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CHAPTER 1

INTRODUCTION

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CHAPTER 1: INTRODUCTION

BANKING IN INDIA

The first bank was established in 1923. Till today, the banking industry is

divided into 3 distinct phases:

A. 1786 to 1969- the first part

During the initial part, the development was slow and banks suffered periodic

failure thanks to lesser confidence of public. There have been around 1,100

banks and to contour their functioning and activities, the Government of India

came up with the Banking Regulation Act, 1949. The Reserve Bank of India

(RBI) was given intensive powers for the supervising of banking in India.

B. 1969 to 1991- Nationalizing banks and banking sector reforms

After Independence, the govt. implemented initiatives in banking sector. In

1955, the Imperial Bank of India was nationalized and commenced to supply

wide-ranging banking merchandise and services. The govt conjointly created

the bank of India, to handle banking transactions of the Union government and

state governments across the country.

In 1959, seven banks were nationalized and they became branches of the bank

of India. In late 90s 14 industrial banks within the country were nationalized. In

the second part of this phase, seven more banks were nationalized. With this,

80% of the banking sector in India came under the govt possession.

C. Reforms after 1991- New part of Indian banking system

As a part of the reforms method, this part introduced new products and facilities

within the banking sector. In 1991, a committee was created, under the

chairmanship of M Narasimha to figure for the relaxation of banking practices.

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Efforts are being put to supply satisfaction to customers, Phone banking and

internet banking to name a couple of. The complete system became simpler and

swift with cash transactions similarly.

CUSTOMER RELATIONSHIP MANAGEMENT

Today, the banks ought to work keeping in mind the position of the monetary

market and anticipate change within the market place and prepare themselves

consequently. As a strategic weapon, they're creating new resolutions to make

additional on their own strengths to explore new avenues of customers

Relationship Management.

Retention of previous business, similarly on seek for new one- CRM is that the

solely choice. From few years, the banking establishments are noticing the

important want of putting up greater thrust on this initiative for raising their

businesses.

Banks are currently realizing one amongst their best assets for profit growth in

rural and semi-urban arrangement, is customer relationships and its retention,

particularly in a very developing country like India. However, to create best use

of this resource, the banks have to be compelled to convert their branches from

dealings process centers into customer-centric service centers. This can win

bottom line business edges by holding the customers-the Most Profitable

quality.

Branches may even be accustomed inform and educate customers regarding

alternative offerings i.e. to advise and sell new monetary instruments like

shopper loans, insurance merchandise, investment firm merchandise, etc.

There is associate increasing realization among Indian banks that it not pays to

own a "transaction-based" operative model. Active efforts are on to develop a

relationship-oriented model of operations specializing in customer-centric

services.

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The biggest challenge our banks face these days is to ascertain customer

intimacy. Else, all alternative efforts towards operational excellence are

purposeless. The banks currently have to be compelled to guarantee through

their services that the purchasers stick with them as a major chunk of financial

gain for banks comes from existing customers, than from new ones.

Customer relationship management (CRM) solutions, if enforced and integrated

properly, will improve customer satisfaction levels. Information deposit will

facilitate in providing higher dealings experiences for patrons as information

deposit helps in transfer all the transactions returning from totally different

channels beneath an equivalent roof. Data processing helps banks analyses and

live customer dealings patterns and behavior. This all will facilitate plenty in up

service levels and finding new business opportunities.

IMPORTANCE OF CRM IN INDIAN BANKS

For long, Indian banks were beneath assumption, that their functioning was

centered on customers, just because that they had customers. These banks

dominated and were protected by laws that didn't permit free entry into the

world.

As one of the foremost rising market destinations, India can see foreign banks

are available in, grow and acquire. With the banking sector was gap up, they'll

endure by subsidence in quickly with the new rules of the sport, thereby posting

profits. For them came government bonds- associate sudden bonanza, during

which folks could massively invest.

Therefore, it's vital that Indian banks perceive this reality and re-focus on their

core quality — the customer. Specializing in customer Relationship

Management (CRM) is that the solely approach the industry will shield its

market share and boost growth.

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CRM would conjointly create Indian bankers notice that the aim of their

business is to "create associated keep a customer" and to look at the complete

business method as an integrated effort to get, create, and satisfy customer

wants.

Customer Relationship Management (CRM) within the Indian industry is key

factor in building a customer-centric organization. CRM links customer

information into one and logical customer depository. In banking, it's a key

component that permits a bank to develop its customer base and sales

capability. The target of CRM is to manage all aspects of customer interactions

in a very manner that permits banks to maximize profit from each glad

customer.

Increasing competition, liberation, and also the web have all contributed to the rise

in customer power. Customers, thus, visage with associate increasing array of

banking merchandise and services, expect a lot of from banks in terms of made-to-

order offerings, engaging returns, easy accessibility, and clear dealings.

Retaining customers could be a major concern for banking establishments that

underscores the importance of CRM. Banks will flip customer relationship into

a key competitive advantage through strategic development across a large time.

CRM could be an easy philosophy that places the customer at the center of a

business processes, activities and culture to boost customer’s satisfaction of

service and, in turn, maximize the profits for the organization. A winning CRM

strategy aims at appreciating wants of the customer and integration them with

the organization’s strategy, folks and technology and business processes.

Therefore, one in all the best ways that of launching a CRM theme, is to start

out with what the organization is doing currently and dealing out ways that to

boost its interface with its customers.

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CLASIFICATION OF CUSTOMER RELATIONSHIP MANAGEMENT

(CRM) SYSTEMS

Customer Relationship Management is often classified as under:

Operational CRM

Front-office business processes, wherever direct interaction with customers

through phone, fax, e-mail, etc. takes place Operational CRM comes into play.

The main points of each interaction with customers, as well as their necessities,

preferences, topics of dialogue etc., are kept within the customers’ contact

history which may be late retrieved, upon demand.

Analytical CRM

To analyze customer information generated by operational CRM applications,

perceive the customers’ behavior, and derive their true worth to the

organization. We have a tendency to use analytical CRM. This helps to

approach the purchasers with pertinent info and proposals to satisfy their wants.

Analytical solutions provided for many firms are integrated read of customer

across all channels and applications, campaign performance analysis, customer

profit analysis, cross-selling and up merchandising. Examples are information

deposit, on-line analytical process (OLAP), and data processing systems.

Collaborative CRM

For collaboration with customers, suppliers, and business partners and, thus,

enhancing sales and customer services across all the selling channels

cooperative CRM is employed. Its major goal is to boost the standard of

services provided to the purchasers, thereby increasing the purchaser’s loyalty.

It conjointly permits the corporate to synchronize and manage economical,

productive interaction with customers, prospects, partners, and internal

associates across all communication channels. The customers' viewpoint is

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taken care of at each dealings level therefore sanctioning higher service.

Cooperative CRM conjointly reduces net service prices by sanctioning net

collaboration. Samples of cooperative CRM applications are partner

relationship management (PRM), customer self-service and feedback, etc.

SELECTED BANKS FOR THE STUDY

Punjab National Bank

Punjab National Bank (PNB) is associate Indian monetary services company

primarily based in national capital, India. PNB is that the third largest bank in

India in terms of quality size. Established in 1895 as a personal financial

institution, it is presently the second largest state-owned depository financial

institution in India

CRM and PNB

Customer 1st – PNB’s CRM computer code presently employed in 1650

branches is additionally serving as their name for his or her numerous product

offerings the answer contains of modules for business prospect management,

lead management, activity management, product management, campaign

management, and business intelligence news.

Allahabad Bank

Allahabad Bank began operations in 1865; with head-quarters in urban center is

that the oldest joint stock bank in India. Supported in Allahabad in 1865 and as

of currently has over 2500 branches throughout India. Conjointly features a

branch in Hong Kong and a representative workplace in Shenzhen.

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State Bank of India

State Bank of India (SBI) is a multinational bank services company of India. A

government-owned corporation headquartered in Mumbai, Maharashtra with

assets of US$388 billion and 16,000 branches, as well as 139 foreign offices,

makes SBI, the most important banking and monetary services company in

India. The bank traces its ancestry to British India, through the Imperial Bank

of India, to the institution in 1806 of the Bank of Kolkata, creating it the oldest

depository financial institution within the Indian landmass.

SBI is a regional banking behemoth and has 2 hundredth market share in

deposits and loans among Indian industrial banks.

Canara Bank

Canara Bank is associate Indian state-owned bank headquartered in city,

Karnataka. Established in 1906, collectively of the oldest banks within the

country, the bank features a network of 3564 branches and 4000 ATMs unfold

across India. Wide proverbial for customer centricity and established in 1906, at

Mangalore, the bank was nationalized in 1969.

