A

PROJECT ON

SUBMITTED BY

(T.Y.B.F.M. SEM-V)

PROJECT GUIDE

SUBMITTED TO

UNIVERSITY OF MUMBAI

RSETs

GHANSHYAMDAS SARAF COLLEGE

OF ARTS & COMMERCE

Affiliated to University Of Mumbai

Reaccredited by NAAC with A Grade

S.V. Road, Malad (West)

Mumbai-400064
A.Y: 2017-2018

RSETs

GHANSHYAMDAS SARAF COLLEGE

OF ARTS & COMMERCE

Affiliated to University Of Mumbai

Reaccredited by NAAC with A Grade

S.V. Road, Malad (West), Mumbai-400064

CERTIFICATE

I, Prof. _ hereby certify that a student of

Ghanshyamdas Saraf College of Arts & Commerce of T.Y.B.F.M. (Semester V)
has completed project on in the Academic
year 2017-2018.

This information submitted is true and original to the best of my knowledge.

External Examiner: Principal

Date:

Project Coordinator:

Date:
 ACKNOWLEDGEMENT

I take this opportunity to thank the UNIVERSITY OF MUMBAI for giving me a

chance to do this project.

I express my sincere gratitude to the Principal Dr Sujata Karmarkar, Chief

Coordinator Dr Lipi Mukherjee, Course Coordinator Prof. Prasanna
Choudhari and Project Guide Prof.

As well as teaching staff and our library staff for their constant support and helping
for completing the project.

My deep sense of gratitude to the staff and employees of (Company Visited) for their
support and guidance.

I am also grateful to my friends for giving me moral support during the course of my
project work Lastly, I would like to thank each and every person who helped me in
completing the project successfully

Especially My Parents.
 DECLARATION

I a student of Ghanshyamdas Saraf College of Arts &

Commerce, T.Y.B.F.M. (Semester V) hereby declare that I have completed project
on in the
Academic year 2017-2018.

This information submitted is true and original to the best of my knowledge.

Date: Signature of Student

INDEX
 EXECUTIVE SUMMARY

A narrow perspective of customer relationship management is database marketingemphasizing

the promotional aspects of marketing linked to database efforts. Another narrow, yet relevant,
viewpoint is to consider
CRMonly as customer retention in which a variety of after marketingtactics is used for customer
bonding or staying in touch after the sale is made. Shani and Chalasani define relationship
marketing as an integrated effort to identify, maintain, and build up a network with individuals
consumers and to continuously strengthen the network for mutual benefit of both sides, through
interactive, individualized and value-added contacts over a period of time. The core theme of
allCRM and relationship marketing perspectives is its focus on co-operative and collaborative
relationships between the firm and its customers, and/or other marketing
actors.CRM is based on the premise that, by having a betterunderstanding of the customers
needs and desires we can keep them longer and sell more to them. Growth Strategies
International (GSI) performed a statistical analysis of Customer satisfaction data encompassing
the findings of over 7,000+ customer surveys conducted by Angel Broking Ltd.CRM (customer
relationship management) is an
informationindustry term for methodologies, software, and usually Internetcapabilities that help
an enterprise manage customer relationships in an organized way. For example, an enterprise
might build a database about its customers that described relationships in sufficient detail so that
management, salespeople, people providing service, and
perhapsthe customer directly could access information, match customerneeds with product plans
and offerings, remind customers of service requirements, know what other products a customer
had purchased, and so forth. The essence of the information technology revolution and, in
particular, the World Wide Web is the opportunity to build better relationships with customers
than has been previously possible in
theoffline world. By combining the abilities to respond directly tocustomer requests and to provi
de the customer with a highly interactive, customized experience, companies have a greater

1
ability today to establish, nurture, and sustain long-term customerrelationships than ever before.
The ultimate goal is to transform these relationships into greater profitability by increasing repeat
purchase rates and reducing customer acquisition costs. Indeed, this revolution in customer
relationship management or CRM. As it is called, has been referred to as the new mantra of
marketing.

Companies like Siebel, Epiphany, Oracle, Broad vision, Net Perceptions, Kana and others have
filled this CRM space with products that do everything from track customer behaviour on the
Web to predicting their future moves to sending direct e-mail communications. This has created
a worldwide market for CRM products and services of $34 billion in1999 and which is
forecasted by IDC to grow to $125 billion by 2004.

2
 Research Methodology

Scope of the study

The existing literature suggests that following four factors should be covered:

(1) Managing and building customer relationship (Hunt1994),

(2) Relationship evolves with distinct phases (Dwyer, 1987),
(3) The distributing value of relationship to the institution is not identical (Narasimhan

2001)

(4) Managing relationships and interacting with customers on every stage (Fahey1998).

The current study focuses exclusively on the CRM of commercial banks. However,

Within commercial bank, the regional co-operative banks are not been covered.
4The study also tries to identify and provide the parameters for selection of banks by the
Customer and factors leading to affinity and relationship with the bank.

The respondents in this research work are customers and based on their feedback a CRM

model has been worked out, which will helpful for the banking sector to implement
CRM.

The suggestions and recommendations will help the banks to plug the deficiency in better

Manner to improve the relationship management services.

Data Collection Method

Secondary data has used for the study.

Secondary data is collected from library, text books, and journals, articles from newspapers and
from relevant websites available on internet.

3
 Chapter 1 INTRODUCTION

1.1 Banking on CRM

Competition and globalisation of banking services are forcing banks to be productive and
profitable. To retain High Net Worth individuals, banks should focus strongly on relationship
management with customers. Innovative Customer Relationship Management (CRM) strategies
and cutting edge software can help, to a great extent, in achieving the desired results. To provide
customised services, banks are opening Personalised Boutiques which provide all the required
financial needs of a customer.

The entire service industry is now metamorphosed to become customer- specific. In this context,
the management of customer relationship in financial services industry demands special focus.
Gone are the days when customers at a bank did not mind the long serpentine queues and waited
patiently for their turn with a token in their hand. In todays Internet era, no one has the leisure to
wait. In this context, online banking is assuming a great significance. Today, banking is more
customer-centric, unlike the yester when it was transaction-centric. Banks are increasingly
focusing on the premise that customers choose on the service provider who differentiates through
quick and efficient service.

However, there is more to Customer Relationship Management (CRM) than just managing
customers and analysing their behaviours. Banks are well aware that their success is
predominantly dependent on the CRM strategies adopted by them. Service providers have
recognised that good CRM bonds customers with the organisation for a longer term, resulting in
increased revenues.

With customers expectations becoming even more competitive, banks are coming up with a
wide array of novel products and services every day. The challenge is for the banks to work
towards ensuring that customers prefer their products and services over that of competing brands.
The key to develop and nurture a close relationship with customers is by appreciating their needs
and preferences and catering to their requirements. Leveraging on IT, to appropriately analyse
and understand the needs of existing customers better, to ensure customer satisfaction, and

4
exploring the possibility of cross-selling products to gain a competitive advantage are the other
issues drawing attention and interest.

With the opening up of the economy, a number of private sector banks have joined the fray and
are offering a plethora of products and services- rechristening themselves as Financial
Boutiques. Knowledge dissemination has been propelled by electronic and mass media
campaigns. Todays knowledgeable consumer is challenging the Indian retail banking industry to
redefine itself. Thus in this current competitive scenario, for a bank to survive competition,
succeed and make profit, there is hardly any option but to learn from and actively respond to
consumers needs. Banks offering retail products need to reorient their strategy from a product-
centric to a customer-centric approach to attract and retain High Net worth Individuals (HNI) and
profitable customers as well. The battle of the banks, for gaining a greater slice of the market
share, is taking on a new dimension. In the current falling interest rate scenario, banks are
finding it increasingly difficult to meet the high growth expectations. In order to bolster their top
lines, banks are in pursuit of newer ways and means of achieving organic growth through
strategies that enable acquisition of new customers and retaining the loyalty of the existing
customers. Success of a banks strategy towards customer acquisition will depend on its ability
to develop customer insights and translate these into effective operating models. Ensuring a good
customer experience at every customer touch point is the cornerstone of a successful growth
strategy. A good customer experience will drive customer acquisition and promote customer
retention, which translates into increased profits. This, in other words, is the hallmark of a
successful CRM strategy. Emphasis on CRM arises on account of the challenges confronting
retail managers----- managing to sustain and achieve growth and profits.

1.2 Defining CRM

Customer Relationship Marketing is a practice that encompasses all marketing activities directed
toward establishing, developing, and maintaining successful customer relationships. The focus of
relationship marketing is on developing long-term relationships and improving corporate
performance through customer loyalty and customer retention.

5
Customer Relationship Management (CRM) as the name suggests, the primary focal point is
placed on the customer. The key objective is to increase customer value over time by increasing
customer loyalty. If a company develops better customer relationships, it also improves business
processes as well as its profits. In general, CRM is a more efficient automated method used to
connect and improve all areas of business to focus on creating strong customer relationships. All
forces are coupled together to save, improve, and acquire greater business to customer
relationships. The most common areas of business that are positively affected include marketing,
sales, and customer service strategies. CRM helps create time efficiency and savings on both
sides of the business spectrum. Through correct implementation and use of CRM solutions,
companies gain a better understanding of their strongest and weakest areas and how they can
improve upon these. Therefore, customers gain better products and services from their businesses
of choice. In order to achieve better insight on CRM, it is essential to consider all of its
components.

CRM- meaning Customer relationship management (CRM) is a business strategy that spans your
entire organization from front office to back-office. It is a commitment you make to put
customers at the heart of your enterprise. The right CRM strategy and solutions can help you
securely, reliably and consistently:

Delight your customers every time they interact with your business by empowering them with
anytime, anywhere, and any channel access to accurate information and more personalized
service.

Reach more customers more effectively, increase customer retention and boost customer
loyalty by leveraging opportunities to up-sell and cross-sell and driving repeat business at lower
cost.

