaling and the ability to adapt that willdistinguish the laggards from the winners. It needs a CEO who walks the talk, in otherwords CRM is an absolute necessity now for the smallest kirana store to a large player likeAmbuja Cement. One has 200 customers. But both can‟t afford to loose even a single oftheir customers, because the cost of creating a new customer is 5 to 10 times more than thecost of retaining an old, good customer. CRM is now an integral part of organizationalstrategy and overall business objectives.Has CRM in India been reduced to an empty buzzword that‟s tossed around so that acompany appears to be keeping up with the industry? Not entirely, because organizationslike Standard Chartered Bank, ICICI Lombard, BPL Telecom and Air-India havesuccessfully used these tools-and benifited. The difference lies in the way CRM has beendeployed at these organizations. It is a combination of technology and process change thathas worked. 31
  32. 32. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSAdoption of CRM by Indian companies is at an infancy stage. The CRM enabledcompanies include Modi Xerox, Tata Telecom, TVS Electronics, HP India, Tata Info Tech,Carrier Refrigeration, Tata Teleservices, Satyam Info way, Planet M, EpicenterTechnologies among many others.India even has a CRM Foundation in New Delhi, founded with the purpose of assessingand improving CRM practices. Founding members include Tata Telecom, Escotel, ModiXerox, Global Groupware, AC Nielsen, Carrier Aircon, and Motorala India, amongothers.Outsourcing CRM back offices. India is growing to be the back office of the world, andmany Indian companies are managing CRM operations for Fortune 500 and medium-sizedcompanies in USA and Europe. Now that the outsourcing market is mature, Indiancompanies may also begin to outsource for cost reduction.BPO’S IN INDIAThe business process outsourcing industry in India hasa grown by leaps and bounds and asits size increases so does its competitive advantage. Compared with 1996 when thisIndustry had started inroads into the United States with Outbound Telemarketingcampaigns, today the vehicle for these calls-the internet has become cheaper and morereliable for the average Indian business.The business has boomed to the extent that manypeople are now running BPO‟S out of their cyber cafes and houses in New Delhi.The sector witnessed considerable activity during 2004-05, including a ramping up ofoperations by major Indian and MNC players and stepped up hiring. The domestic BPOmarket, castalyzed by demand from the telecommunications and BFSI segments, matchedthe growth of BPO exports. The market experienced maturity and consolidation, a result ofnumerous mergers and acquisitions taking place within the sector. There were over 400companies operating within the Indian BPO space, including captive units (of both MNCsand Indian companies) and third-party services providers.The Indian BPO industry remains on a growth path, emerging as one of the key investmentmarkets in the country.BPO is one of the greatest global forces for improvement today.CRM outsourcing providers alone have a $30 billion market opportunity and businessesthat capitalize on the potential cannot only reduce cost, but also increase productivity andraise revenue significantly.BPO began as a way to significantly reduce labor costs for low-value or transactions activities (e.g., help desk calls, bill payments), but now, it‟s emergingas a way to deal with higher complexity, value-added activities. However, few companieshave realized the full range of benefits that BPO offers. To capture these benefitsorganizations need to do two things: outsource to improve productivity (not just costs) andcost-effectively identify emerging revenue opportunities. 32
  33. 33. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER :- 8CASE STUDIES ON CRM1.BHARATI TELE-VENTURES- TELECOM SECTORBharti Tele-ventures is one of the India‟s leading private sector telecom operators. Itscellular business, AIRTEL, is a leading mobile telephony brand. Like any Telco, Bharticonsiders information technology a key business enabler. For telecom IT is like bread andbutter. Bharti believes it plays two significant roles-it works as a support system, and it canalso be a business driver. Thus IT is very important to Bharti. It had a WAN in place with amix of leased lines and E1 and E3 lines. The company also has an extranet in placethrough which it extends different applications to its dealers and partners. Bharti have anextremely large infrastructure based on products from multiple vendors. This includes arange of high-end servers from Sun and HP. In the telecom business volumes are verylarge. They have millions of records and process them everyday, so far them storage is interabytes.Bharti also has a storage area network (SAN) in place. The main data centre is located inGurgaon, Haryana. As far as software is concerned, some of the applications that arerunning on its network are billing, fraud management, revenue assurance and datawarehousing. They also have some internal facing applications like Oracle Financial andOracle HRMS.THE CASE FOR CRMInitially, when Bharati started operations, the whole system was run manually. At thatpoint of time only 40 percent of their customer issues were getting resolved-this has nowgone up to about 90 percent.It is vital for them to manage the expectation of their customers and provide them withinnovative products and services in a manner which make them loyal. To achieve this,Bharti needed the right tools. It is this need that made them opt for a CRM (customerrelationship management)CHERRYPICKING A SOLUTIONToday Bharti is using the Oracle CRM platform. As part of their vision, they intend toprovide Airtel services anywhere and at any time. A customer should get the same quality 33