Today, geographical region Bank occupies a premier position within the

concord of Indian banks with associate unbroken record of profits since its

beginning. The Bank was stratified at 816 within the Forbes world 2000 list.

Bank of Baroda

Bank of Baroda is an Indian state-owned banking and monetary services

company headquartered Vadodara. It offers a variety of banking merchandise

and monetary services to company and retail customers through its branches

and thru its specialized subsidiaries and affiliates within the areas of retail

banking, investment banking, credit cards, and quality management. With a

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complete world business of 8,021 billion as of 31 March 2013, makes it the

second largest Bank in India.

In addition to its headquarters in its home state of Gujarat, it's a company

headquarters within the Bandra, Kurla complicated in metropolis. Supported

2012 information, it's stratified 715 on Forbes world 2000 list. It’s a network of

4283 branches (out of those 4172 branches are in India) and offices, and over

2000 ATMs.

The bank, alongside 13 alternatives major industrial banks of India, was

nationalized by the govt of India and has is known as a profit-making public

sector unit (PSU).

CRM at Bank of Baroda

Technology-based CRM: Technology plays the role of enabler in CRM

preparation. It permits Bank of Baroda to attain larger customization and higher

service at lower price. This helps in higher customer identification and quick

and convenience services to its customers.

Customer Loyalty Programs targets to be a customer centric organization and

build a good and long run relationships with its customers. It has four loyalty

cards supported worth of the purchasers like Pt, Gold, Silver and Bronze

thereby serving to in distinguishing the foremost valuable customers and

effectively coming up with the customer’s wants

Syndicate Bank

Syndicate Bank is one in all the oldest and major industrial banks of India. The

bank, alongside thirteen major industrial banks of India, is currently a

nationalized bank with a beginning capital of 8000 rupees. The primary branch

of the bank started its operations in 1928 at Udupi, in Dakshin South Dravidian

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district in Mysore state. By 1937, it secured its membership as a financial

organization at metropolis.

Yes bank

Yes bank is a personal bank in India headquartered metropolis. It absolutely

was supported in 2004; Yes Bank deals in company investment services. This

involves providing monetary recommendation to customers- company or

individual. Yes Bank conjointly competes within the South Asian industrial

banking market.

Commercial banking is equivalent of retail banking for industrial entities,

however is costlier and accounts yield less interest as company corporations do

not regard earning interest as a serious element of their want for banking

services. As of currently the bank had 430 branches and 951 ATMs with a

record size of agency 991 billion.

IndusInd Bank

Established in 1994, IndusInd Bank restricted could be a metropolis primarily

based Indian new generation bank. The bank offers industrial, transactional and

electronic banking merchandise and services. because the 1st among the new-

generation personal banks in India with its operations and a capital quantity of

Rs.100 large integer (Rs.60 large integer was given by the Indian Residents and

Rs.40 large integer was raised by the Non-Resident Indians), the bank has

specialized in retail banking services.

The Bank upgrades its support systems by introducing newer technologies like

CRM on its ever increasing network of branches all across the country thereby

meeting the worldwide benchmark.

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With 441 branches, and 796 ATMs unfold across the country with two

representative offices, in London and port, IndusInd Bank has metropolis with

the utmost variety of bank branches followed by national capital and Chennai.

Kotak Mahindra Bank

Established in 1985, it absolutely was antecedently called Kotak Mahindra

Finance restricted, a non-banking monetary company. In 2003, Kotak Mahindra

Finance Ltd, tally approved the license to hold on banking business. It’s the

primary company within the Indian banking history to convert to a bank.

Currently, it's over five hundred branches, over 1,000 ATMs and a consolidated

record of approx. US$ 2.9 billion. The Bank has its registered workplace at

Nariman point, Mumbai.

RATIONALE OF THE STUDY

Indian banking has come back an extended approach from tiny banks in hand

and managed by choose industrial homes to modern-day professionally

managed banks with customer centricity each publicly and personal sector.

With the arrival of latest age banks like HDFC & ICICI banks in Nineties,

public sector banks with their typical lack-luster ways that of functioning, felt a

brand new threat to their existence.

Private sector banks led to a paradigm shift within the approach, customers

were repaired by introduction of computer code primarily based customer

relationship management (CRM). As a result, public sector banks were forced

to follow the suite by taking CRM initiatives. Therefore CRM has become one

in all the foremost talked regarding tools for customer acquisition and retention.

There are divergent views regarding seriousness with that Indian public sector

banks have enforced the CRM initiatives.

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This study aims to seek out the customer perception regarding the CRM in

select public sector and select personal sector banks and its effectiveness in

customer acquisition and retention.

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CHAPTER 2

REVIEW OF LITERATURE

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CHAPTER 2: REVIEW OF LITERATURE

The numerous analysis papers and articles studied for the report highlighted the

subsequent problems associated with the customer relationship management

being practiced at various organizations:

1. CRM- A strategic tool

The study of the literature on the market raised several problems associated with

CRM; however the foremost necessary issue is that the treatment of CRM as a

strategic tool which will be useful in formulation of policies associated with the

purchasers. Dr. Nishikant Jha And Prof. (Mrs.) Shraddha Mayuresh Bhome

(May 2013), have done "A Study Of CRM-As A Strategic Tool Adopted By

Banks With reference to Axis Bank In Thane city." The study was conducted

through survey questionnaires that were filled by the customers of the Axis Bank.

The study of the paper showed that the purchasers of the bank were pleased with

the type of services provided by the Axis Bank at Thane town and conjointly that

the staff of the bank knew their job well. Within the finish few suggestions are

provided by the researchers to create operating of the bank less difficult and

satisfying for the purchasers. The result was diagrammatically shown through pie-

charts and bar-graphs. Similarly, Dr. Richa Raghuvanshi And Rashmi Tripathi

(2012) in their analysis paper ―Customer Relationship Management As A

Strategic Tool in the Indian Banking Sector: A Case Study Of Axis Bank At

Lucknow‖ aforementioned that Indian Banks are realizing that for attaining success

in a very competitive setting, they need to specialize in maintaining relationships

with customers. The most purpose of this study is to research whether or not banks

are extremely CRM as a way of securing competitive advantage or not. These results

were mentioned associated analyzed get an insight of however so much CRM is

strategically used to secure competitive advantage. The analysis style of this study is

exploratory research and totally different

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aspects with regards to CRM within the banking sector are extracted from

literature review.

2. CRM- influential in selecting banks in India

The second most significant issue that was identified was the influence CRM has

on people whereas selecting banks in India. Ajit Kumar Sahoo And Rashmita

Sahoo (April 2013), studied the role of "CRM In Indian Banking Sector",

through co relational analysis. They studied six different banks namely: SBI,

ANDHRA, ICICI, IDBI, CITI and HDFC. They conducted a study in accordance

with the subsequent hypothesis:

Ho: there's no vital influence on somebody within the selection of bank.

H1: there's vital influence on somebody persons within the selection of bank

According to the study, that followed, there happened to be 3 major factors that

had influence on an individual's mind while selecting the bank. Those 3 factors

were: quality service, effectiveness of selling program and convenience in

dealings.

Quality of service emerged because the 1st issue for choice of bank brands by the

respondents of SBI, Andhra Bank and CITI Bank,

Effectiveness of selling Program emerged as the issue the choice of the bank by

the respondents of IDBI and HDFC Bank.

Conveniently of dealings emerged because the most significant issue for the

choice of bank employed by the respondents of ICICI Bank.

3. Classification of CRM and managing CRM

Yatish Joshi And Ehtesham Ahmad (June 2013) in their paper "Customer

Relationship Management In Banks", have studied CRM through secondary

information provided by numerous researchers. They need talked regarding the

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varied styles of CRM: Operation, Analytical and collaborative. They need

conjointly mentioned regarding the requirement of CRM in managing the

customers, however will CRM be useful to the banking industry and also the

numerous success factors of CRM. They have explained however will the

methods of CRM be enforced and integrated with success within the banking

selling management. Some points from the paper are as follows:

Motivate customers for generating contacts and increasing revenue.

Understand customer’s wants.

Increase customer retention by increasing customer’s satisfaction.

Use technology to boost customer’s service. This will increase customer

differentiation and helps to deliver distinctive customer interaction.

Use CRM to create operating, customer-employee friendly.

Ensure that all staff is collecting the data on the CRM system.