Drive improvements in business performance by providing your customers with the ability to
access more information through self-service and assisted-service capabilities when it is
convenient for them.

Enable virtualization in your enterprise as more of your people and resources extend beyond
your offices and around the world.

6
 Balance sophisticated functionality with rapid implementation and effective support for a faster
return on your CRM investment.

Todays customers face a growing range of choices in the products and services they can buy.
They base their choices on their perception of quality, value, and service. Each consumer has a
specific behaviour. But buying habits are sometimes difficult to understand. Therefore
companies always want to gain some insight about consumer behaviour and habits in order to
better control this behaviour. Having an impact on consumer behaviour means being able to
change consumers perception of the product or service, to establish a relation between the
company and its clients.

1.3 Study of Banking Sector

The Indian banking can be broadly categorized into nationalized (government owned), private
banks and specialized banking institutions. The Reserve Bank of India acts a centralized body
monitoring any discrepancies and shortcoming in the system. Ever since nationalization of banks
took place in 1969, the public sector banks or the nationalized banks have acquired a prominent
place and has since then seen tremendous progress. The need to become highly customer focused
has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of
products and services through the net has galvanized players at all levels of the banking and
financial institutions market grid to look anew at their existing portfolio offering. Conservative
banking practices allowed Indian banks to be insulated partially from the Asian currency crisis.
Indian banks are now quoting at higher valuation when compared to banks in other Asian
countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge
Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in
approach and armed with efficient branch networks focus primarily on the high revenue niche
retail segments. The Indian banking has finally worked up to the competitive dynamics of the
new Indian market and is addressing the relevant issues to take on the multifarious challenges
of globalization. Banks that employ IT solutions are perceived to be futuristic and proactive
players, capable of meeting the multifarious requirements of the large customer base. Private
Banks have been fast on the uptake and are reorienting their strategies using the internet as a

7
medium The Internet has emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any other marketing medium.
The Indian banking has come from a long way from being a sleepy business institution to a
highly proactive and dynamic entity. This transformation has been largely brought about by the
large dose of liberalization and economic reforms that allowed banks to explore new business
opportunities rather than generating revenues from conventional streams (i.e. borrowing and
lending). The banking in India is highly fragmented with 30 banking units contributing to almost
50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the
government) continue to be the major lenders in the economy due to their sheer size and
penetrative networks which assures them high deposit mobilization The Reserve Bank of India
act as a centralized body monitoring any discrepancies and shortcoming in the system. It is the
foremost monitoring body in the Indian financial sector. The nationalized banks (i.e.
government-owned banks) continue to dominate the Indian banking arena. Industry estimates
indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector
and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that
have started their operations here. Under the ambit of these nationalized banks come the
specialized banking institutions.

Chapter 2 BANKING

8
2.1 Definition of banking

The accepting for the purpose of lending or investment, of deposits from the public, repayable on
demand or otherwise and withdrawal by cheques, draft or otherwise. (Banking Regulation Act)

Dr. Paget in Law of Banking states, No one and no body, corporate or otherwise, can be a
banker who does not: i. Conduct Current Accounts

ii. Pays cheques drawn on himself iii. Collects cheques for his customers

A bank is therefore Any company that transacts the business of banking in India. Negotiable
Instrument Act.

Banker:

Banker is Any person acting as a banker Negotiable Instrument Act.

Customer:

There must be some recognizable course or habit of dealing in the nature of regular banking
business. A single transaction can constitute a customer; must have an account; dealing must be
of a banking nature; some frequency in transactions is expected but is not essential.

MAHATMA GANDHIS DEFINITION OF CUSTOMER

A customer is not an outsider to our business. He is a definite part of it. A customer is not an
interruption of our work. He is the purpose of it.

A customer is doing us a favour by letting us serve him. We are not doing him any favour. A
customer is not a cold statistic; he is a flesh and blood human being with feelings and emotions
like our own.

A customer is not someone to argue or match wits with. He deserves courteous and attentive
treatment.

A customer is not dependent on us. We are dependent on him. A customer brings us his
wants. It is our job to handle them properly and profitably - both to him and us. A customer
makes it possible to pay our salary, whether we are a driver, plant or office employee.

9
Bank Customers

Minor Joint Account

Married women Hindu undivided Family

Pardanashin Woman Partnership firm

Illiterate people Limited companies

Lunatics Clubs, Societies and Charitable

Institutions
Trustees
Non-resident and Persons of India origin
Executors and Administrators
Foreigners
Power of Attorney Holders

Before getting into the details of how CRM actually works in the financial sector, it is very
important to know your customer.

2.2 Know Your Customer (KYC)

It is very important to know the customer before having any kind of relationship with him
(especially in the banking sector). This is important because of drugs smuggling/ trafficking,
money laundering and terrorism coming up. If one has to build a relationship with the customer
one should follow all the KYC norms laid down by RBI.

Under the KYC a customer is: A person or entity that maintains an account and/ or has a
business relationship with the bank.

One on whose behalf an account is maintained.

Any person/ entity connected with financial transaction which can pose significant reputational
or other risks.

10
 Chapter 3 RELATIONSHIP MARKETING IN BANKS

3.1 CRM in banking

Retail banking refers to mass-market banking where individual customers typically use banks for
services such as savings and current accounts, mortgages, loans (e.g. personal, housing, auto, and
educational), debit cards, credit cards, depository services, fixed deposits, investment advisory
services (for high net worth individuals) etc.

Before Internet era, consumers largely selected their banks based on how convenient the location
of banks branches was to their homes or offices. With the Advent of new technologies in the
business of bank, such as Internet banking and ATMs, now customers can freely chose any bank
for their transactions. Thus the customer base of banks has increased, and so has the choices of
customers for selecting the banks.

This is just the beginning of the story. Due to globalization new generations of private sector
banks and many foreign banks have also entered the market and they have brought with them
several useful and innovative products. Due to forced competition, public sector banks are also
becoming more technology savvy and customer oriented.

Thus, Non-traditional competition, market consolidation, new technology, and the proliferation
of the Internet are changing the competitive landscape of the retail banking industry. Today
retail banking sector is characterized by following:

Multiple products (deposits, credit cards, insurance, investments and securities)

Multiple channels of distribution (call center, branch, Internet and kiosk)

Multiple customer groups (consumer, small business, and corporate)

Today, the customers have many expectations from bank such as

11
(i) Service at reduced cost

(ii) Service Anytime Anywhere

(iii) Personalized Service

With increased number of banks, products and services and practically nil switching costs,
customers are easily switching banks whenever they find better services and products. Banks are
finding it tough to get new customers and more importantly retain existing customers.

According to a research by Reichheld and Sasser in the Harvard Business Review, 5% increase
in customer retention can increase profitability by 35% in banking business, 50% in insurance
and brokerage, and 125% in the consumer credit card market. Therefore banks are now stressing
on retaining customers and increasing market share.

3.2 Needs of a Bank

The banks now need to find out what to sell, whom to sell, when to sell, how to sell and how to
be different to increase profitability. Banks need to differentiate themselves by adding value-
added service, offerings and building long-term relationships with their customers through more
customized products, enhanced value offerings, personalized services and increased accessibility.
Banks also need to identify customers and products that would be most profitable and target
customers with products that are most appropriate to their needs and serve the customers with
greater cost efficiency.

Banks also need to find out the avenues for increased customer satisfaction, which leads to
increased customer loyalty. This may be explained better from two initiatives bank took in the
past:

1. Earlier what drove many bankers to invest in ATMs was the promise of reduced branch
cost, since customers would use them instead of a branch to transact business. But what
was discovered is that the financial impact of ATMs is a marginal increase in fee income
substantially offset by the cost of significant increases in the number of customer
transactions. The value proposition, however, was a significant increase in that intangible
called customer satisfaction. The increase in customer satisfaction has translated to
loyalty that resulted in higher customer retention and growing franchise value.

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 2. Bankers invested in Internet banking, believing that the Internet was a lower-cost
delivery channel and a way to increase sales. Studies have now shown, however, that the
primary value of offering Internet banking services lies in the increased retention of
highly valued customer segments. Again customer satisfaction drives the value
proposition.

Thus, banks need to retain existing customers with enhanced personalized services and products,
which best suits their needs and satisfies them the most.

3.3 Utility of CRM in Banks

CRM primarily caters to all interactions with the customers or potential customers, across
multiple touch points including the Internet, bank branch, call center, field organization and other
distribution channels.

CRM can help banks in following ways:

Campaign Management - Banks need to identify customers, tailor products and services
to meet their needs and sell these products to them. CRM achieves this through
Campaign Management by analysing data from banks internal applications or by
importing data from external applications to evaluate customer profitability and designing
comprehensive customer profiles in terms of individual lifestyle preferences, income
levels and other related criteria. Based on these profiles, banks can identify the most
lucrative customers and customer segments, and execute targeted, personalized multi-
channel marketing campaigns to reach these customers and maximize the lifetime value
of those relationships.
Customer Information Consolidation - Instead of customer information being stored in
product centric silos, (for e.g. separate databases of savings account & credit card
customers), with CRM the information is stored in a customer centric manner covering
all the products of the bank. CRM integrates various channels to deliver a host of services
to customers, while aiding the functioning of the bank.
Marketing Encyclopaedia - Central repository for products, pricing and competitive
information, as well as internal training material, sales presentations, proposal templates
and marketing collateral.

