CRM (Customer Relationship Management) Trends in India
In Indian banking Customer Relationship Management is still at a In the present Indian Banking Scenario, two prominent phenomena are the. Customer relationship management in indian scenario: A strategic theoretical framework for relationship marketing in indian SMEs [A Mehta] on mephistolessiveur.info CRM or Customer Relationship Management is as old as commerce itself. However, in the last couple of decades, the meaning of CRM has.
It brings people process and data together and enables channelling of data and information appropriately to bank staff for proactive decision making and enhanced informed customer service and support activities.
It provides a means of information sharing to all concerned in timely manner and includes customer as a creator of service. Global scenario Worldwide banks have explored and realised the benefits of CRM in a variety of ways.
Different banks have implemented the philosophy in their own different way. A few illustrations will give a glimpse of the global scenario with respect to CRM in Banking.
Royal Bank of Canada utilised CRM to develop models of assessment of customer profitability and life time value.
These were then included in determining customer decisions like — Customised Marketing campaign, establishing service levels, segmentation, targeting, product design and pricing.
Wells Fargo Bank renowned for leadership in service and convenience to varied customer segments focused on customer service through CRM. Application of CRM enabled better integration of customer information and service applications to assist representatives of customer sales and services to easily provide a one-stop-shop for any banking service or transaction.
Customer Relationship Management in Banking Sector
Using CRM, Wells Fargo takes full advantage of available customer information to offer customer the choice, convenience and price benefits so that they give the Bank, all their business.
Indian scenario Although significance of Relationship Marketing practices and optimising and maintaining customer relationships across diverse customer segments has been realised and practiced by all banks in India, the technology enabled CRM is still at a developing stage. Different Banks are at different levels of CRM adoption and implementation and majority of them can be considered to be at preliminary stages. Also SMS alerts at various significant customer service events are proliferating.
Analytical CRM is being utilised but not by all banks. These enable sharing of relevant customer information to all concerned staff members to design new products, provide proactive service, and informed customer handling leading better service. It enables collaboration among staff and customers to create higher customer value through use of CRM software.
The payoffs are in terms of increased customer base, cross- selling, sales force optimisation, efficient lead management and higher productivity. Core areas of transformation were business focus, organisation structure, business matrix, marketing focus and technology. This brings the bank one step ahead in providing convenience and service through CRM. The system generates reports daily for top management and each of the branches have access to reports generated particularly for them.
Bank of Maharashtra has developed in-house software which generates and updates a variety of reports on detailed customer information and sends to branches. These reports are utilised for better customer understanding, better customer support and service by access to relevant customer information with all stakeholders to enable decision making and Business Development as well as retention activities.
Issues and challenges CRM is a strategic initiative which has organisation wide implication. Many banks are still struggling to make proper use of this very useful mechanism.
However, the adoption and utilisation is dependent on a number of factors and impediments.
Broadly the issues are pertaining to: People, Processes, Data and Technology. Also a major drawback is the general perception of CRM being a Technology imperative. There is a great need to understand that technology is only the enabler to CRM.
In the real sense it is an organisation wide strategy. Most officers perceive technology as a limited to record of information and transaction. The use of technology in further sophisticated information processing and dissemination is not done. There are multiple channels and multiple technologies in use simultaneously in customer interface, service and sales. Empowerment to frontline staff: Frontline staffs have customer profile and data.
Most of them have no motivation to further process these and make full utilisation of these to provide better services and proactive selling effort. They are neither trained to use customer analytics nor to customise the Banks offering. Historical data collected from legacy systems tend not to have been collected in any standard form.
This process has to be carried out across branches which in addition to their core tasks have this work.
Employees expected to organise and systematically manage data may not dot efficiently because of the lack of understanding of the strategic perspective of this activity.
They also lack the necessary infrastructure and skill to complete this task. People issues Lack of knowledge and skills in converting data to customer knowledge Lack of motivation for utilising the potential of CRM solution Inadequate performance management parameters Less or insufficient decision making authority: In order to use CRM concept towards customer centricity, sufficient decision making power is required to provide customised, responsive and proactive services.
Staff lacks training in IT, its applications, the complete use of software and its applications as well as marketing skills, analytical skills, uses of customer information and service skills for implementation CRM. CRM may only strengthen the relationship between perceptions and up-buying and cross buying which is in 60 The Business Review, Vol.
Customer Relationship Management: A review of Indian banking sector | Suhail Bhat - mephistolessiveur.info
So perception also plays an important role in the development of relations. Organizations are trying their best to have closest relations with their customers by focusing more on satisfying their needs and wants better than their competitors El Sawy and Bowles, In order to enhance these relationships, companies should pay keen attention in selecting the optimal interval of CRM implementation efforts that meets customer expectations.
CRM assists organizations to identify, attract, and increase retention of profitable customers by managing relationships with them Hobby, and furthermore identifying strategically significant customers Buttle, To create successful CRM implementation and long lasting relationships, it is important to look at the fundamental mechanisms pertaining a strong relationship Nguyen and Mutum, Four factors which find much relevance are Smith et al.