4. CRM- Boundary-less organization- Relationship for banking

Dr. Shirmila Stanley (November 2012), in her paper, "New perspectives in the

Banking Sector-The CRM Way" studied the banks as boundary less

organization operating 24*7. She conjointly told that the banks of these days trust

more on the merits of "relationship for banking" for achievement. in step with her

study, CRM has become a brand new tool in service management, that is each

relationship primarily based & info intensive.

Banks are compelled to differentiate themselves by giving added service and

building long-term relationships with their customers. The CRM program should

be embraced and promoted by top management and supported with robust CRM

ensure guarantee organization wide success.

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She has also mentioned the seven Ps of the marketing management that are

evolving as a result of the combination of CRM within the working of the

organization. last she powerfully mentions the requirement of support from the

highest management for promoting CRM methods to achieve more customers and

provide satisfaction to the customers.

5. CRM- customer Satisfaction, customer Loyalty and customer worth

Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), in the paper,

"Customer Relationship Management And customer Loyalty: A Survey in the

Sector Of Banking," studied the CRM methods and their impact on customer

loyalty within the banking sector. They observed that a lot of glad the customer is,

more is his loyalty towards the organization and more is the revenue generated.

An advantage of a loyal customer is that with him he brings on new customers,

who if serviced satisfactorily could end up being loyal customers of tomorrow.

Throughout the study the varied findings led to the formation of the subsequent

flowchart:

Forming customer Learning customer needsProducing solutionspeculiar to the problem

database and complaints

Customer Relationship Management

Customer Satisfaction

Customer loyalty

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Padmaja R (2010) in her analysis paper ―A Study Of customer Relationship

Management In Banks With Special Reference To Bank Of India,

Hyderabad,‖ studied these days customers' buying choices aren't primarily based

on the standard of the product however conjointly with the link they need with

the corporate.

In today's world, we have a tendency to do business with people or teams whom

we may never meet in future and hence much less is understood personally to

person sense. customer Relationship Management is regarding about the texture

of comfort during this high technical school setting. This paper focuses on the

role of customer Relationship Management in banking sector and also the want

for CRM to extend customer worth in banks with special regard to Bank of India,

Hyderabad.

6. CRM- Levels of Service Quality

G.S.Popli and D.N.Rao (2009) in their paper ―Customer Relationship

Management In Indian Banks‖ talked regarding the service quality level being

provided by the banks. The study suggests that in case of the personal Sector

Banks, all the scales of service quality have scored higher values compared to the

general public Sector Banks. It conjointly shows that personal sector banks are a

lot of winning in implementing CRM methods. It conjointly points towards the

very fact that the chosen banks are ready to enhance the service quality for his or

her customers, creating them a lot of customer-oriented.

7. Influence of attitude, knowledge and skill on CRM

Monal Deshmukh (October 2012) in her analysis paper "Customer

Relationship Management In Indian commercial Banks" studied CRM

implementation on customer happiness and business performance.

A study of commercial banks of India reveals that CRM implementation is

connected with customer satisfaction and business conductance. it's unconcealed

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that frequent rate of going in touch with customers and recovery of services will

increase retention of customers. Attainment, regular contact and analysis of

customers direct towards improved customer loyalty (by repeat purchase, positive

word of mouth publicity) and employee sentiments. in an administrative purpose

of view, this analysis provides an overview of the impact of CRM efforts on the

magnitude of customer satisfaction and apparent business conductance.

8. CRM- A rising concern

Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013), researched on

"Customer Relationship Management As a corporate Strategy In Indian

Banking Sector: A Comparative Study of private And Public Sector Banks."

Their paper aims to research the aspect of criticism handling within the space of

CRM in banking sector in India. the most problems with discussion within the

paper are numerous styles of issues visaged by customers in each the public and

private banks, the frequency of making complaints and reasons for not making

complaints and also the expectation levels of customers in handling complaints.

The paper has primary information. It identifies behavioral factors that are related

to criticism problems within the banking services of public and personal sector.

The study is split into 2 parts: Pilot study and Main study. The results are

represented through bar-graphs. The study conjointly throws light on the key

areas of concern for the banking sector so as to take care of CRM as a strategic

tool:

Proper identification of activity concerns throughout a service interaction

Dealing effectively with enquiry connected system

Developing awareness tools

Training activity skills of staff

Proper development and implementation of criticism handling system.

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9. Impact of CRM on Firm Performance

Tim R. Coltman, Timothy M. Devinney, And David F. Midgley (2000) in their

analysis paper ―Relationship Of customer Relationship Management And

Firm Performance‖ examined the impact of CRM on firm performance. The

strategic CRM is conceptualized as a operate of the organization’s ability to guide

and enhance lower order capabilities that comprise physical assets, love it

infrastructure, and organizational capabilities, like human analytics and business

design. The results reveal a positive and vital path between a superior CRM

capability and firm performance. In turn, superior CRM capability is totally

related to human analytics and business design. However, the results counsel that

the impact of IT infrastructure on superior CRM capability is indirect and

altogether mediate by human analytics and business design. They jointly found

that CRM initiatives collectively action customer intimacy and diminution

trounce those taking a less balanced approach. Overall, this paper helped justify

why some CRM programs are additional prospering than others and what

capabilities are needed to support success. Their paper showed that customer

relationship management suffers once it's poorly understood, improperly applied,

and incorrectly measured and managed. This study exhibitionistic the mixture of

investment commitments in human, technological and business capabilities

needed to create a superior CRM capability. the precise extent of these

capabilities is existing indeterminate and can be guided by a strategic stress that

mixes shopper intimacy and operational excellence. By integration two colleges

of thought- capabilities and strategic emphasis- they have build lots of

managerially relevant theory of CRM performance that shows why CRM

programs are usually winning and what capabilities are needed to support

success.

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10. Influence of staff on CRM

C Rootman, M Tait & J Hieronymus Bosch (2007) in their paper ―The

Influence Of Bank Employees On Bank customer Relationship Management‖ did

an intensive analysis in services marketing. This paper investigates the influence

of staff on the customer relationship management (CRM) of banks. the first

objective of this paper is to research the influence of elite freelance variables,

namely perspective and knowledge ability, on the CRM of banks. an empirical

investigation with a structured questionnaire was conducted. The sample

consisted of 290 banking customers within the Metropolitan area and also the

response rate was 91.03%. As a result a big positive relationship was found to

exist between each the data ability and attitude of bank staff on a bank's CRM.

These relationships imply that a lot of intensive data ability and a lot of positive

attitudes of bank staff ends up in improved, maintained relationships between a

bank and its customers.

11. CRM in Investment Banks

Fan Wang, Fang Hu And Li Yu (2010) in their paper ―The Application Of

customer Relationship Management In Investment Banks‖ mentioned the

importance of CRM to the investment banks management. It compared the

appliance of CRM between domestic investment banks and also the foreign ones.

This study points out that whereas applying CRM, domestic investment banks

should clear their misunderstanding, base themselves on the purchaser’s center

and customers satisfaction, take economical measures to good CRM so notice the

increasing worth. They conjointly talked regarding the various CRM methods

which will be applicable in China.

12. CRM and customer Acquisition

Lawrence National Guard and Francis Buttle (2004), in their analysis paper

"Managing For winning customer Acquisition: associate Exploration‖ studied the

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recent attention dedicated by consultants, lecturers and practitioners to customer

retention, customer acquisition. customer acquisition is of major importance and

demands attention because the 1st stage of the customer life cycle. there's a

powerful analytical, coming up with and management stress to the majority of the

up to date customer management literature. This stress is projected into analysis

hypotheses that specialize in the primary stage of the life-cycle-customer

acquisition. Especially, they examined (1) government responsibility, (2)

budgeting for customer acquisition, (3) data of the political economy of customer

acquisition and (4) the preparation of CRM technologies. In summary, 2

overarching social control implications are often drawn from this study. First,

firms are usually not very advanced in their management of the core CRM

activity of customer acquisition as indicated by the low level of adoption of

management practices like budgeting, planning, government responsibility and

also the application of CRM technologies. Second, having a buying deal set up

(or, indeed, putt a manager in charge) by itself isn't spare to get smart acquisition

outcomes. it's important to own a frenzied customer acquisition budget. The

dominant social control implication is that if senior management is actually

serious regarding customer acquisition, it ought to be mirrored in a very budget

dedicated to the task. Their analysis shows that solely then is excellence in

customer acquisition achieved.

13. CRM- issues and Challenges

Shahzeb Ali Malik and Trevor Wood-Harper (2002) within the study

"Customer Relationship Management (CRM) In The Banking Sector Of

Pakistan: Issues And Challenges‖ found that CRM that has helped banks to

know the customers' current wants, what they did within the past, and what they

arrange to neutralize the long run to fulfill their own goals. though' most of the

banks within the developing countries such as: Islamic Republic of Pakistan,

India etc. have accomplished the importance of CRM and enforced it, the initial

investigations of the analysis show that quite variety of CRM goals doesn't turn

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out needed results and in some cases CRM has broken customer relationships.