  34. 34. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSof service no matter which of their call centres he contacts. This has been their vision, andbecause of that they have gone in for a centralized application like CRM.Before choosing its CRM tool, Bharti evaluated many options. It considered factors likeproper workflow automation, facilitation of knowledge sharing, and integration with thebilling system. After a through evaluation exercise, it decided to go ahead with the OracleCRM platform.ROLL ITAfter starting its services in Delhi, Bharti acquired many circles and sought new licences inother circles; whenever they got a new licence, they implemented the CRM toolimmediately. But they had to put in a migration strategy in those acquired circles whichhad an existing subscriber base. The migration had to be done in such a manner that theexisting customer base did not suffer. The goal was that all circles would go live by thefirst quarter of 2004.The biggest challenge for Bharti was to have a unified process in place. Once this wasdone they faced the challenge of imparting training. They went in for such a large-scaleimplementation they faced problems. They also had certain technical difficulties duringimplementation, but they were able to overcome them.The CRM strategy at Airtel revolves around two aspects: operational CRM and analyticalCRM. The first is about helping their call centres in the workflow part, helping them intheir day-to-day activities. The second provides staff with the required information oncustomers; this is used for business development activities. Together they help Bhartiprovide better service to its customers.TAILOR-MADE SCHEMESOne of the primary things that Bharti has done with CRM is segmentation of customers,which has helped in providing customers more value for their money. Itwas important to understand and segregate customer needs depending on the product andservices is buying. One of the primary things that Bharti have done in this solution is thesegmentation of customers. With this, Airtel is now able to give its customers more valuefor money. With the help of CRM, they are able to provide customers different schemesand services depending on airtime usage. If the customer is a heavy user then they havesome specific schemes; for normal users they have other schemes. Apart from this, theyhave also managed to segregate their workflow with the help of the CRM tool. 34
  35. 35. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS2.WOCKHARDT- HOSPITAL AND HEALTH CARE SECTORWhen you aim to build a world class hospital, you need world-class processes in place.Keeping this goal in mind and to give patients better value for their money. WHHI waslooking for a solution that would allow the hospital to manage its patient and staff detailsdatabase efficiently. It also needed to connect specialists to the hospital network such thatthe doctors could monitor the patient remotely.The WHHI team, which consists of four people, found that the most suitable solution wasto put in place two inter-linked systems. The foursome considered a CRM solution custom-made to the hospital‟s needs and a network linking that they term E-ICU. This systemconnected the patients monitors to an RAS accessible over the internet.The CRM system WHHI put into place not only helps identify the right doctor for the rightoccasion, it now also generates reports. Plus it can sort categories of patients such that thehospital has now been able to start clubs of people with similar experiences.THE BEGINNINGTo develop and maintain a special relationship with doctors, patients, and corporate,WHHI required an easily manageable system that would catalog all the required details.Moreover, with the narrowing difference in service level at hotels and hospitalsinternationally, Vishal Bali, Vice President Operations, WHHI, believed that suchimplementations are required to create an ambiance of efficiency. The implementation wasalso required to track feedback to generate a patient satisfaction index.THE SOLUTIONTo meet the requirements, the hospital approached an outfit called Think Ahead, whichconceived, developed and implemented a CRM application to specifically meet thedemands of WHHI. The implementation generates feedback reports, occupancy reports,average length of stay, waiting and discharge reports. While all these reports were beingfiled even earlier, the solution has helped maintain and update all the reports on daily basis,obviating any chance of delay. The accuracy rate of the reports has seen a new high as aresult.More importantly the CRM solution has automated relationship management. It hasresulted in the creation of the Happy Hearts Club, a group of people who have undergonesimilar heart surgeries at WHHI. At the forum, patients share their experience andsometimes also learn from each other. 35
  36. 36. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSThe CRM solution also automatically forwards newsletters and relevant information tokeep in touch with doctors and patients. Vishal Bali, Vice President Operations explainedthe importance of this routine task: “Hospitalization should not be seen as an episode butas a patient hospital relation, it is not a one time transaction.” And the CRM solution hashelped with just that.E-HOSPITALBesides the CRM system, WHHI has developed an e-ICU. The e-ICU consists of ICUmonitors on the side of the bed. These are connected to a Windows 2000 Servers that islinked to Remote Access Servers (RASs). The RASs can be accessed over the internet viaa 2 MBPS line. The E-ICU allows doctors to consult specialists in life and deathsituations. A resident doctor can consult a senior consultant while at the operation tableand the CRM solution helps retrieve the most suited consultant for a given case. This wayall decisions can be collaborative. Furthermore, in case of a smaller problem the doctor isnot required to rush to the hospital. The remote system also means that every patient has 24*7 coverage from his/her doctor.E-VISITWHHI‟S association with think Ahead led to other creative initiatives. The first is theVirtual Family