13
 360-degree view of company This means whoever the bank speaks to, irrespective of
whether the communication is from sales, finance or support, the bank is aware of the
interaction. Removal of inconsistencies of data makes the client interaction processes
smooth and efficient, thus leading to enhanced customer satisfaction.
Personalized sales home page CRM can provide a single view where Sales Mangers
and agents can get all the most up-to-date information in one place, including
opportunity, account, news, and expense report information. This would make sales
decision fast and consistent.
Lead and Opportunity Management - These enable organizations to effectively
manage leads and opportunities and track the leads through deal closure, the required
follow-up and interaction with the prospects.
Activity Management It helps managers to assign and track the activities of various
members. Thus improved transparency leads to improved efficiency.
Contact Center It enables customer service agent to provide uniform service across
multiple channels such as phone, Internet, email, Fax.
Operational Inefficiency Removal CRM can help in Strategy Formulation to
eliminate current operational inefficiencies. An effective CRM solution supports all
channels of customer interaction including telephone, fax, e-mail, the online portals,
wireless devices, ATMs, and face-to-face contacts with bank personnel. It also links these
customer touch points to an operations center and connects the operations center with the
relevant internal and external business partners.
Enhanced productivity CRM can help in enhanced productivity of customers, partners
and employees.
CRM with Business Intelligence - Banks need to analyze the performance of customer
relationships, uncover trends in customer behavior, and understand the true business
value of their customers. CRM with business intelligence allows banks to assess
customer segments, which help them calculate the net present value (NPV) of a customer
segment over a given period to derive customer lifetime value. Customers can be
evaluated within a scoring framework. Combining the behavior key figure and frequency
to monetary acquisition analysis with a marketing revenue quota can optimize acquisition
costs and cut the number of inefficient activities. With such knowledge, banks can

14
 efficiently allocate resources to the most profitable customers and reengineer the
unprofitable ones. Data warehousing solutions have been implemented in Citibank,
Reserve Bank of India, State Bank of India, IDBI, ICICI, MaxTouch, ACC, National
Stock Exchange and PepsiCo. And Business Intelligence players hope many more will
follow suit.

A word of caution.

Customers may not want what they get: A CRM system apart from improving front office
operations and customer servicing also helps in coping with many services that do not need
manual intervention. These are serviced by channels like IVR, Internet and ATM. Customers can
get account information, information on credit balance, issue instructions for drafts or even
transact through these. At the same time there may be a few customers who still prefer the
traditional methods of banking. Banks need to be flexible enough to continue to extend the
"personal touch" that such customers prefer.

Make changes internally before going for CRM: Many banks have spent a lot of money on
CRM, finding it easier to buy CRM technology than to make the major internal changes
necessary to really make CRM work for them. Unfortunately for these banks, the software has
often failed to deliver.

3.4 CRM is Business Transformation

Too often banks have focused on the wrong areas of CRM. CRM is really about business
transformationchanging the business from services-centric to customer-centric.

Have defined Objectives - Many CRM implementations have been approved without examining
aspects like profitability, turnover etc. CRM implementations should have well defined
objectives, such as RoI, Sales etc.

Consider Complete Life Cycle Costs while budgeting - Measurements of profit are often
constructed to embrace only the initial cost of sale. This is of little use if the ongoing cost of
servicing a customer outweigh the margin of profit that customer is generating. It is critical that
banks have recognized and embraced the importance of the trend towards customer
development, and that this is reflected in actual marketing budget allocation.

15
3.5 CRM Implementation in Banks in India

According to Nasscom report Strategic Review 2004, Indian CRM market was estimated at
US $ 14 million and is forecast to grow to US $ 26 million in 2005. Banking and financial
services segment has a high growth potential and accounts for 22 percent of CRM license
revenue. There are many banks such as ICICI Bank, HDFC Bank and Citibank, which are using
CRM products.

Disciplined work along four dimensions can significantly improve results from CRM initiatives:

Customer Segmentation- Do intensive data analysis and value-based segmentation to highlight

the value of different customer segments and the underlying drivers of that value.

Design programs- Design innovative programs focusing on customer acquisition, cross-sell,

retention, loyalty, and customer service, based on customer insights, experience and industry best
practices.

Design Processes- Design internal and external processes to support and sustain successful
programs.

Good Decisions based on Right Information- The information from a CRM program can often
guide better operational business decisions at many levels of the organization. Gather customer
information at a broader set of touch-points, perform in-depth analysis, and make critical
information available to relevant stakeholders.

Chapter 4 SOCIAL CONCERNS

16
4.1 Consumer Exclusion and Social Responsibility in Marketing Decisions

The radical changes occurring in the micro and macro environment, which dynamically affect
the marketplace and its participants, are widely known. Both the industrial and the academic
communities have to realize the need of a re-determination and re-evaluation of many basic and
traditional concepts of the strategic marketing plan. The defenders of the concept of globalization
argue that it ideally leads to a multi/cross cultural and without boundaries world. In this context,
there is a need of a worldwide community to capitalize effectively and efficiently the
opportunities based on the principles of the "system".

It is certain that technology has a pivotal role in the context of globalization. Moreover,
technology is being presented as the magic "stick" that could eventually overcome any obstacle
or problem and create a worldwide community to sharing equal opportunities in progress,
education, communication and information. This is of great importance only when it is clear that
technology has to be user/citizen oriented and publicly accessible.

Considering the implementation of eventual globalization it is crucial to remember some of the

basic axis of the concept. For example, the creation of a global community has to underline and
incorporate local and regional social characteristics. In practice this can be translated into
specific directions for public and private organizations and their various orientations in order to
provide opportunities at local and regional levels.

What happens in the real world when attempting to create the "global community"? Is there any
re-orientation of the aims and objectives instigated by industries? How do companies target the
market in terms of geographical dispersion? Which are the main criteria when evaluating the
selected target markets? Is there any "space" to serve small or isolated communities? Is there any
possibility, that the traditional marketing concepts as well as global management principles and
foundations, have been used as a cover in various decisions concerning the selection of target
markets, in contradiction to the new role they have to play in the adoption of the globalization
concept?

The focus of this paper is on the companies' role in the implementation of globalization under
their social responsibility's point of view and the re-thinking about some basic marketing
concepts, as a direct consequence. Moreover, the authors argue that companies have to be

17
repositioned in the society as well as in front of their selves, in order to create a new
contemporary profile, in tune with the needs and evolution even of the regional and local
communities. It is known that companies often underline their role within the society as the
meaning of their new profile and orientation. However, the concept of societal marketing having
as its core theme the company's orientation toward the well-being of the customer and generally
the society creates at the same time a field of dialog between the academic community and the
industry.

Marketing should always be addressed to customers in order to gain the answers it looks for, to
all its inquiries. Marketing ethicists have long criticized some marketers for making nonsocially
responsible or even unethical decisions in the market selection. These issues have been referred
to as the ethical issues of inclusion and exclusion and these are the basic axis that marketers have
to follow in order to adopt a new orientation in the context of globalization (An example of an
exclusion decision is not providing a needed product / service to a segment of the population
which needs it ).

It is widely accepted that the social role of companies is manifested by the improvement of the
living standards of the society. But this is to ascertain that when social exclusion occurs, then the
living standards become even lower. Financial exclusion could be experienced in many different
ways. Its key characteristic is the inability of some customers to access necessary financial
services in an appropriate form. It might be caused by macro-economic factors and facts or, of
course, as the result of decisions made by the management of a specific company or even by the
whole industry. Particular conditions related to the marketing mix factors (marketing exclusion),
strongly related to a previous experience (condition exclusions), such as a high - not affordable
price (price exclusion), the lack of accessibility, due to a certain distribution-related decision
(access exclusion), not matching image (as a result of false or "correct" perceptions), may create
barriers between the customer and the company that do not support a further relationship.
However, not all customers experiencing financial exclusion are of any interest for a company.

Financial exclusion also is accepting self-exclusion. A decision made by the customer as a result
of dissatisfaction from a previously related experience. Referring to the specific example of bank
services, offered in isolated areas in India, we can see that in the vast majority of the small
isolated islands in India, not only technology aided banking services, but even traditional local

18
bank branches are not provided. In these cases, when this kind of exclusion occurs, the local post
office branches are servicing customers. However, as probably expected, they are providing only
the most common banking transactions, and of course, from the strategic point of view, any
mentioning about "corporate identity building" and "corporate / brand equity building" is to be
avoided. This is because exclusion decisions have already been taken and implemented.

In any case, particularly when talking about service provision, the customer is definitely an
integral part of the marketing and delivery process. However, the service provider via the
implemented processes and the humans involved is the one with the determining role in its
implementation .Services are becoming more and more a major competitive tool, even in the
physical goods industries, necessitating a close relationship, often called a strategic partnership
Financial exclusion is strongly related to service providing. In some cases the lack of the
provision of financial services becomes unjustified having in mind the opportunities provided by
information technology. This is exactly the case, when referring to the banking industry.

This piece of research reveals the correlation between the geographical and financial exclusion
concerning two geographical remote areas in India. The study identifies the banking attitudes of
a customer segment that hasn't been investigated in the past; those who have never been
included. It examines the expectations and the satisfaction of the banking services, the use of
banking technologies and the usage of available banking products, by the inhabitants of two
remote and isolated islands in Greece. In these islands fully developed financial services have
never been offered.

4.2 FIELD RESEARCH OBJECTIVES

Financial exclusion is often largely attributed to structural changes in the financial services
sector, including increased competition from new entrants in the markets, mergers and
information technology. All these characteristics, resulted in the development of a combination
of tactics related to the adoption of cost cutting activities and increased emphasis on market
segmentation and appropriate targeting, are present in the banking sector in India.

19
The inhabitants of isolated areas cannot satisfy their banking needs although they have a healthy
income profile and financial strength. Only few financial services were traditionally offered in
these areas. Nowadays, due to the increased competition in the market, these neglected customer
segments can be of interest to the banking industry.