Therefore, this paper highlights the issues and challenges within the banking

sector of Islamic Republic of Pakistan mistreatment CRM.

GAP AREAS

The analysis papers and articles summarized higher than have talked regarding

the varied styles of CRM, its quality in banks and alternative organizations. They

need conjointly enclosed down the varied issue poignant the CRM in banks, its

customer-centric impact and its impact on corporations and also the levels of

quality of service.

Though few of the researchers have talked regarding the customer acquisition and

retention, however haven’t placed enough stress on these factors. These factors

hold the foremost necessary position in any organization as a result of customers,

today, have the facility to either create business successful or failure, therefore

knowing all regarding customers is of utmost importance. New customers rely

plenty on how you handle your existing customers, as a result of within the

banking sector heap many customers depend upon past customer experiences

before selecting any bank. Therefore retention of consumers is a vital issue that

has not been studied in nice detail in afore mentioned papers.

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CHAPTER 3

RESEARCH METHODOLOGY

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CHAPTER 3: RESEARCH METHODOLOGY

Research Problem

Today, customers are a very important factor in companies’ business

development, with the power of changing the fate of short term or long term

goals of the company. Therefore enough knowledge of their expectations and

desire is very necessary.

The researches done so far in this prospect do not focus much on the factor of

customer acquisition and retention in banks. This study deals with the impact of

CRM on customer acquisition and retention in focus. The study will describe

the objectives of CRM in customer acquisition and retention which is very

important for any bank for survival in today’s competitive environment.

Purpose Of The Study

The purpose of the study is to find out the response of the customers to

customer relationship management (CRM) initiatives taken by select public

sector and private sector banks. The banks which are being considered for the

study are:-

1. Punjab National Bank

2. State Bank of India

3. Allahabad Bank

4. Canara Bank

5. Bank Of Baroda

6. Syndicate Bank

7. Yes Bank

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8. IndusInd Bank

9. Kotak Mahindra

Research Objectives

The research objectives are as follows:

a. To find out the level of awareness in the customer of select public sector

banks about the CRM initiatives taken by these banks.

b. To find out the effectiveness of CRM in increasing the customer satisfaction

and loyalty in the select public sector banks.

c. To find out if there has been any positive impact on customer acquisition

and retention as a result of CRM initiatives taken by these banks.

Research Design

A combination of Exploratory and Descriptive research design would be used

in the research work. Exploratory research would be applied to identify the

customer preferences which attract them to opt for a bank for various services.

Research Question

Whether customer relationship management initiatives taken by select banks

has impacted their level of satisfaction or not?

Sampling Design

Sample (Participants): The sample for this research comprises of customers of

the select banks

Type of Sampling: Convenience and Snowball sampling would be used for the

study.

Sample Size: The sample size is 300 customers from six select public sector

and private sector banks.

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Data Collection

Data Type:

Data type proposed for the research is a combination of primary and secondary

data. The primary data would be collected through a detailed questionnaire,

which would be circulated in the proposed sample area and secondary data

would be collected through the thorough study of the research journals, reports,

whitepapers and cases previously published on the topic.

Research Instrument

A structured questionnaire will be used for collection of primary data. The

instrument would be tailored for the research based upon the objectives. The

instrument would be put through a pilot test for reliability testing through the

responses collected from 300 respondents.

Tools Used

The major tools used for analysis are as follows:

1. Descriptive Statistics: Bar graphs and Pie charts.

2. Correlation to find the type of relationships

3. Crosstabs to find the relation between two variables

Pilot Study

Validating Questionnaire through Pilot Testing: Pilot survey will be conducted

with the customers via internet and mails which will help to have incited to the

strength and weakness of questionnaire. The resold pilot survey suggestion

obtained from the respondents will help in making valuable and effective

changes in the questionnaire.

28

Procedures

Survey methodology seeks to identify principles about the design, collection,

processing and analysis of surveys in connection to cost and quality of survey

estimates. It focuses on improving quality within cost constraints or

alternatively, reducing costs for a level of quality. The entire study will be

conducted in three phases. In the first phase, the researcher will study the

various CRM strategies adopted by the select public sector banks in order to

acquire new customers and retain the old ones. In the second phase, the

researcher will try to find out the impact of the CRM strategies on customer

loyalty and satisfaction level and how do the customers perceive the impact. In

the third phase, the researcher will propose various ways through which the

relationship between customer and their banks can improve.

The following steps will be followed:

1. Visit to the select public sector banks.

2. Identify and select potential sample members

3. Contact sampled individuals and collect data from them

4. Evaluate and test questions

5. Tabulate the responses and performs various tests

6. Analyze the data and prepare inference out of the analysis

Limitations Of Research Methodology

1. Since the research will be conducted as an individual, a lot of money

would not be spent on the research.

2. There might be some respondents who don’t fill the questionnaire or may

give leave some questions unanswered.

29

3. Time and reach will be major constraints as time will not permit to gather the

information from various types of customers from other branches of the same

bank as well as from other banks.

30

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

31

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

In order to ascertain the importance of CRM in banks, a study was conducted,

with a sample size of 352. To ensure effectiveness of the study and in order to

obtain a clear picture a questionnaire with 25 items was designed. The

responses were compiled on a data sheet and with the help of software, the

following results were drawn.

Table 4. 1 Detailed information about customers

Valid CumulativeFrequency Percent Percent Percent

Valid yes 280 79.5 79.5 79.5

no 72 20.5 20.5 100.0

Total 352 100.0 100.0

Fig 4.1 Detailed information about customers

Interpretation: From the figure we can say that 79.5 percent customers are asked

their detailed information by the banks before entering into a relationship.

32

Table 4.2 Awareness of CRM activities

Valid CumulativeFrequency Percent Percent Percent

Valid taking periodic38 10.8 10.8 10.8feedback

offering a22 6.2 6.2 17.0product/service required

assigning a relationship 24 6.8 6.8 23.9manager

waiver of certain 5 1.4 1.4 25.3fee/charges

none 263 74.7 74.7 100.0

Total 352 100.0 100.0

Fig 4.2 Awareness of CRM activities

Interpretation: The table shows that 74.7 percent customers are not aware of the

listed CRM activities in their banks

33

Table 4.3 Provision of Relationship Manager

Valid CumulativeFrequency Percent Percent Percent

Valid yes 226 64.2 64.2 64.2

no 126 35.8 35.8 100.0

Total 352 100.0 100.0

Fig 4.3 Provision of Relationship Manager

Interpretation: The figure shows that 64.2% customers have been provided with

a relationship manager.

34

Table 4.4 Approached relationship manager or branch

manager for problems

Valid CumulativeFrequency Percent Percent Percent

Valid yes 201 57.1 57.1 57.1

no 151 42.9 42.9 100.0

Total 352 100.0 100.0

Fig 4.4 Approached relationship manager or branch manager for problems

Interpretation: The table shows that 57.1 percent customers have approached

the relationship manager or bank manager when faced a problem.

35

Table 4.5 Resolution of problem or complaint

Valid CumulativeFrequency Percent Percent Percent

Valid immediately 179 50.9 50.9 50.9

within 24 hrs 34 9.7 9.7 60.5

within 48 hrs 65 18.5 18.5 79.0

within 72 hrs 7 2.0 2.0 81.0

morethan a 37 10.5 10.5 91.5week

not applicable 30 8.5 8.5 100.0

Total 352 100.0 100.0

Fig 4.5 Resolution of problem or complaint

Interpretation: The bar graph shows that 50.9 percent of the reported problems

get solved immediately.

36

Table 4.6 Bank takes feedback on resolution of problem

Valid CumulativeFrequency Percent Percent Percent

Valid yes 98 27.8 27.8 27.8

no 254 72.2 72.2 100.0

Total 352 100.0 100.0

Fig 4.6 Bank takes feedback on resolution of problem

Interpretation: 72.2 percent do not take feedback from their customers once

their problem is resolved.

37

Table 4.7 Level of satisfaction and loyalty

Valid CumulativeFrequency Percent Percent Percent

Valid yes 159 45.2 45.2 45.2

no 193 54.8 54.8 100.0

Total 352 100.0 100.0

Fig 4.7 Level of satisfaction and loyalty

Interpretation: 54.8 percent customers say that their level of satisfaction

and loyalty is not affected by the customer relationship management initiatives

taken by their bank;

38

Table 4.8 Customers recommending their banks to their family and friends

Valid CumulativeFrequency Percent Percent Percent

Valid yes 325 92.3 92.3 92.3

no 27 7.7 7.7 100.0

Total 352 100.0 100.0

Fig 4.8 Customers recommending their banks to their family and friends

Interpretation: 92.3 percent customers will recommend their bank to their

family and friends whereas 7.7 percent customers will not recommend their

bans to their family and friends.