Visit. Relatives and friends can visit any patient online in a virtual patientroom. The system is capable of transferring audio, video, text, and images.Similarly, WHHI was also able to initiate a tele-medicine program. These are video linksestablished at medical colleges in the relatively less developed parts of India. The doctorsat WHHI use this link to address classes in these colleges as well as to make routinefollow-ups on chronic patients.SECURITY ISSUESWith so much data available over the internet it is natural that information security wouldbe a concern. To secure its network, the WHHI IT team has set up a hardware and softwarefirewall. The hardware blocks unauthorized access and the software firewall acts as anactive state packet filtering firewall. The Total Internet Security Suite scans inbound andoutbound network traffic.COST FACTOROverall, the implementation cost WHHI close to Rs2 million, according to Bali. Perhaps,the level of automation and improved efficiency due to this system could be used toestablish the system‟s ROI. However, Bali does not look at it from a profit perspective, butrather as a „Staying in Business‟ investment. According to him, as the standards forhospitals improve the world over, Wockhardt must set a standard in India. 36
  37. 37. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS3.HDFC-BANKING AND FINANCIAL SECTOROwing a a Home still remains to be the single most cherished dream for many Indianhouseholds and one need to be treated with great care while assisting people realize theirdreams. At HDFC, the element of care not only reflects in the very vision that prompted itsinception, but also in the manner in which the company relates to its customers. To HDFC,providing finance for housing is not merely about earning profits, but way to provide anessential and valuable service to the society.It all began with a thought that took shape in the mind of HDFC‟S founder, Late Shri H.T.Parekh, who built the organization on the core values of integrity, transparency and trust.Though HDFC enjoyed a monopoly when it started out, the company‟s firm focus hasalways been on customer care and satisfaction. It believed that the best strategies areestablished with long-term commitment and relationships with the customers.Since the company has always been dealing directly with its customer, this has helped itkeep in touch with the changing trends and customer expectations. Its experience and in-depth knowledge of the sector is a boon for its customers. HDFC understands that buying ahouse is an event which happens once in a lifetime for most and is the single largestinvestment; hence buying the property with the fullest knowledge is vital. While buying aproperty, where except in few cases the developers have established a brand, most buildersare local and relatively unknown, there are a number of issues and concerns a customer haswhen he deals with any developer.With over 28 years of experience in the real estate industry and business relations with thedevelopers, it has a through understanding of the market and this is passed on to thecustomers. It provides counseling through its property services on how and where to buy ahouse in India, the real estate prices and trends in the real estate market and any assistancethat may be required at various stages of property dealings. HDFC aims to bringcreditability and trust to the property deals.It has from time to time tied up with developers to bring special packages to its customersand reach out to them. It conveys the properties to the customers by visiting companies toput up special counters displaying new projects of builders, so they don‟t have to move outto locate a home and make presentations to address their financial concerns. This approachis also used in colonies with a large number of families. The company also arrangesproperty fairs where customers can visit, select the property and seal the deal immediately.At HDFC, product innovations are based on customer feedback and are aimed at customerconvenience. It was the first company to offer floating rate scenario turned conducive forcustomers and introduce part fixed part floating product enabling customers to hedge theirrisks in an uncertain interest environment. It was also the first to launch repayment optionthat supported housing loans on the basis of age and customer needs. As the first company 37
  38. 38. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSto computerize the home loan process, technology has always been a focus area for thecompany in its endeavour to simplify transaction for customers.All in all HDFC is a brand, which not only offers Housing Finance but “Total HousingSolutions”. Given the diverse portfolio of customers that HDFC caters to, the counselors atHDFC are trained to understand customer requirements and structure the loan to matchindividual concern. Departing from the usual norm of providing just loans, it offerscustomers a personalized counseling service to help customers encash on the vast pool ofknowledge that comes with its experience.It follows a single window concept where customers get legal and technical approvals byits experienced in-house counselors. This usually saves a lot of time and efforts forcustomers of obtaining these clearances from other authorities and save money as theprocessing and administrative charges cover all these expenses. Customer service at HDFCgoes beyond process handling, with counselors taking out time to understand the applicantsneeds, the demands of their growing families, the necessity to ensure savings foremergencies and then arriving at the right amount for them to borrow.HDFC‟S philosophy of care also engulfs its interaction with customers who have defaultedin repaying the loan. From beginning it followed a different model and setup a “follow-up”department to deal with delinquent borrowers instead of a “recoveries” section, believingthat individuals were basically honest and would pay back in time. Its