Thus CRM must be conceived as a strategy, due to its human, technological and process implications, Zablah et al. CRM satisfaction relationship CRM maturation process leads to customer satisfaction and customer retention. The customer satisfaction and relationship marketing literature suggests three predictors of retention: Customer satisfaction is an overall evaluation of performance to date, affective commitment captures the trust and reciprocity in a relationship and calculative commitment captures the existence of switching costs or lack of viable alternatives Gustafsson et al.
Customers who are satisfied with service quality are less likely to shift to other banks, therefore, increases retention and loyalty Al-Hawari et al. CRM suffers when it is poorly understood, improperly applied and incorrectly measured and managed Coltman et al. CRM must increase the personal relationship with the customer to exactly ascertain their expectation over services as well as the product.
The frontline employees are responsible for the ultimate satisfaction and retention of the customers Matilla and Enz, The major CRM practices are collaboration, customization and customer prospecting as well as key account management practices.
Thus customer intimacy has to be the focal point of any growing financial organization. In the same way there has to be an interactive customer management to enhance customer retention Mbizi and Muzividzi, So managers should try to acquire 61 The Business Review, Vol. CRM as key for success The relationship between banking and CRM practices is such that nowadays it is almost impossible to think of the former without the latter Hajizadeh et al.
Now banks are approaching CRM as a tool for building customer base and increasing the sales. This approach held by the banks is damaging their image and the customers are losing confidence on their bankers.
Banks need to differentiate themselves by offering value-added service and take special efforts to change their image, if they want to realize the possibilities of building strong relationship 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 Stanley, ; Sahoo, A more consumer-oriented strategy in services would, therefore, be needed to improve understanding of the merits of CRM strategy and incorporate it into the business strategy in the industry Alsmadi and Alnawas, There is a long held belief that CRM is a multi dimensional construct.
The critical factors that explain CRM in Indian banking sector have been identified as organizational structure, customer support, service quality, trust, technology, personalization and market orientation Agariya and Singh, These factors should be duly considered by the Indian banks in order to achieve a high degree of customer satisfaction and business performance which are the primary and compulsive goals for any business organization in the current competitive scenario.
There are many public and private sector banks doing business in India. In such a competitive environment, the banks should adopt suitable marketing skills rather than depending on the trading skills.
Hence, new services should be constantly introduced to ensure the growth of the banks and to be competitive in the market and to keep up the enthusiasm of the employees and customers etc Das, The domain of CRM helps into many areas of banking which including strategic decision making, marketing and selling financial products, helping banking industry to enable its marketing to identify and target their best customers, managing marketing campaigns and generating quality leads.CRM systems in Hindi - What is Customers Relationship Management System in Urdu
This combined with a growing appetite for customization and personalization, is driving the need to constantly transform applications and offerings to meet new competition and changing customer preferences, expectations and needs Joshi and Ahmad, Thus CRM should be integrated with innovative programs and development of innovative capability must be a supply-chain-wide effort Lin, The key for profit in the banks are the customers who make the organization profitable and the CRM is a growing trend in banks.
Financial service providers are, however, recognizing many challenges they face in implementing an enterprise wide CRM business strategy. The requirements for a successful cross-selling system are to provide an external input to the current initiative already underway at the bank Jarrare and Neely, Thus the banks should treat the individual customer differently on the basis of their different requirements Dibb, Zineldin argues that banks do not sell products; they sell their reputation with every customer relationship.
CRM systems have today become an indispensible tool for effective customer relationships Vella et al. CRM in the financial services sector is of greater importance as customer touch points are more apparent in service industry Ryals and Payne, Banking is a non-product differentiation industry where trust and commitment can be build only by providing services and intelligently maintaining profitable and sustainable relationship with customers Gummerson, ; Gulati and Sivakumaran, Successful implementation of CRM systems depends on four pillars: Despite the apparently straightforward nature of each of these four pillars, all four are connected and must work in unison to achieve superior customer relationships Day ; Johnson The implementation of latest technology is useful for any firm to maintain loyalty as well as to offer satisfaction to the customers Schrader, The financial institutions are in the competitive pressures to adopt Customer Relationship Marketing strategies including service quality, on-time communication facility, customer focused service, increase the customer trust, security facilities, feel customer prestige and positive customer word of mouth etc.
Saravanakumar and Kumar, Much emphasis is given on a need to build goodwill in the market to attract more customers. Various tactics are used by the banks to make customers loyalty Nevin, Competitive advantages that organization could gain from CRM systems include the following: Conclusion As it is revealed from the various studies, that CRM is one of the key factors for the profitability of the firm.
CRM is gradually shifting attention toward customer and identifying ways of harnessing the potential of CRM for the benefit of the customer. Organizations need to assess the business situation and understand the real requirements for automation and should focus on delivering highest value to the customer through better communication, fast delivery and personalized products and services. Often companies have to change their business processes for the effective delivery of service to the customer.
Besides firms operating within banking, telecommunications, retailing, hospitality, travel, and health care industries, to name but a few, possess large amounts of valuable customer data that can give an ease for revitalizing CRM. The majority of the works have focused mostly on the process and technology part of CRM, whilst the role of human factor or psyche has been rarely touched.