39

Table 4.9 Overall satisfaction level

Valid CumulativeFrequency Percent Percent Percent

Valid not at all 27 7.7 7.7 7.7

somewhat 67 19.0 19.0 26.7

fully251 71.3 71.3 98.0

satisfied

very happy 7 2.0 2.0 100.0

Total 352 100.0 100.0

Fig 4.9 Overall satisfaction level

Interpretation: Percentage of fully satisfied customers is highest (71.3) followed

by somewhat satisfied and then very happy. The percentage of not at all

satisfied in select banks is (7.7)

40

Table 4.10 Cross tab on level of satisfaction &

recommend bank to family and friends

Count

recommend

yes no Total

satisfaction level and yes 159 0 159loyalty

no 166 27 193

Total 325 27 352

Fig 4.10 Cross tab on satisfaction level and loyalty & name of bank

41

Fig 4.11 Cross tab on Recommend bank to family and friends & name of bank

Interpretation: The above figures study a relationship between satisfaction

level and recommendation to family and friends. The figure shows that

customers of SBI are most satisfied customers and all of them recommend their

bank to their family and friends.

42

Table 4.11 Cross tab on relationship manager and response to the problem

Count

if yes, what response

prompt andsympathetic courteous evasive not applicable Total

provided with yes 11 153 0 62 226relationship manager

no 0 32 5 89 126

Total 11 185 5 151 352

Fig 4.12 Cross tab on Provision of Relationship manager & name of bank

43

Fig 4.13 Cross tab on Kind of response to the problem & name of bank

Interpretation: The relationship managers of Punjab National Bank are

prompt and courteous

44

Table 4.12 Cross tab on relationship manager & problem

resolution

Count

provided with relationshipmanager

yes no Total

duration of problem immediately 112 67 179resolved

within 24 hrs 34 0 34

within 48 hrs 38 27 65

within 72 hrs 7 0 7

more than a 28 9 37week

not applicable 7 23 30

Total 226 126 352

45

Fig 4.14 Cross tab on relationship manager & problem resolution

Interpretation: The figure shows that of the customers who have been

provided with a relationship manager have their problems solved immediately.

Fig 4.15 Detailed bank-wise provision of relationship manager

Interpretation: This figure gives detailed information on provision of a

relationship manager at each select bank

46

Fig 4.16 Detailed bank-wise duration of problem solved

Interpretation: According to the figure, customers of Punjab National bank get

their problems solved immediately, followed by State Bank of India.

47

CHAPTER 5

CONCLUSION, RECOMMENDATIONS AND LIMITATIONS

48

CHAPTER 5: CONCLUSION, RECOMMENDATIONS AND

LIMITATION

The analysis of the different variables was source to the following findings and

results.

OBJECTIVE 1: To find out the level of awareness in the customer of select

public sector banks about the CRM initiatives taken by these banks.

74.7 percent customers of all select banks are not aware of the listed CRM

activities that are being followed by their banks (Fig 4.2).

71.7 percent customers of select public sector banks are not aware of

CRM initiatives that are being followed by their bank.

97.5 percent customers of select private sector banks are not aware of

CRM initiatives that are being followed by their bank.

OBJECTIVE 2: To find out the effectiveness of CRM in increasing the

customer satisfaction and loyalty in the select public sector banks.

57.1 percent customers approach a relationship manager when they face

any problem (Fig 4.4)

71.3 percent customers are fully satisfied with their bank (Fig 4.9)

93.5 percent customers of public sector will recommend while 82.5

percent customers of private sector will recommend.

72.1 percent customers of public sector are fully satisfied while 65 percent

customers of private sector are fully satisfied.

OBJECTIVE 3: To find out if there

customer acquisition and retention as a

these banks.

has been any positive impact on

result of CRM initiatives taken by

49

67.6 percent customers have prompt and courteous response to the problem(Fig

4.13)

92.3 percent customers will recommend their banks to their family and friends

while 7.7 percent customers will not (Fig 4.8)

Other Findings

79.5 percent customers are asked their detailed information by the banks before

entering into a relationship.(Fig 4.1)

50.9 percent of problems are solved immediately.(Fig 4.5)

RECOMMENDATIONS

Customer Relationship Management is an important factor for any banking system to raise their profit and also to maintain long-lasting relationships with their customers. CRM strategies also serve as a measure for customer satisfaction level and loyalty. Here are some recommendations based on the findings of the study that can help the banks to make their CRM stronger and economically fruitful.

74.7 percent customers of the select public sector and private sector banks are

not aware of the CRM initiatives taken by their banks. Thus the banks should

take some steps as mentioned below to make the customer aware of it:-

1. Inform their customers through regular e-mails, to encourage them to

invest more in customer relationship management.

2. Send text messages to their customers, to keep them updated of any activity

that is happening or going to happen in the bank, in near future.

As the employees of the bank are not aware as to how to deal with the

customers of the bank, the bank should take some steps like conducting regular

training programs for their employees and train them as to how they should deal

with customers of the bank.

50

LIMITATIONS

The data collected for the research is related to the Delhi-NCR region and

thus is a very region specific study, thus constricting the findings only to Delhi-

NCR.

It was very tricky to find out the correct answers as the respondents found

the procedure of filling the questionnaire cumbersome.

The customers were not ready to reveal their personal information in

anticipation of the followed-up procedures.

51

CHAPTER 6

REFERENCES

52

CHAPTER 6: REFERENCES

1. Tim R. Coltman, Timothy M. Devinney, and David F. Midgley (2000)

―Relationship Of Customer Relationship Management And Firm Performance

2. Shahzeb Ali Malik and Trevor Wood-Harper (2002) Customer Relationship

Management (CRM) In The Banking Sector Of Pakistan: Problems And

Challenges

3. Lawrence Ang and Francis Buttle (2004), ―Managing For Successful Customer

Acquisition: An Exploration, Journal of Marketing Management, October 2004

http://www.buttleassociates.com/pdf_files/Managing%20for%20successful%20

customer%20acquisition.pdf

4. C Rootman, M Tait & J Bosch (2007) ―The Influence Of Bank Employees On

Bank Customer Relationship Management

5. G.S.Popli and D.N.Rao (2009) ―Customer Relationship Management In

Indian Banks‖

6. Fan Wang, Fang Hu And Li Yu (2010) ―The Application Of Customer

Relationship Management In Investment Banks

7. Padmaja R (2010 ―A Study Of Customer Relationship Management In Banks

With Special Reference To Bank Of India, Hyderabad‖

8. Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), "Customer

Relationship Management And Customer Loyalty: A Survey In The Sector Of

Banking‖, International Journal of Business and Social Science Vol. 3 No. 3;

February 2012

http://ijbssnet.com/journals/Vol_3_No_3_February_2012/30.pdf

53

9. Dr. Richa Raghuvanshi and Rashmi Tripathi (2012) ―Customer Relationship

Management As A Strategic Tool In The Indian Banking Sector: A Case Study

Of Axis Bank At Lucknow

10. Dr. Shirmila Stanley (November 2012), "New Perspectives In The Banking

Sector- The CRM Way

11. Monal Deshmukh (October 2012), "Customer Relationship Management In

Indian Commercial Banks‖, International Journal of Science and Research

(IJSR), India, Volume 1 Issue 1, October 2012

http://www.ijsr.net/archive/v1i1/IJSR10120104.pdf

12. Ajit Kumar Sahoo and Rashmita Sahoo (April 2013), "CRM In Indian Banking

Sector‖, VSRD International Journal of Business and Management Research,

Vol. 3No. 4April 2013

http://www.vsrdjournals.com/MBA/Issue/2013_04_April/Web/1_Ajit_Kumar_

Sahoo_1576_Research_Article_VSRDIJBMR_April_2013.pdf

13. Dr. Nishikant Jha and Prof. (Mrs.) Shraddha Mayuresh Bhome (May 2013 ), "A

Study Of CRM-As A Strategic Tool Adopted By Banks With Reference To Axis

Bank In Thane City.‖, Indian Journal Of Applied Research, Volume : 3 | Issue :

5 | May 2013 | ISSN - 2249-555X

http://www.theglobaljournals.com/ijar/file.php?val=MTUxNw

14. Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013) "Customer Relationship

Management as a Corporate Strategy in Indian Banking Sector: A Comparative

Study Of Private And Public Sector Banks, Journal of Business Management &

Social Sciences Research (JBM & SSR), ISSN No: 2319-5614, Volume 2, No.