There are many small isolated islands with no traditional local bank branches in India. In the vast
majority of them, no technology aided banking services are provided. When available, the most
common banking transactions are often provided by the local post office. Banking needs, the
familiarity with banking services and the use of technology for the consumption of these services
have been the subject area of previous research. However, little is known about the above and the
elements contributing to satisfaction for people who have always experienced financial exclusion
and are not familiar with technology. Lack of awareness in the use of technology and limited
contact with payment systems, such as cheques and credit cards is the norm in isolated areas.
Contrary to common belief, these conditions can accelerate the use of new technologies and
modern financial products.

This study was designed to focus on a distant, isolated population and: Investigates the banking
services currently used by customers.

Explores their banking needs.

Identifies their perceptions of the existing banking services.
Investigates the usage of virtual banking services.
Investigates their attitudes towards the provision of unmanned banking services via
Information Technology.

The research is exploratory, as the available information in relation to customers living in

isolated areas, is insufficient on these elements. However, this paper attempts to examine the
issues further.

4.3 METHODOLOGY Sampling Frame

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Two of the most isolated suburbs, Sitapur and Biswan, were chosen as collecting data from all
the remote Uttar Pradesh cities is almost impossible, due to resource limitations. Sitapur is a
suburb and attracts mostly business class. In 1991 it had a population of 267, living in two
villages. The area of Biswan is somewhat bigger, has a long tradition in sugarcane farming and
attracts manufactures of sugar and allied products.In both places there is a post office, offering a
limited range of financial products.

It is worthy to mention that, it rarely happens to the citizens of those areas to be selected as
respondents to surveys. The inhabitants experience a certain kind of "exclusion" by both the
private sector and the public sector, not only as customers or as audience but even as citizens that
"their opinion counts". So, they feel excluded not only from what is happening but even from
what is being planned or prepared by almost all sectors. As expected, this kind of exclusion leads
them to a greater disappointment in conjunction with the other forms of exclusion. A total of 359
people (representing approximately 51% of the inhabitants of the islands) were interviewed
(table 1). Of those, 190 were interviewed in Sitapur and 169 in Biswan.

The men had stayed in areas other than the place of origin; further more they were significantly
better educated than women. It is not surprising to find that a quarter of the inhabitants are retired
as the population of these islands is ageing, and. The education of the sample is representative of
the educational levels of isolated areas, but not of the whole of Greece, where most people
graduate from high school and the majority continue a higher education. Almost 59% of the
respondents never went to High school, while only 12.5% of the sample had a higher education
qualification. The educational profiles were more extreme in those that never left the islands.

4.4 Data Analysis

Research on the inhabitants' views in these areas is relatively limited. Because of the exploratory
nature of all the issues examined, descriptive statistics are displayed. As a next step in our
analysis, we performed a series of extensive statistical analysis, using T-Tests, chisquare
statistics, in order to identify the exact relationships. More precisely, in order to examine the

21
hypotheses that the opinion of people in the two samples and the fact that the one group has
experienced living away from the island was not related, independent samples t-test was used. To
assess the ranking of different variables, by examining the mean rank differences, Friedman two-
way ANOVA test was conducted. Pearson 2 was also used in order to examine comparisons of
categorical data. For all tests, observed significance level of the test (p) less than 0.05, the
hypothesis that the variables under investigation are independent was rejected.

4.5 FINDINGS

A primary objective of this study was to investigate the banking services currently used by
customers, in order to reveal the provision of those services in the particular areas. In addition,
the study highlights their perceptions about the provided services. In this section, we discuss the
key findings of this study, in order to provide also a new perspective on companies' social
responsibility issues combining those with "exclusion", particularly social and financial one.

As expected, the population of those remote areas is not denied access to financial services, as
long as they make the effort to obtain them. As shown on table 2, almost all respondents have
some sort of bank account. An interesting finding is that a high percentage of the sample
(56.57%), are banking with more than one financial institution. Those respondents who have
lived away does not presents any clear differentiation of those who have spent all their lives in
the island regarding the use a different number of financial institutions from those (Pearson 2=
8.97, p= 0.06).

As far as the conditions of use is concerned, it is clear however that 30.37% of the sample claim
that they need to travel to another island at least once every two weeks to make their required
transactions. Only 5.29% of the sample cited that they are able to make them all in the island
they live on . The results highlight that it is almost compulsory for someone who wants to satisfy
banking needs to visit another island, while all residents travel with a similar frequency (Pearson
x2= 2.11, p=0.72). This cause additional cost to them associated with banking transactions, since
staying away overnight or even for a longer period is often necessary due to the frequency of the
islands' connection by boat and the weather conditions.

22
An interesting finding on a related topic, i.e. technology and its contribution to the areas
wellbeing is that all respondents identified technology as a key factor in the development of their
area (table 4), since it was revealed that they believe that unless the area develops, more qualified
young people will stay there. Similarly to banking services availability, technology was also
found to be far from being adequate. Those that have lived away were even more disappointed
with the services provided, although the observed difference was not statistically significant.

Respondents provided low scores regarding their ability to access to the various banking services
in their area .Only when referring to the most basic services (withdrawal/deposit) this is not the
case. More precisely, the people feel that payment of bills is the service to which they have the
most access to in their region, followed by withdrawal/deposit (x2=1108, a=0.00).

Particularly, those respondents that have been away for a long time, and therefore they have
experienced ATM and other technologies usage in the past, they feel that they do not receive the
quality of service they perceive as standard.

In the in depth interviews, it was revealed that the inhabitants of these islands were experiencing
difficulties in using most of the highly sophisticated equipment, and ATMs were perceived as
such. Some of the people interviewed felt that using an ATM machine is risky, and were not
willing to trust the equipment. This is mainly due to problems with the telephone connections
used at present to support the ATM network.

It was not surprising, after all, that less than 2% of the respondents have ever used a bank's web
site. When they were asked, it was clear that the Internet was only used for information
gathering. None have used the Internet for banking. The inhabitants of these islands were
security conscious, and believed that using a computer to perform financial transactions is highly
dangerous.

Moreover, the exclusion of these places entail also very important social and political
implications.

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 Chapter 5 CRITICAL ISSUES AND TERMS

5.1 Setting socially responsible Marketing Objectives and Strategy

In the free market economies, business organizations are free to choose what goods and services
they produce, the processes by which they produce as well as the markets they aim to serve. So,
a social service does not necessarily mean the offer of specific additional services to particular
customers. It means the company's orientation in offering its products/services in a more "social
way".

In market economies where companies do have a high degree of autonomy, the manner in which
organizations make strategic decisions, taking into consideration the Social Responsibility
notion, becomes in itself a matter of discretion. As Frederick et al, (1992) suggests there are 3
broad views of the social contribution of the company. The so called "social obligation", adopted
by companies which act, in accordance to what the law requires. The 'social responsiveness",
where the companies are more open to moral issues and influenced by involving the acting social
groups, and finally, "social responsibility" under which companies recognize a wider spectrum of
relationships with the different stakeholders and enhance certain levels of interaction with such
groups.

So, it is important to recognize that the concepts of "social responsibility" and "any kind of
exclusion" are not theoretical claims or even new, "smart" ways of determination of a
"competitive advantage. Instead, it is a certain philosophy of doing business with serious
consequences to society's wellbeing. The real importance of companys social responsibility has
not to do with its reactions to particular facts or events, but to their view, to their contribution
and role to the society. Therefore, the subject of social responsibility of a particular company
shouldn't be left to ones managers hands, but it should be the core concern behind a company's
existence.

Apart from Societal Marketing, which should also focus on a long-term orientation towards
customer satisfaction without excluding of course profitability and stable growth, Relationship
Marketing focuses on the creation of long-term relationship between various participants -

24
members of the particular network, involved in a process based on the axioms of "mutual
exchange and fulfilment of promises".

Moreover, as Kantner claims a "successful partnership manage the relationship, not just the
deal". Therefore, the new emerging marketing paradigm could thus be called relationship
orientation, where strength and quality of the relationship as well as the quality and profitability
of the relationship play significant role. But the question arises exactly there, i.e. in the definition
/ identification of the "various participants-members of the particular network who are going to
be involved in a relationship"! Who decides the criteria under which somebody will become
member of the "network"?

Even, the societal marketing concept holds that the organization's task is to determine the needs,
wants and interests of target markets and to deliver the desired satisfaction more effectively and
efficiently than competitors in a way that preserves or enhances the consumer's and the society's
well-being .

So, it is already clear, that the societal marketing concept requires the promotion of "proper
consumption values" so that "long-run consumer welfare" may be attained. Thus, it requires that
the business organization includes social, ethical and ecological considerations in its, product and
market planning. But, how much emphasis has been given to the particular target markets and
what balances with society as a whole?

Referring to the traditional Marketing concepts of "segmenting - targeting - positioning", one

could claim that the "focused targeting" is among the most successful strategic options. The
question is about the criteria this strategic decision will be implemented. The main purpose of
segmenting is to create substantial, measurable, accessible customer segments in order to target
effectively and efficiently in the future.

Nowadays, "customer valuation" forces to a more rationalized way of usage of the above
mentioned strategic tools, since the customer of the company becomes the "consumer of the
wealth of the organization". As a result, value is seen as something that has to be extracted from
customers to create shareholder value and all customers should be shown sufficient returns to the
organization.

25
Therefore, we strongly believe that under the scope of re-formulating the companies' roles in
society, one should re-define the segmentation criteria as well. Although traditionally, this has
been implemented based on product-related variables (i.e. product usage and product benefit)
and consumer related variables (i.e. demographics, lifestyle, self-concept etc), communitys
"well-being" has to become the "compass" of segmentation criteria, setting.

The traditional marketers claim that "consumer/customer is the focus" and that consumer's needs
and desires are the raison-dieter for marketing (the marketing concept can be described as an
integrated effort aimed at providing customer satisfaction). Is it not the appropriate time to
focus on the consumers' well-being and make use of the several variables according to this
notion of wellbeing? Otherwise, the claim "consumer is the focus" is not totally true and it
should be modified to "consumer of our convenience is the focus".