debt collectionpolicy emphasizes on forecasting borrower confidence by understanding their crisis;discussing their repayment capacity- considering their income, number f dependents , henature of their expenses etc ; and after ascertaining the facts and the reasons for defaultwork out of solution , even reschedule the loan if required . though the policy deals with anegative situation , it has a strong value – based premise that ensures that theimplementation will not be unduly coercive . Infact ,the policy is built on courtesy , fairtreatment and persuation .The Home Loan Protection Plan ( a product of HDFC standard Life ) that HDFC offers toit home loan borrowers provides the customer the comfort of knowing that in case of theunfortunate death of the borrowers , a sum of money depending on the insurance cover willbe made available towards repaying the housing loan . for HDFC , its strength emanatesfrom its intrinsic value of customer orientation and care . they are the basis for all growthand development .ask at hand is to bridge the gaps and to provide the common man accessto resources to fulfill his basic dream . In its 28 years of orientations it has assisted 27 lakhfamilies own a home through loan approvals of over Rs.1,00,000 crores . As it movesalong taking small steps in this direction what makes the effort truly worthwhile is when itultimately benefits individuals and the effort truly worthwhile is when it ultimatelybenefits individuals and the society at large . 38
  39. 39. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKS3 . AXIS BANKAXIS bank was the first of the new private banks to have a begun operation in 1994 afterthe government of India allowed a new private banks to be established. The bank waspromoted jointly by administrator of the specified undertaking of the Unit Trust Of India(UTI) Life Insurance Corporation Of India (LIC) and other four PSU companies i.e.National Insurance Company Ltd., The New India Assurance Company. The OrientalInsurance Corporation and United Insurance Company Ltd.The bank today is capitalized to the extent of Rs. 355.74 Crore with the public holding(other than promoters) at 57.26%The banks registered office is at Ahmedabad and its central office is located in Mumbaipresently the bank has a very wide network of more than 572 branch offices and Extensioncounters. The bank had network of over 2468 ATMs providing 24 hrs day bankingconvenience to its customers. This is one of the largest ATM networking the country thebank has strength in both retail and corporate banking and is committed to adopting the best industry practices internationallyin order to achieve excellence.MISSION AND VALUES Our Mission Customer services and products innovation tuned to drive needs of individual andcorporate clientele. Continuous technology upgradation while maintaining human values. Progressive globalization and achieving international standards. Efficiency and Effectiveness built on ethical practices.Core Values Customer satisfaction through1. Providing quality service effectively and efficiently.2. “Smile, it enhances your face value” is a service quality stressed on.3. Periodic Customer Service Audits. Maximisation of Stakeholders value. Success through teamwork , Integrity and people. 39
  40. 40. CUSTOMER RELETIONSHIP MANAGEMENT IN BANKSCHAPTER 9 :CONCLUSIONCRM is basically the collection and distribution of “all” data to “all” areas of business .The data can then help market the company , help up sell to existing customer , understandcustomers better so that customers can be given better service and allows them to interactwith the company by whatever means they wish . Customer Relationships are achieved bythe whole company working together to give customers what they really want . CRM isbusiness strategy to create and sustain long term , profitable customer relationships.Successful CRM initiatives start with a business philosophy that aligns company activitiesaround customer needs . Only then can CRM technology be used as – as a critical enablingtool of the processes required to turn strategy into business results.CRM is now n integral part of the business vision / strategic roadmap of companies invirtually every industry domain and feeder- linked sectors . It is the various stages that leadto better understanding of all aspects of customer behavior ; interface points , transactionalissues and “ intangible” benefits proffered that helps a company differentiate itself fromothers in terms of leadership and market dominance in a particular space. The “ We Care “principle has to be embedded in the very vitals of the organization for long term benefits toaccrue and for “ delighted customers to keep coming back .Clearly , it is a matter of being in synch with customers „ changing needs that shapesbusiness success stories . Companies that continuously align and realign their brands ,products and services have a better chance of understanding their present as well as futureconsumers . Total customer orientation centered on customer understanding is bound toprovide long term customer value and by inference superior company and shareholdersvalue in terms of sustainable growth and profits .CRM applications will increasingly mimic the way away social environment works in theyears ahead .Finally , concluding about CRM in the following points : A strategy defined around producing value to fulfill business needs . A collaborative value chain of all institutions and processes needed to fulfill businessneeds . A set of measurements that reflects how successful ( or unsuccessful ) thecollaborative value chain has been in fulfilling customer‟s needs and the ability t adjust theprocesses to improve the rate of success. A system that provides insight in to customers so that improvements can be made . Access to all the services customer need for news , information , purchases , business ,delivery , and on to infinity , from wherever customer are in whatever circumstances . 40