3, March 2013.

http://borjournals.com/Research_papers/Mar_2013/1191M.pdf

54

15. Yatish Joshi and Ehtesham Ahmad (June 2013) "Customer Relationship

Management In Banks‖, VSRD International Journal of Business and

Management Research, Vol. 3 No. 6 June 2013

http://www.vsrdjournals.com/MBA/Issue/2013_06_June/Web/8_Yatish_Joshi_1

936_Research_Communication_VSRDIJBMR_June_2013.pdf

55

APPENDIX

56

QUESTIONNAIRE

1. In which of the following banks do you have your account?

a) Punjab National Bank

b) State Bank of India

c) Allahabad Bank

d) Canara Bank

e) Bank Of Baroda

f)Syndicate Bank

g) Yes Bank

h) IndusInd Bank

i) Kotak Mahindra

2. For how long have you been banking with the above bank?

a) Less than 1 year

b) 1 -2 years

c) 2 -3 years

d) More than 3 years

3. Did the bank take detailed information/data about your personal profile and

family at the time of opening the account?

a) Yes

b) No

4. What services/products are you availing from the bank?

a) Deposits

Savings account

57

Current account

Recurring deposit

Fixed deposit

Flexi deposit

(Combination of fixed deposit and a linked savings

A/c) b) Loans and advances

Home loan

Automobile loan

Personal loan

Education loan

Business loan

Any other loan

c) Other products/services

Locker

Wealth management services

Insurance products

Mutual Fund products

Any other (please specify)

58

5. Is your bank providing you some special services such as:-

Category Yes No

Pick up of checks/cash from

your residence

Delivery of cash at your

residence

Services of wealth manager at

your residence

Any other service (please

specify)

Does the bank charge you for the above services?

a) Yes

b) No

6. Are you aware of any of the following customer relationship management

(CRM) initiatives taken by your bank to provide you service as per your

requirements?

a) Taking periodic feedback from you, about the quality of services.

b) Offering a product/ service required by you

c) Assigning a relationship manager

d) Invitation for a cinema show/ cultural event

e) Waiver of certain fee/charges

59

7. Is there any minimum balance requirement in your account?

Yes

No

If yes, what is the requirement? –

8. Have you been provided a relationship manager?

a) Yes

b) No

If yes, how frequently does he/she contact you on his/her own?

a) Once in a month

b) Once in 2 months

c) Once in 3 months

d) Once in 6 months

e) Once in a year

f)Never contacts

9. Have you ever approached your relationship manager or the branch manager for

any problems faced by you in your dealings with the bank?

a) Yes

b) No

If yes, how was the response to your problem?

a.Sympathetic

b. Prompt and courteous

c.Evasive

d. No concern

60

10. How soon your problem/complaint was resolved?

a) Immediately on the spot

b) Within 24 hours

c) Within 48 hours

d) Within 72 hours

e) Within a week

f)More than a week

g) Not resolved

11. Did the bank take your feedback about your experience in connection with the

resolution of your problem/complaint?

a) Yes

b) No

12. Did you face the same problem again and you had to approach the bank for the

same?

a) Yes

b) No

If yes, after how much time?

13. For which of the following products does the bank approach you?

a) Gold coins

b) Loans

c) Credit Card

d) Mutual funds

e) Insurance policy

f) Fixed deposits

g) Any other (please specify)

61

14. Does the bank approach you for getting the feedback on your satisfaction level

with their services?

a) Yes

b) No

If yes, what is the frequency of feedback collection?

Once in a month

Once in 2 months

Once in 3 months

Once in 6 months

Once in a year

15. Has your bank introduced any reward scheme/bonus point scheme on any of its

products which you have availed?

a) Yes

b) No

16. If answer to question no. 15 is yes, has this reward scheme increased your

satisfaction level with the bank?

a) Yes

b) No

17. Did you ever switch your bank?

a) Yes

b) No

If yes, why

18. Do you think your decision to change the bank was right i.e. you never faced

the same problem with your present bank?

a) Yes, my decision was right. I’m happier with my present bank

62

b) No, I am facing similar problems/some other problems with my present bank 19.

Do you think that customer relationship management (CRM) initiatives taken

by your bank has contributed to your satisfaction level and loyalty to the bank?

a) Yes

b) No

20. Have you or will you recommend your bank to your family and friends for

opening an account or availing other services?

a) Yes

b) No

21. How will you rate your bank on the following parameters

Category HighlySatisfied Neutral Dissatisfied

Highlysatisfied dissatisfied

Prompt andcourteous service

Speed ofproblem/complaintresolution

Availability of awide variety ofproducts andservices

Provision of arelationshipmanager and hisattitude

TechnologicalInnovation

Your recognition asa valued customer

63

Any other service (please specify)

22. How satisfied are you with the following facilities at your Bank’s Branch?

CategoryHighly

Satisfied Neutral DissatisfiedHighly

satisfied dissatisfied

Clean & comfortableenvironment

Personalized services

Easy availability ofinformationbrochures/payslips/forms etc

Automatic machinesfor cheques/cashslips in bank atconvenient locations

23. Do you think that your bank caters all your banking needs?

Yes No

24. Does your bank conduct any of the following activities?

a) Customer Meet

b) Customer Lunches

c) Customer Awards

d) Tickets/Invites for cultural events

25. How would you rate your overall satisfaction level with the services of the

bank?

64

a) Not at all satisfied

b) Somewhat satisfied

c) Fully satisfied

d) Very happy

26. What are your suggestions for increasing your satisfaction and loyalty towards

your present bank i.e. what extra services/facilities your bank should provide

you?

Customer Profile

Name

Age

a) 20-30

b) 31-40

c) 41-50

d) 50 above

Gender

a) Male

b) Female

Postal/email address

Telephone No.

Profession

65

1. Student

2. Self-employed

3. Government job

4. Private job

5. Retired

6. Home Maker

Income

1. 20,000 – 30,000 p.m.

2. 30,000 – 40,000 p.m.

3. 40,000 – 50,000 p.m.

4. 50,000 – 1, 00,000 p.m.

5. More than 1, 00,000 p.m.

66

SYNOPSIS

AMITY BUSINESS SCHOOL

Dissertation Synopsis

Name: Arunima Program: MBA-HR

Srivastava

AUUP A0102312126 Class Roll C-24

Enrollment No:

No:

Contact No: +91- Email: arunimasrivastav

8527707779 a6@gmail.com

Name of the Prof. Ramesh Bagla

Faculty

Guide:

1. Dissertation Title

A study of the efficacy of customer relationship management in customer

acquisition and retention at select public sector and private sector banks

2. Rationale of proposed investigation

Indian banking has come a long way from small banks owned and managed by

select industrial houses to modern day professionally managed banks with

customer centricity both in public and private sector. With the advent of new age

banks such as HDFC & ICICI banks in 1990s, public sector banks with their

typical lack-luster ways of functioning, felt a new threat to their existence.

67

Private sector banks brought about a paradigm shift in the way, customers were

serviced by introduction of software based customer relationship management

(CRM). As a result, public sector banks were forced to follow the suite by taking

CRM initiatives. Thus CRM has become one of the most talked about tools for

customer acquisition and retention. There are divergent views about seriousness

with which Indian public sector banks have implemented the CRM initiatives.

This study aims to find out the customer perception about the CRM in select

public sector and select private sector banks and its efficacy in customer

acquisition.

3. Review of work already done on the subject/Literature Review

1. CRM- A strategic tool

The study of the literatures available today, raised many issues and concerns

related to CRM. The most important concern is the treatment of CRM as a

strategic tool. Dr. Nishikant Jha And Prof. (Mrs.) Shraddha Mayuresh

Bhome (May 2013 ), have done "A Study Of CRM-As A Strategic Tool

Adopted By Banks With Reference To Axis Bank In Thane City." The study

used survey questionnaires, which were filled by the customers of the Axis

Bank. The result of the paper showed that the customers of the bank were happy

with the kind of services provided by the Axis Bank and also that the employees

of the bank knew their job well. In the end few suggestions were provided by the

researchers to make working of the bank more easy and satisfying for the

customers. The result was depicted through pie-charts and bar-graphs. Similarly,

Dr. Richa Raghuvanshi And Rashmi Tripathi (2012) in their research paper

―Customer Relationship Management As A Strategic Tool In The Indian

Banking Sector: A Case Study Of Axis Bank At Lucknow” said that Indian

Banks are realizing that the magical formula for attaining success in a

competitive environment is to focus on maintaining relationship with customers.