5.2 Customer Dialogue Builds Loyalty & Profit

Customers and potential customers are getting more sophisticated. The very marketing
techniques used to separate the customer from their hard earned money are, helping, by training
both the old and newer generations of customers to be more wary and smarter. Customers want
to trust the companies they buy from and in some case may even value a relationship of a sort.

Managing Customer experience is the biggest challenge faced by businesses today. The ability to
acquire, retain and grow customer relationships is determined by an organization's ability to
quickly adapt to changing customer needs. This demands an integrated approach to managing
customer interactions.

5.3 Customer 360

It is in line with these needs that a concept called Customer 360 has been generated - an
integrated framework that addresses every point of the customer lifecycle of a business - from
customer support to back office to customer analytics.

What is Customer 360?

Customer 360 is a proprietary framework for integrated Customer Lifecycle Management

(CLM) services that touch every point in the customer lifecycle of your business. Customer 360
integrates both direct and indirect interactions of a customer along the entire lifecycle from

26
prospecting to acquisition to service to retention while also delivering insights through customer
analytics. From a business point of view, this translates into reduced service costs, increased
business and enhanced profitability. From a customer centric viewpoint, it translates into
customer delight and enhanced customer satisfaction by catering to their current and future
needs.

Customer 360 comprises of:

Customer Interaction services

Back-Office services
Customer Intelligence service

How will Customer 360 benefit your organization?

Traditional delivery models address short-term business objectives like the need to attract new
customers or provide support - which caters to a single customer touch point. This approach
lacks a holistic view - in terms of customer experience across other touch points and insight into
customer's needs and behavior. Customer 360 is an integrated solution that can ensure market
adaptability, competitiveness and assured business.

5.4 Inbound Customer Marketing Research Report

The world of targeted marketing is moving on apace. Organizations no longer rely just on direct
mail to get their message across. The norm is fast becoming: multi-channel with the call centre,
website, e-mail and SMS all joining the fray; multi-stage where a number of contact events are
tracked prior to making the sale; and insight driven, where consumers are targeted based on their
predicted behaviours or the occurrence of specific events in their lives.

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 Chapter 6 SWOT ANALYSIS OF RETAIL BANKS

6.1 Banking on an Online Future

These are the following opportunities and threats posed to retail banks by online banking.

The development of online banking has proved a mixed blessing for retail banks. By allowing
customers to service their accounts online, online banking represents a clear opportunity to
reduce the costs of face-to-face banking.

However, the study suggests that over a quarter of Internet users are now using online banking,
the majority of customers are proving slow to take it up, and even those who do still demand the
reassurance of one-to-one personal support, whether provided online or over the telephone.

A survey underlines the fact that customers valued the personal touch, with 63% citing
responsive service and being treated as a valued customer as the most important factor driving
their overall satisfaction with their bank or other financial institution.

The problem is that for most banks, providing the personal support that customers value so
highly can rarely be justified.

But at the same time bankers admit that the single biggest reason that customers didnt effect was
the inconvenience of changing banks.

6.2 Cost Trap

It seems that banks are caught in a classic cost trap: Customers want detailed, one-to-one,
personalized advice, yet neither they nor their financial providers are prepared to pay for it. In
the past this circle was squared through the medium of an independent financial adviser (IFA),
offering free advice in return for the opportunity to sell financial products on commission.

However, the threat is pensions mis-selling have made many consumers wary of the motivation
of the IFA, while the introduction of CAT standards for a number of financial products is cutting
into the commission available to fund, free financial advice.

28
With the coming of CAT, the selling of financial products will have to be done on a simpler,
more direct model, says Dave Patel of financial software developers DPR Consulting: You
cant have five layers of people taking 1% commission and then managing that product for the
customers lifetime. A lot of the banks are interested in getting away from IFAs and owning the
client directly.

Banks motivation to move into the provision of advice will be as much about, customer
retention as selling products the challenge is to be able to do it cost-effectively. He believes
that the answer is for banks to invest in online, self-service products which use knowledge
management techniques to automate the provision of advice which is nevertheless personalised
to the user.

A suite of products should be created which can be tailored by banks to offer a detailed wealth
check to their users. Users need to spend about 20 minutes entering their details, but in return
they receive instant feedback, and by the end will have created an online portfolio from which
they can continue to manage their affairs.

A financial adviser probably has knowledge of no more than 100 products. Its also more
personal that one can say he does not want any IT investments, or that he only wants
environment friendly funds. And the software will spot contradictions in his responses.

6.3 The Rewards

The payback for the bank is in the amount of information about customers the online check
delivers - up to 300 items of information on employment, home ownership and so on. This
approach is most applicable to the mass affluent customer with over 10,000 in liquid assets.

Once implemented, online advice systems can be made available at no extra charge to less
valuable customers, and also be used to underpin the personal advice given to customers with
more complex affairs.

With several retail banks, there seems to be a great deal of caution about creating more and more
online capability.

29
E-commerce generally has failed to live up to expectations, and the withdrawal of players like
First-e from the market has made the prospect of Internet-only banking as distant as the paperless
office.

There are lots of nice things you can do online, but you have to look at the costs and benefits,
says Angela Mackintosh, marketing director of multi-channel bank If.com. Its like the 1980s
when people did all sorts of computerised stuff on the basis that you could do it, rather than that
it was what the customer wanted.

Ms Mackintosh says that If.com took a conscious decision when it launched not to offer financial
advice: About 60-70% of our mortgage business comes from intermediaries, and obviously if a
financial adviser introduces business then that creates the opportunity for them to speak face-to-
face with the client. In the end the customer doesnt pay anything for that advice. The product
costs the same, but we do less advertising and pay the intermediaries what we would normally
pay for acquiring customers through advertising.

6.4 Understanding Your Customer Base

However, the ability at any time to drop out of the website and contact a human being is seen, as
equally important.

The problem for direct operators is that they are heavily dependent on branding, and therefore
cannot switch advertisement spendings into customer acquisition through intermediaries. And,
like all players in e-commerce, they are discovering that the opening of new channels to the
customer does not necessarily mean that old ones can be phased out.

There is an assumption that people who are technophiles and who use the telephone and Internet
a lot will do that across the board, but thats not so. A lot of people are happy to do their banking
online but for other things they want to see someone.

A lot of the basic transactional customer calls are going onto the web or to SMS banking via
mobile phone.

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6.5 Cautious Future Expected

Banks have indicated that while online advice is something that they are looking at in the
medium term, in the absence of any strongly expressed customer demand, it is unlikely to be a
priority. Either way the tradition of getting financial advice funded by the backdoor looks set to
continue for some time.

People are not prepared to pay the money but there is a balance between paying the money and
spending the time. Ultimately the more affluent will pay for advice simply to free up their time.

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Chapter 7 RELATIONSHIP BANKING IN TROUBLED TIMES

In the present uncertain economic climate, can banks and customers benefit from an actively
managed relationship?

Relationship banking and its effectiveness in todays challenging economic circumstances. It is

observed that despite serving the economy well, banks are generally focused on distribution at
the expense of understanding the needs of their customers. The growing fears of recession may
be reflected in how banks deal with their customers. It can be argued that a banks relationship
with a customer is driven both by the current macroeconomic outlook and by the banks
assessment of the impact of recession on the customers business.

7.1 Strong Power Base

The big banks in India provide about 75% of domestic lending, and as such enjoy even greater
power than their counterparts.

7.2 A Key Element

In conclusion, relationship banking is the key to successful banking. The bank gains a better
knowledge of the customer, the business and their needs. The customer enjoys a partnership with
their bank, allowing both sides to manage issues in good times and bad. Despite technological
advances and change, banking remains a people business, and the successful committed
interaction of people is the foundation of true relationship banking.

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 Chapter 8 CRM IN FINANCIAL SERVICES SECTOR

CRM is one of the primary initiatives in any industry and more so in financial industry sector,
where competitive pressures from both financial and non-financial services are fueling the
movement toward CRM as the companies are systematically raiding a banks territory to pick-off
the most profitable customers. Thus, one has to begin with a financial institutions strategic
goals, develop a consistent technology platform that is scalable and support across delivery
channels, train people at all levels and incorporate a customer-centric approach to every
customer interaction. This article gives an overall picture of CRM with reference to financial
service industry.

Customer relationship management (CRM) is one of the primary strategic initiatives in industry
today, regardless of whether the company serves retail or wholesale customers, whether it
provides services or manufactured goods. In the financial industry, the movement towards CRM
(also known as ERM for enterprise relationship management ) is being fueled by competitive
pressures from both financial and non-financial services companies that are systematically
raiding a banks territory to pick off most valuable customers. Although CRM is not a
technology, modern high-tech applications, from relational databases, to data mining, to
computer telephony integration (CTI), to Internet delivery channels, are providing the means to
implement customer relationship strategies today.

Estimates on the size of the CRM market vary, possibly because of the difficulty in defining
CRM. International Data Group predicts the CRM market will grow from $1.9bn in1998 to $11
bn by 2003. AMR Research says the CRM market will grow from $2.3 bn in sales in 1998 to $
16.8 bn in 2003.

8.1 Defining CRM

One of the greatest problems with CRM is what it means. The whole CRM concept means
different people, depending on what they want to do, says Jimmy Sawyers, consultant,
Reynolds, Bone & Griesbeck, Memphis, TN.

33
 Financial services that are transaction based, such as credit card companies or bill
payment providers, want to manage the customer relationship to drive up transaction
volumes and squeeze out expenses from individual transactions. One customer generally
has one account and it doesnt matter if others within the same household have accounts.
The goal is to provide incentives that get the customer to use the service more.
Transactions become commodities. The customer responds to price incentives and loyalty
programs. There is almost no opportunity to cross-sell to the individual customer.
Consultative financial services, such as investment advisors and financial planners, use
CRM to deepen the trust the customer has in the service provider in order to increase the
fees for services. These companies earn fees regardless of the number of transactions the
customer makes. They may be able to increase their fees base by cross-selling additional
financial services to individuals, or obtaining additional relationships from the same
household.
Retail oriented financial institution defines CRM as a combination of the two extremes-
managing the entire customer relationship in order to reduce costs and increase the depth
of the relationship with the customer. Generally, reducing costs means getting the
customer to use less expensive delivery channels. Increasing the customer relationship
means either obtaining a larger share of wallet, or increasing the number of fee-based
services the customer uses, or both.

8.2 The Evolution of CRM & the Challenges of Personalized E-Support

Historically, customer relationship management has been the specialty of community banks.
Bank management came from the community. Bankers knew their customers, their families, and
their businesses. Lending decisions were based as much on good payment histories as on good
standing in the community. Customers gave all their business to one bank, appreciating the good
services they receive as a reward for their loyalty.

As banks automated back-office functions with mainframes, and the number of products and
services a bank offered grew, banks found it increasingly necessary to replace branch based
filing cards with a central information file (CIF). In early 1970s, CIFs in even the largest banks

34
were centrally located file cards. But by the mid-to-late 1970s, these card based systems gave
way to mainframe-based, hierarchical database systems.

8.3 Customer Support A historical perspective

The Customer is King. This mantra, although used for a long time, has not been put into practice
until recently. Forget the ideology of royal treatment; customers were not even treated with
dignity by most organizations. As recently as the 1970s and 80s, the concept of customer support
meant that organizations were doing a favour by answering a few questions for the customer on
the phone after putting them on hold for an hour! Standing in line to buy something was
common and expected. Remember when the customers had to go to the airports to buy tickets
only because the airlines kept them there? Organizations simply lost touch with the realization
which they existed because of these customers.

The 1990s brought two new concepts that challenged the prevailing business landscape:
Deregulation and the Internet. These forces brought down the barriers of entry, resulting in an
environment of intense competition. Stores faced competition from on-line start-ups. Traditional
bricks-and-mortar banks fought for customers with online or virtual banks. Airline tickets were
increasingly purchased from the convenience of your home. The explosion in Information
allowed consumers to compare features, and prices across multiple providers. Products became
commodities and prices could not be lowered further to ensure survival.

Customer service became the only major differentiator in many cases. Customers received what
they have always deserved respect. The customer was now truly the king. Business customers,
although always treated with more respect than individual consumers, were more or less ignored
in the early stages of the Internet boom. The emphasis focused on expanding the consumer base
regardless of positive cash flow, revenues, and margins. The demise of many dot-coms brought
an epiphany. Companies realized that they needed to focus on their enterprise customers. The
advent of e-CRM applications was the first big step toward providing better support to the
strategic business customers. Although these solutions provided automated self-service to
customers, they still treated all customers the same. Furthermore, the focus of these applications
is more on improving call-center productivity. Clearly, these applications add value and help
many organizations execute their CRM initiatives. However, they are not effective in meeting

35
the needs of an organizations strategic enterprise customers. Each enterprise customer has its
own needs and craves personalized support. 8.4 Evolution of Customer Relationship
Management

Although there are quite a few vendors providing CRM related products and services, there is
still a lot of confusion around the concept of CRM. CRM is not just an application or a
technology that can be thrown at the customer satisfaction problem to make it go away. CRM,
essentially, is a strategy that involves applications, processes, policies, business context, and
people, to enable companies to manage and increase profitable relationships with their
customers. An enterprises strategic customers expect top-notch treatment. They want the vendor
to understand their needs. They want companies to build a strong relationship with them - on a 1-
to- 1 basis.

8.5 Current CRM and E-support Environment

There are currently over 200 CRM software vendors and the number continues to grow.
Although, there are various types of applications included in CRM suites, as described earlier,
the core application within the CRM landscape that truly builds customer relationships is the
customer service application. Other pieces, though useful, are focused on helping the vendor
rather than the customer.

Many of these applications were initially focused on providing an environment to improve the
productivity of call-centers. In addition, some of these applications integrated message queuing
functionality to provide a common environment for all channels. So, whether the customer was
trying to reach the call-center by making a call, via e-mail, by fax, or through the Web site, their
query is prioritized and channelled through the same mechanism. Most customer service
applications now provide Web-based self-service features for companies to offer their customers.
Customers can look up their basic information like billing, order status, etcetera by logging in to
the vendors Web site. While this solution works for a B2C model, for enterprise customers with
hundreds of users and hundreds of products to support, this simply doesnt work. Enterprise
customers demand personalized support in order to access their information quickly and easily.
In the era of information-glut, they want specific and relevant information.

36
Companies are trying to manage relationships with their customers, partners, and suppliers in a
personalized and automated manner. True personalization is not easy as each customer has its
own needs and requirements. The issue is further complicated by the fact that these customers
are in different vertical industries and also geographically dispersed making their requirements
even more unique.

8.6 The challenges of personalized Enterprise

E-Support While certain aspects of personalization are relatively easy such as allowing
customers to create their own preferences on the Web site the process of providing only
customer-specific information, especially to enterprise customers is challenging. These
challenges include:

Relevant information: One major issue that most organizations face is finding
information pertaining to each customer. Most often, this information is buried in
disparate databases and extraction of relevant information at a customer level is a
Herculean task.
Information Updates: As the information is constantly evolving, continuous updating for
customers reference is required. In most cases, information is updated on an ad-hoc or
periodic
Basis resulting in delayed and inaccurate information and high overhead costs of
updating the information.
Publishing of information: Since the information resides in various diversified functions
within an enterprise, publishing of information is a major problem. Traditionally,
publishing was restricted to certain IT professionals and business users who typically
forward their documents to these IT groups for publishing on the Web. This approach is
not only bureaucratic, and expensive but also excludes a wealth of tacit and explicit
knowledge that never gets published due to lack of tools.
Personalized Applications: Some vendors offer personalized portals based on custom
profiles created by users. Although these models work for the consumer level user, they
do not provide value for enterprise customers. It puts the burden on users to define in
what information is more relevant versus not. Business customers need an autonomous

37
 environment can all their users interface with the vendor enterprise and get the relevant
information quickly
Communication: A relationship is based on two-way communication. Most esupport and
relationship portal solutions are designed for enterprises to communicate to the user. A
critical challenge is to enable a process where business customers are able to truly
interact with the vendors, beyond the usual e-mail and phone options.
Security: Security continues to be a major issue for organizations especially for -based
support. User authentication and management can be a nightmare for vendors trying to
manage thousands of users coming from diverse locations.
Scalability: When hundreds and thousands of users try to get to the same information in a
central database, scalability is a big issue. Response times get slower and systems can
breakdown. Companies are trying to solve the scalability issue by throwing more and
more powerful hardware at it.
Deployment: Deploying a CRM solution is a tough and lengthy process. Deploying a
Web based support system is even tougher. Furthermore, deployment in a personalized
fashion focused just on enterprises that can be a rats nest if not implemented carefully.

8.7 Overview

More than just E-Support As competition intensifies, organizations need to increase their focus
on enterprise customer relationships. An urgent need exists for solutions that enable enterprises
to manage relationships with their key customers on a personalized basis. Most of the current
solutions fall short in providing a truly scalable model, where customers receive an autonomous
and personalized environment for their support needs over the Web.

Each customer gets their own personalized Weblet, with real-time information that pertains only
to them. Customers are able to get specific and relevant information -quickly and easily - to
resolve any problems or issues without going through numerous steps or phoning the call-center.
Enterprises cut their costs by drastically reducing the number of calls into the call-center. Since
these Weblets allow bi-directional communication, customers can give instant feedback to the
enterprise. The solution is not just about providing support on the Web. Its about managing
relationships with key customers.

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The following diagram shows how solution integrates disparate databases within the enterprise
and provides targeted Web-based support to the business customers: patent-pending mediation
technology provides a unique, innovative, and intuitive architecture that automates an
enterprises collaborative ecosystem comprising of customers, partners, and suppliers. The
solution enables companies to interface with multiple customers through a mediator, allowing
them to deal with enterprise customers on a one-to-one basis, without creating separate
processes. Organizations can achieve a return on investment of 20X of their upfront licensing
and implementation costs. The solution not only provides a major competitive differentiation, it
also enhances an organizations shareholder value.

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 Chapter 9 CUSTOMERS WANT- BIG FACTOR

9.1 Ten Myths About the Customers

To become customer centered and customer preferred, a firm must change its orientation and
design its business capabilities, infrastructure, and measures of success from the outside-in by
using the customers' perspective. There are several real issues to overcome to do that. The first is
that a firm's current beliefs about its customers tend to drive its policies, decision making, and
not only what its employees do with customers, but also what they don't do. This becomes so
embedded that firms practice this without realizing it, and thus resulting in a great resistance to
new ideas about customers when the old ideas are so heavily ingrained. The automobile
company, for example, did not want to hear that customers were more interested in their coffee
cup holders than other attributes of the vehicle. "We build cars for driving, not for drinking
coffee" was a typical example of how a mindset about customers can filter out and resist hearing
ideas or concepts that do not match prior conceptions about customers.

9.2 Retail Bank:

Let's Ask the Customers At one of the largest, most successful banks in India, in a survey,there
were in a quandary because tens of millions of rupees had been expended on telephone contact
centers, yet the volume of calls was growing at such a rate that the capacity of that relatively new
equipment would be exceeded in a year or so. "Who's going to tell him?" asked one executive,
referring to their CEO. No one made eye contact. Some examined the ceiling tiles, while other
execs scrutinized their feet, apparently concerned that some shoelaces might be loose and in need
of tying. The silence grew heavy. Ultimately, as an outsider, I felt it was okay to fill the void and
speak. "If a customer comes into your bank it costs X to handle the interaction, but if they call
your contact center it reduces your cost by 90 percent?" well the answer is yes. Not many
executives realised this aspect to serve customer at a lower cost. . "Thus volumes are growing,
because the more you can change customer behavior by providing a desirable, less-costly access
channel, the more profit you will make Eventually all companies want customer contact to be
conducted at low-cost channels, rather than via highcost brick-and-mortar branches". A customer

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vision has to be developed, outside-in, of an ideal bank and of the ideal customer experiences
during touch-point interactions with a bank's telephone contact center. One element of this vision
is what the customers' view of how the bank could provide greater benefit to them by contacting
them at home (under certain circumstances, which the customers would highly value). Besides,
how an offer of a product during a service conversation (cross-sell) would be feasible.