68

The main purpose behind this study is to analyze whether banks are really

implementing the whole concept and philosophy of CRM as a means of securing

competitive advantage. These results were discussed and analyzed so as to get an

indication of how far CRM is strategically implanted to secure competitive

advantage. The research design in this study consisted of exploratory research

whereby different aspects with regards to CRM in the banking sector have been

extracted from literature review and tested on a sample size of both employees

and customers.

2. CRM- Influential in choosing banks in India

The second most important factor that was identified was the influence CRM has

on people while choosing banks in India. Ajit Kumar Sahoo And Rashmita

Sahoo (April 2013), studied the role of "CRM In Indian Banking Sector",

through factor analysis. They studied six different banks namely: SBI,

ANDHRA, ICICI, IDBI, CITI and HDFC. They conducted a study in

accordance with the following hypothesis:

Ho: There is no significant influence on any person in the choice of bank.

H1: There is significant influence on different persons in the choice of bank

According to the study, that followed, there happened to be three major factors

that had influence on a person's mind while choosing the bank. Those three

factors were: quality service, effectiveness of marketing program and

convenience in transaction.

Quality of service emerged as the first factor for selection of bank brands by the

respondents of SBI, Andhra Bank and CITI Bank,

Effectiveness of Marketing Program emerged as the factor the selection of the

bank by the respondents of IDBI and HDFC Bank.

69

Conveniently of transaction emerged as the most important factor for the

selection of bank used by the respondents of ICICI Bank.

3. Various types of CRM and need of managing CRM

Yatish Joshi And Ehtesham Ahmad (June 2013) in their paper "Customer

Relationship Management In Banks", have studied CRM through secondary

data provided by various researchers. They have discussed about the various

types of CRM: Operation, Analytical and Collaborative. They have also

discussed about the need of CRM in managing the customers, how can CRM be

beneficial to the banking industry. They have also discussed the various success

factors of CRM, how can the strategies of CRM be implemented and integrated

successfully in the banking marketing management.

Some points from the paper are as follows:

SUCCESS FACTORS FOR CRM

It is quite necessary to consider the following factors for successful

implementation of CRM in banking industry

To motivate customers to initiate revenue generating contacts.

To understand customer’s needs even before themselves. To decrease customer

churn by increasing customer’s satisfaction.

To use technology to improve customer’s service enables a greater degree of

customer differentiation in order to deliver unique customer interaction.

To make working customer friendly, through CRM.

To ensure that employees at all levels are accurately collecting the information

of the CRM system.

4. CRM- Boundary-less organization- Relationship for banking

70

Dr. Shirmila Stanley (November 2012), in her paper, "New Perspectives In

The Banking Sector- The CRM Way" studied the banks as boundary less

organization working 24*7. She also told that the banks of today are relying

more on the merits of "relationship for banking" as a factor for success.

According to her study, CRM has become a new mantra in service management,

which is both relationship based & information intensive. Banks need to

differentiate themselves by offering value-added service and building long-term

relationships with their customers. The CRM program must be embraced and

promoted by top management and supported with a comprehensive annual CRM

plan to ensure organization wide success. She has also discussed the 7 Ps of the

marketing management that are also evolving because of the integration of CRM

in the working of the organization. In the end she mentions a stress on the

support of the top management for promoting CRM strategies to gain more

customers and provide satisfaction to the present customers.

5. CRM- Customer Satisfaction, Customer Loyalty and Customer Value

Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), in the paper,

"Customer Relationship Management And Customer Loyalty: A Survey In

The Sector Of Banking, "studied the relation of CRM strategies and the impact

of these strategies on customer loyalty in the sector of banking. They found out

that more satisfied the customer more is customer’s loyalty towards the

organization and more the revenue generated. A benefit of a loyal customer is

that with him he brings along new customers, who if serviced satisfactorily may

turn out to be loyal customers of tomorrow. During the study the various

findings led to the formation of the following flowchart:

71

Forming customer Learning customer needsProducing solutionspeculiar to the problem

database and complaints

Customer Relationship Management

Customer Satisfaction

Customer loyalty

Padmaja R (2010) in her research paper “A Study Of Customer Relationship

Management In Banks With Special Reference To Bank Of India,

Hyderabad,” studied today's customers buying decisions that are not based

simply on the quality of the product but with the relationship they have with the

company. She also said that it is the responsibility of the organizations to

provide what they need so that they can do their job properly. In today's world,

we do business with individuals or groups with whom we may never meet and

hence much less known in person to person sense. Customer Relationship

Management is about creating the feel of comfort in this high tech environment.

This paper focuses the role of Customer Relationship Management in banking

sector and the need for Customer Relationship Management to increase customer

value and Customer Relationship Management in Banks with special reference

to Bank of India, Hyderabad.

72

6. CRM- Levels of Service Quality

G.S.Popli and D.N.Rao (2009) in their paper ―Customer Relationship

Management In Indian Banks” talked about the findings of the service quality

level being provided by these banks. These suggest that in case of the Private

Sector Banks, all the five dimensions of service quality have scored higher

values when compared to the Public Sector Banks. It also points towards the

same fact that these banks have been able to enhance the service quality levels

for their customers making them more customer-oriented.

7. Influence of attitude, knowledge and ability on CRM

Monal Deshmukh (October 2012) in her research paper "Customer

Relationship Management In Indian Commercial Banks" studied to

determine the usefulness of CRM implementation on customer contentment and

perceived business performance. Various references in respective field conclude

that successful CRM implementation requires complete efforts for the

development of the three segments, i.e. attainment, enhancement and service

recovery phases. A survey on commercial banks in India reveals that CRM

implementation is absolutely linked with customer satisfaction and apparent

business conductance. Moreover it is revealed that frequent rate of getting in

touch with customers and recovery of services facilitates in retention of

customers. Leaking bucket theory also suggests that retention of customers is 10

percent more profitable then attracting new customers every time. Attainment,

regular contact and evaluation of customers direct towards improved customer

loyalty (by repeat purchase, positive word of mouth publicity) and employee

sentiments. In an administrative point of view, this research provides an outline

of the impact of CRM efforts on the magnitude of customer satisfaction and

apparent business conductance.

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8. CRM- A rising concern

Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013), researched on

"Customer Relationship Management As A Corporate Strategy In Indian

Banking Sector: A Comparative Study Of Private And Public Sector

Banks." Their paper aims to analyze the aspect of Complaint Handling in the

area of Customer Relationship Management in banking sector in India. The

various types of problems faced by customers in Banking services in both the

public and private sectors, the frequency of making complaints and reasons for

not making complaints and the expectation levels of customers regarding the

ability of the customer service provider in handling complaints are the main

issues of discussion in the paper. The paper is based on primary data. The paper

identifies certain behavioral factors that are associated with complaint issues in

the banking services of public and private sector. The study was divided into two

parts: Pilot study and Main study. In accordance with the results of pilot study

the questionnaire was modified and then the main study was conducted. The

results are depicted through bar-graphs. The study also throws light on the major

areas of concern for the banking sector in order to maintain CRM as a strategic

tool. The areas of concern are as follows:

Proper identification of Behavioral considerations during a service interaction

Dealing effectively with enquiry related system

Developing awareness tools

Training behavioral skills of employees

Proper development and implementation of complaint handling system.

9. Effect of CRM on Firm Performance

Tim R. Coltman, Timothy M. Devinney, And David F. Midgley (2000) in

their research paper “Relationship Of Customer Relationship Management

And Firm Performance” examined the impact of customer relationship

management (CRM) on firm performance using a hierarchical construct model.

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Following the resource-based view of the firm, strategic CRM is conceptualized

as an endogenously determined function of the organization’s ability to harness

and orchestrate lower order capabilities that comprise physical assets, such as IT

infrastructure, and organizational capabilities, such as human analytics and

business architecture. Their results reveal a positive and significant path between

a superior CRM capability and firm performance. In turn, superior CRM

capability is positively associated with human analytics and business

architecture. However, their results suggest the impact of IT infrastructure on

superior CRM capability is indirect and fully mediated by human analytics and

business architecture. They also found that CRM initiatives jointly emphasizing

customer intimacy and cost reduction outperform those taking a less balanced

approach. Overall, this paper helped explain why some CRM programs are more

successful than others and what capabilities are required to support success.

Their paper showed that customer relationship management suffers when it is

poorly understood, improperly applied, and incorrectly measured and managed.

This study revealed the combination of investment commitments in human,

technological and business capabilities required to create a superior CRM

capability. The exact extent of these capabilities is extant indeterminate and

should be guided by a strategic emphasis that combines customer intimacy and

operational excellence. By integrating two schools of thought- capabilities and

strategic emphasis- they have build a more managerially relevant theory of CRM

performance that shows why CRM programs can be successful and what

capabilities are required to support success.

10. Influence of employees on CRM

C Rootman, M Tait & J Bosch (2007) in their paper “The Influence Of Bank

Employees On Bank Customer Relationship Management” did an extensive

research in services marketing, which is much still unknown to specific service

providers on the influence of their employees on their services. This paper

attempts to address this limitation and investigates the influence of employees on

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the customer relationship management (CRM) of banks. The primary objective

of this paper is to investigate the influence of selected independent variables,

namely attitude and knowledge ability, on the CRM of banks. An empirical

investigation was conducted with a structured questionnaire with items that

related to banks' CRM in terms of attitude and knowledge ability. The sample

consisted of 290 banking customers in the Metropolitan area and the response

rate was 91.03%. As a result a significant positive relationship was found to

exist between both the knowledge and ability, and attitude of bank employees

and a bank's CRM. These relationships imply that more extensive knowledge

ability and more positive attitudes of bank employees lead to improved,

maintained relationships between a bank and its customers. Employees play an

important role in banks' customer relationships.

11. CRM in Investment Banks

Fan Wang, Fang Hu And Li Yu (2010) in their paper ―The Application Of

Customer Relationship Management In Investment Banks” discussed the

importance of CRM to the investment banks management, compared the

application of CRM between domestic investment banks and the foreign ones,

and points out that in applying CRM, domestic investment banks must make

clear their cognitional misunderstanding, base themselves on the customers

center and customers satisfaction, and their own status and characteristics, take

efficient measures to perfect CRM, then realize the maximizing value . They

also talked about the different CRM strategies that can be applicable in China.

12. CRM and Customer Acquisition

Lawrence Ang and Francis Buttle (2004), in their research paper ―Managing

For Successful Customer Acquisition: An Exploration” studied the recent

attention dedicated by consultants, academics and practitioners to customer

retention, customer acquisition. Customer acquisition is of major importance and

demands attention as the first stage of the customer life cycle. There is a strong

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analytical, planning and control emphasis to the bulk of the contemporary

customer management literature. This emphasis is projected into research

hypotheses, which focus on the first stage of the life-cycle-customer acquisition.

In particular, they examined (1) executive responsibility, (2) budgeting for

customer acquisition, (3) knowledge of the economics of customer acquisition

and (4) the deployment of CRM technologies.

In summary, two overarching managerial implications can be drawn from this

study. First, companies are generally not very advanced in their management of

the core CRM activity of customer acquisition as indicated by the low level of

adoption of management practices such as budgeting, planning, executive

responsibility and the application of CRM technologies. Second, having an

acquisition plan (or, indeed, putting a manager in charge) by itself is not

sufficient to generate good acquisition outcomes. It is vital to have a dedicated

customer acquisition budget. The overriding managerial implication is that if

senior management is truly serious about customer acquisition, it should be

reflected in a budget dedicated to the task. Their research shows that only then is

excellence in customer acquisition achieved.

13. CRM- Problems and Challenges

Shahzeb Ali Malik and Trevor Wood-Harper (2002) in the study ―Customer

Relationship Management (Crm) In The Banking Sector Of Pakistan:

Problems And Challenges” focused on CRM that has helped banks to

understand the customers' current needs, what they have done in the past, and

what they plan to do in the future to meet their own goals. Even though most of

the banks in the developing countries such as: Pakistan, India etc. have realized

the importance of CRM and implemented its applications, but the initial

investigations of the current research have shown that quite a number of CRM

goals does not produce required results and even worse, in some cases users say

that CRM has damaged customer relationships. Therefore, this paper is based on

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highlighting the problems and challenges in the banking sector of Pakistan using

CRM. Also, some of the major problems in the banking sector of Pakistan are

identified using the qualitative interviews from different bank employees and

customers and their findings are presented in this paper.

4. Objectives

The research objectives are as follows:

a. To find out the level of awareness in the customer of select public sector

banks about the CRM initiatives taken by these banks.

b. To find out the effectiveness of CRM in increasing the customer satisfaction

and loyalty in the select public sector banks.

c. To find out if there has been any positive impact on customer acquisition and

retention as a result of CRM initiatives taken by these banks.

5. Materials and Methods

Research Design

A combination of Exploratory and Descriptive research design would be used in

the research work. Exploratory research would be applied to identify the

customer preferences which attract them to opt for a bank for various services.

Sampling Design

Sample (Participants): The sample for this research comprises of customers of

the select banks

Type of Sampling: Convenience and Snowball sampling would be used for the

study.

Sample Size: The sample size is 300 customers from six select public sector

and private sector banks.

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Data Collection

Data Type:

Data type proposed for the research is a combination of primary and secondary

data. The primary data would be collected through a detailed questionnaire,

which would be circulated in the proposed sample area and secondary data

would be collected through the thorough study of the research journals, reports,

whitepapers and cases previously published on the topic.

Research Instrument

A structured questionnaire will be used for collection of primary data. The

instrument would be tailored for the research based upon the objectives. The

instrument would be put through a pilot test for reliability testing through the

responses collected from 300 respondents.

Tools Used

The major tools used for analysis are as follows:

1. Descriptive Statistics: Bar graphs and Pie charts.

2. Correlation to find the type of relationships

3. Crosstabs to find the relation between two variables

6. Tentative Chapter wise details of proposed

research Chapter 1: Introduction

Chapter 2: Review of Literature

Chapter 3: Research Methodology

Chapter 4: Data Analysis and Interpretation

Chapter 5: Conclusion and Recommendation

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7. References Cited

1. Tim R. Coltman, Timothy M. Devinney, and David F. Midgley (2000)

―Relationship Of Customer Relationship Management And Firm Performance

2. Shahzeb Ali Malik and Trevor Wood-Harper (2002) Customer

Relationship Management (CRM) In The Banking Sector Of Pakistan:

Problems And Challenges

3. Lawrence Ang and Francis Buttle (2004), ―Managing For Successful

Customer Acquisition: An Exploration, Journal of Marketing Management,

October 2004

4. C Rootman, M Tait & J Bosch (2007) ―The Influence Of Bank Employees

On Bank Customer Relationship Management

5. G.S.Popli and D.N.Rao (2009) ―Customer Relationship Management In

Indian Banks‖

6. Fan Wang, Fang Hu And Li Yu (2010) ―The Application Of Customer

Relationship Management In Investment Banks

7. Padmaja R (2010 ―A Study Of Customer Relationship Management In

Banks With Special Reference To Bank Of India, Hyderabad‖

8. Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), "Customer

Relationship Management And Customer Loyalty: A Survey In The Sector Of

Banking‖, International Journal of Business and Social Science Vol. 3 No. 3;

February 2012

9. Dr. Richa Raghuvanshi and Rashmi Tripathi (2012) ―Customer

Relationship Management As A Strategic Tool In The Indian Banking Sector:

A Case Study Of Axis Bank At Lucknow

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10. Dr. Shirmila Stanley (November 2012), "New Perspectives In The

Banking Sector- The CRM Way

11. Monal Deshmukh (October 2012), "Customer Relationship Management

In Indian Commercial Banks‖, International Journal of Science and Research

(IJSR), India, Volume 1 Issue 1, October 2012

12. Ajit Kumar Sahoo and Rashmita Sahoo (April 2013), "CRM In Indian

Banking Sector‖, VSRD International Journal of Business and Management

Research, Vol. 3No. 4April 2013

13. Dr. Nishikant Jha and Prof. (Mrs.) Shraddha Mayuresh Bhome (May 2013 ),

"A Study Of CRM-As A Strategic Tool Adopted By Banks With Reference

To Axis Bank In Thane City.‖, Indian Journal Of Applied Research, Volume : 3

| Issue : 5 | May 2013 | ISSN - 2249-555X

14. Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013) "Customer

Relationship Management as a Corporate Strategy in Indian Banking Sector: A

Comparative Study Of Private And Public Sector Banks, Journal of Business

Management & Social Sciences Research (JBM & SSR), ISSN No: 2319-5614,

Volume 2, No. 3, March 2013.

15. Yatish Joshi and Ehtesham Ahmad (June 2013) "Customer Relationship

Management In Banks‖, VSRD International Journal of Business and

Management Research, Vol. 3 No. 6 June 2013

Signature of the Student Signature if the Faculty Guide

Arunima Srivastava Prof. Ramesh Bagla

Date: 11th October, 2013