Securing an actionable, outside-in vision of business from a customer can enable it to stay up
with newly emerging needs and wants and to overcome the myths that currently have an impact
on the organizations effectiveness.

Ten common myths about your customers.

1. Myth 1: Customers want the lowest priceperiod.

A powerful concept to remember is that a product or service offering is rarely a
commodity that can only be differentiated by price. The fact is that the savvy business
can differentiate even a roll of steel, arguably one of the most rock-solid examples of a
commodity. The traditional way to compete with a commodity is to lower your cost of
manufacturing, and then lower the price to drive additional sales and "make it up on
volume." Consider how to attract and retain customers on a value proposition other than
price: The value-added expert advices that can be given to help the customer better use
that product. In many cases these can be leveraged to provide great value to differentiate
a firm or product and can often warrant a higher price, although the competitors offer a
lower price.
2. Myth 2: We know what our customers want (or don't want).
Perhaps the greatest inhibitor to go beyond "Have a nice day" service platitudes is the
belief within a firm that its prior history and years of experience result in perfect
knowledge of what customers want and do not want. Virtually every firm at one time has
felt it could skip the development of requirements via "customer visioning" and go
straight to implementation of new processes and channels for customers. After all, the
firm has been in that business for (number of decades here) and no one knows their
customers better than they do. There is, in fact, someone else who better knows what the
customer wantsthe customer! In order to develop an ideal, customer-defined future
vision of the firm, there is no other substitute. That does not mean that the company has

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 no valuable information at all. Front-line, customerfacing personnel can be a valuable
source of information regarding the performance of current processes, channels, and
product or service offerings. Customer complaints and customer service contacts provide
excellent feedback on what's not working. The important thing in those cases, however, is
that the information still come directly from the customer, not from ones intuition due to
years of "being in the business." However, over time it can become less clear which of
your beliefs regarding customers is actual, literal customer feedback versus intuitive
beliefs formed and reformed over the years. The result can be a strongly held set of
beliefs, such as those of the bank contact center, that are rigidly driving the wrong
actions. Even if known once, exactly what customers wanted, in the current environment
of rapidly rising service levels, such desires are fast-changing and if one has no formal
vehicles to monitor these, then do not know them. Finally, while front-line employees
may know what customers like or dislike about current products and services, they often
lack the ability to place themselves in the customer's position to envision creative new
offerings and interactions that would appeal to deeply hidden or newly emerging
customer value systems. By probing directly with the customers why they want things
and understanding how customers get value/benefit from the things
they wantit is possible to jointly envision and develop creative, new breakthrough
ideas, which brings us to the next customer myth.
3. Myth 3: Customers cannot envision what does not exist; focus groups are a waste of
money and, besides, no Sony customer ever envisioned the Walkman.
This wonderful myth is born from many firms expending great sums on research, and
sitting for hours behind one-way mirrors watching ineffective focus groups that yield
little of value. Anything, done the wrong way, can be disappointing and ineffective,
including focus groups. It may be true that engineers, not customers, envisioned the Sony
WalkMan. Probably no customer spontaneously may have said, "Eureka, I want to take
my big console radio and strap it to my head for music while I am out joggingif only
engineers could reduce the size of the components and then come up with cool-looking
headphones." But that is not because customers lack the capability to envision things that
do not exist. Rather, it is because market research techniques often do not generate a line
of thinking that breaks the person out of using only currently available and existing things

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 to develop their vision. With such approaches, Sony could have arrived at the same idea,
probably earlier, and from a customer. And with such approaches, any business can.
4. Myth 4: Customers do not want to be telephoned at homealways.
As the banking client learned, it is unwise to project ones own personal prejudices, likes,
and dislikes onto the customers. In fact, customers in visioning workshops for many
different industries have stated that the primary problem with being contacted at home is
that it is almost always by a blanket marketing program and not targeted to their specific
interests. Customers hate to be contacted when the call has nothing uniquely to do with
them, but is merely part of a mass-marketing campaign: "Don't call me about your great
special on boat insurance if I don't own a boat!" However, if a customer owns a particular
investment product and something happens that could impact them personallyperhaps
new legislation that could have tax implications they would actually appreciate
receiving a targeted, personalized, individual-specific contact. "Except during the dinner
hour. Always."
5. Myth 5: Customers do not want to be sold to, when they telephone for service. This
is a common misconception resulting in missed opportunities in all industries to provide
great customer value during touch-point interactions. As with all these items, there is
both opportunity and risk involved. The risk with this one is twofold: First, never try to
sell a customer something until you have handledto their satisfactionwhatever the
issue was for which they originally called. Second, never make a generalized, mass-
market, blanket offer. The opportunity here is reciprocal: After the customer's issue has
been addressed, it is almost always appropriate to make them an offer as long as it is
tailored and targeted to their personal interests and values. "Mr. Thompson, I'm glad we
could resolve that for you. Before we end our discussion, I see that you are an avid golfer
(perhaps Thompson used his credit card to charge a set of clubs or a golf cart rental). As
you may know, our travel service department has a special offer for two nights at the
Hilton in Myrtle Beach, with free golf, for only $99.00 next weekend. Would you be
interested?"
6. Myth 6: Customers do not want to give us information about themselves.
In today's world there are well-publicized and growing public concerns regarding the use
of personal information. These include, but are certainly not limited to, real issues of

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 invasion of privacy, breach of confidentiality, identity theft, and plain old irritation at
being contacted by someone who has obtained one's phone number, postal address, or
Internet address. However, customers also place a high value on the benefits and value
they can receive (see Myths 4 and 5 above) from targeted, individualized, and customer-
specific interactions. For example, the term tailored and personalized crept into their
vocabulary by the late 1990s. During the early 2000s, personalization moved from a
distant rumble of occasional customer delight to a roar of expectations. And to receive
the benefits of targeted, personalized products and services customers must now enable
their vendor with relevant data about themselves. In return, the firm must secure the data
(with controlled, employee-only, and role-appropriate access) and then use it only for the
purposes for which it was provided. With these assurances, and some well-earned trust in
your brand, customers will share information with you. This is a highly volatile and
critical issue that represents both opportunity and risk to the extreme. Personalized
interactions can literally become your most powerful loyalty generator, but if you misuse
customer information and lose their trust, you can lose not only your customers, but also
your market
7. Myth 7: Customers who call hate to be transferred. While this statement appears to be
intuitively correct, the reality is actually counter-intuitive and it depends on why they are
calling. If a customer contacts for general information regarding your business, products,
prices, and so on, they may well expect to get an answer from their first point of contact.
However, if they want expert advice, they do not expect the first person who answers
incoming calls to also be an expert in all things. In this case, a transfer of their call can
actually reassure them they are going to the "right" person who has the expertise.
However, that should occur with no more than one transfer.
8. Myth 8: An apology is never enough (so we don't do it). A common myth that drives
the behaviour of customer-facing employees is: Our customers don't want an apology;
they only want some form of personal compensation or concession for mistakes. In many
businesses that myth is not only accepted, culturally, but it is an actual business practice
to never admit or take responsibility, for fear it would only encourage the customer to
feel aggrieved and would somehow later be held against them. This is almost universally
incorrect. In fact, customers repeatedly say that the most powerful thing a firm can do

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 after an error is to admit itand apologize. However, in order to have the greatest effect,
the apology should also be accompanied by assurance that action has been taken to insure
the error will not occur again. For example, an apology during the customer interaction,
followed by a letter from management that the reason for the mistake has been
determined and that corrective measures are now in place, can actually increase loyalty.
Customers are often delighted with how a firm responds to and corrects a mistake.
Customer defections in those instances were actually less than the defection rate of
customers who had experienced no problems at all.
9. Myth 9: Our customers and their needs are unique. Another common misconception
is that customer needs for a given firm, industry, or geography are unique and quite
different from those of other firms, industries, or geographies. Virtually everyone needs
responsive service, and easy, timely access to their vendors, irrespective of industry.2
However, the customers of a stock brokerage will place a higher priority on quick and
easy access to placing their orders than customers of a locomotive manufacturer. The
customers of an accountant will more greatly demand precision than customers of a hair
stylist, although it is a need shared by both. Within an industry, customer segments will
tend to have similar needs but different priorities, e.g., financial services where older
people value safety over growth and younger ones tend to prefer taking risks in order to
attain growth. Both groups need growth and safety, but to attract and retain each of them
requires a dramatically different offering by the industry. Beyond the prioritization or
importance weighting differences, we also find that approximately 30 percent or so of the
actual customer needs are often unique to a specific industry or customer set. What is
important here is:
A firm can begin its customer journey and focus on some basic needs that are relatively
common to all customers
Once the firm can "walk" and provide such basic loyalty-driving needs, it can progress to
"run," via market research to determine the 30 percent or so of unique needs and any
prioritization differences that may be necessary to attract and retain segments.
However, it is dangerous to then assume that when a business model is successful for one
customer set that it can be cloned as "our standard set of corporate processes" and will
work around the world. It's that 30 percent of variability that can still kill the business.

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 10. Myth 10: We know what our customers need (not want . . . need). This myth or
misunderstanding is tightly linked to discussions that firms founded on their own internal
expertise and product knowledge often continue to believe that, due to their product
expertise, they are the experts on what customers need. This is quite different from the
issue of what customers want. It assumes that product expertise equates to also knowing
what is best for the customer. In fact, firms with extreme product competence may be
even less likely than others to know the (changing) needs of their customers. These firms
are also the ones less likely to have processes and competencies for listening,
understanding, and responding to customers in a rapidly changing environment. Beyond
that, even the companies that listen to what customers want almost always lack the
insight required to know and fully leverage what the customer actually needs and would
most value. This is because only the customer completely understands how they get value
or benefit from something they want, and that underlying benefit is why they NEED it.
Understanding what they want is good. Understanding why they need it is critical to
creatively develop new products and services to better meet those needs. And that is why
the customers, not only the company, must be included in creative visioning of needs-
based, future products and services (see Chapter 9, "What They Need: Customer
Visioneering").

9.3 Five "Doing-Areas"

We can categorize what customers want to do on the Web under five "doing areas," as follows

1. Evaluate competing businesses and products.

2. Select products and transact with e-service providers.
3. Get help.
4. Provide feedback.
5. Stay tuned in as e-customers.

These five areas are all important. Customers will operate in one area more than another at a
given point in time, depending on where they are at with what they're trying to do. We can think

46
of the five areas as a rough progression, from evaluating businesses and products to becoming
customers to receiving after-sales support and information

1. EVALUATE COMPETING BUSINESS AND PRODUCTS Customers have to decide

between businesses and products. Web sites are a part of that decision-making process. When
deciding among businesses, customers will either actively or passively get information from a
company's Web site. Customers want to make sure they like a company enough to do business
with them. Customers are more likely to actively search for, and evaluate, information on a
company when they are new to the market for a product. They're likely to look at parts of the site
that give them an idea of what the company is up to. Customers who already have dealings with
a business are less likely to actively seek out their general company information. However, they
may actively seek out information on a particular incident or company activity if it affects their
preference for that company.

Potential and existing customers will get a feel for a company just by being on its Web site. How
customer-centric the site feels will give them an idea of the quality of the customer service they
can expect. How well the company has used technology will give customers an idea of how
switched on it is.

Of course, a company must be the type a customer is looking for, and must offer the type of
products a customer wants. The search for, and evaluation of, product information is key for new
and existing customers. Customers will evaluate different products offered by one company and
by different companies. Sometimes that evaluation will result in a sale (either online or offline)
and sometimes it won't, but it is all critical to the decision-making process. Customers may also
evaluate product information available in other forms, like brochures, as part of their decision-
making process.

The importance of being able to find useful product information has been reinforced in GVU's
tenth user survey. The survey showed that the provision of quality information is the most
important attribute of a vendor's site. In addition, the greatest cause for customers to leave a site
is not being able to find the information they were looking for.

2. SELECT PRODUCTS AND TRANSACT WITH E-SERVICE PROVIDERS

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Customers are faced with a lot of choices when they go to a Web site. They will make selections
to personalize their experience and the services and products they receive. That selection will
comprise the choices they make to get around your site and identification of the things that they
want or that particularly interest them. This may involve choosing a particular product there and
then or setting themselves up to receive information and services later.

And sometimes, that selection will lead to a transaction. This transaction may or may not be
financial. When customers transact with you, they give you something in return for a service.
Sometimes that is simply information, for example, when they register to receive particular
information online.

Customers have to select the path they take through your site as much as the particular services
and products they want. They are using your Web site to create a context that is relevant to them
personally. Selection, then, is the process of personalization.

When making their selections, customers rely heavily on tools to seek out personally relevant
information, such as site maps, search functions, indexes, and shortcuts. They also use tools that
help them receive personally relevant information and services, such as entering personal
information to create profiles and receive personalized content.

3. GET HELP

Customers may seek help at different times, as part of their evaluation process or after they have
made a selection and transacted. Customers will also seek out help on different levels: getting
around the site, evaluating what is best for them, and getting the best out of something, and
solving a particular problem.

Customers will interact with your site to: Work out how to use your site. Customers want to
learn how to get around and optimize the use of your site as quickly and easily as possible. Find
out how something works once they have it. Resolve a problem online. Find out where to go,
or whom to talk to, if they have a problem that can't be easily resolved online. And don't forget, a
Web site is only part of a customer's experience. Customers may also seek help outside of your

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Web site. Tailored advice is still very important and, oftentimes, this only comes from talking to
someone.

4. PROVIDE FEEDBACK

Customers will provide feedback. This may be voluntarily provided by e-customers

(unprompted) or solicited (prompted).

Customers sometimes want to provide feedback on an experience they've had with you, either on
your Web site, or in general. A Web site provides a medium where people can have a good moan
without having to talk to someone in person.

Customers will complain and unprompted feedback is usually negative, unfortunately and
fortunately. It's unfortunate because it can create a skewed view of how well you are doing and
fortunate because it provides an outlet that customers may not otherwise have. It also gives you a
chance to get things right where you may not have otherwise known something was wrong.

Customers are more passive when it comes to prompted feedback. However, customers will give
you information, provided they get something worthwhile in return. A customer who is very
involved with your company or your product may want to have some involvement with the
decisions your company makes. Those customers still need to see payback for time spent. This
payback does not equate to a bribe either. Seeing the difference the feedback makes may be
enough for a customer.

5. STAY TUNED IN AS E-CUSTOMERS

The level of day-to-day involvement e-customers have with businesses as e-service providers
will determine how much they want to "tune in" to their Web site. For example, a bank's
customer is more likely to want to use a Web site for frequent transactions than a computer
supplier's customer who may only purchase once a year. Even if customers are not transacting
with you on a frequent basis, they will still use your Web site to: Access and maintain any
information they've given you or that you share as a result of your service relationship. Be sure

49
they've gotten the best deal you can provide. Access special deals or offers. Get the most out
of the product they've purchased. And, again, let's not forget that a Web site is only part of a
customer's service experience. Customers may have relationships with people within the service-
providing organization, and these are also an integral part of day-to-day support.

9.4 Seventeen Customer Directives- evolution of E- CRM

When we get in the way of what customers want to do on the Web, they get frustrated. What
they want to do will comprise getting around a site and making use of the content and
functionality it offers.

There are some complaints, or requests, in relation to a whole range of Web sites and industries.
Customers don't know all the marketing and business reasons behind the way a business has
done things, they just know what they want it to do, and they'll state it in simple terms they
understand.

However it does not imply that customers will be equally frustrated by all these blunders. They
will be most frustrated by what gets in the way of the things they want to do the most (and this
will change depending on where the customer is at). Also, customers will take the Web site on
balance. If they are provided with some very useful things, they may put up with some blunders
and learn how to get around them (but that's not an excuse for making the blunder).

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 Chapter 10 BENEFITS OF IMPLEMENTING CRM

Customer relationship management is meant to shore up less than adequate efforts in the past at
understanding who your most profitable customers are. This means creating a profile of desirable
customers, developing marketing and sales campaigns to reach those prospects, and maintaining
your best customers to increase the lifetime value of the relationship.

In short, CRM should provide the benefits of:

Selling to your best prospects, and

Retaining your best customers for
Improving the profitability of your institution.

CRM is costly. It generally requires new database management systems, integration with legacy
system, analysis and decision support systems, campaign management systems, new messaging
and routing systems, and sales tracking systems. When done right, CRM is an enterprise-wide
endeavor. It requires the melding of employee behaviors with information technologies, for the
benefit of the customer.

Warnings and Pitfalls

In todays CRM environment, there is a danger we see with multiple vendors offering systems
built on relational database technology and touting theirs as the one customer relationship
management tool you need. Because most new banking applications are being developed with a
database that aggregates customer data, a data mart, these vendors are jumping on the CRM
bandwagon. The problem will come when you have implemented multiple CRM data marts to
handle various applications, and then find you cannot reconcile the data in each database. It will
be better to implement a single CRM system first and then hang multiple applications off the
core database.

You should think of CRM technologies as basically handling two major operations: Back office
customer data aggregation and analysis Front office end-user data presentation and
manipulation

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All CRM solutions are built on a relational database, often called middleware because it suits
between the legacy systems that handle the transaction processing and the front end systems that
deliver the data across end points. Between the back office and the front office are many
technologies that facilitate analysis and presentation. The end-user may be a banker or the
customer. End-user touch points may be in the bank, at the credit officers workstation, in the
call center, at the teller line or on the platform, or on remote, at an ATM machine, a kiosk, on the
telephone, via internet, or soon, through wireless devices.

The question is where should you begin your CRM implementation? In the rush to provide new,
or enhance old delivery channels-from call centers, to ATMs, to the Internet-with consistent
customer relationship record at each touch point, you run the internet banking solutions, and total
delivery channel solutions, is the inherent customer relationship management technology on
which they are based.

PRINCIPLES OF SERVICE IN BANKING

1. By satisfying the clients business objectives a bank can satisfy their own professional
and personal objectives.
2. Every bank wants their client to regard the organization as their partner of choice time
after time.
3. Satisfied customers/clients become engaged clients when they trust the bank the are
linked with and feel a sense of pride through an association with it.
4. Engaged clients form a significant source of continued and improved growth.
5. An engaged client will actively sell the banks product and services to others.
6. Engaged client forms a sound commercial foundation for the existing bank.
7. Dont keep good news to yourself-inform the client of every success.
8. Give every customer a reason to trust the bank.
9. Do what you said; you could do it, when you said you would do it.
10. Take personal ownership& responsibility for keeping the client informed of progress in
any matter they have raised.

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 FINDINGS & CONCLUSION

The main objective of the report has been to assess the current state of the CRM development
within Indian credit institutions and to evaluate its organizational impacts.

The study has identified issues that need to be assessed if CRM is to be used more productively
to take advantage of new opportunities.

STEPS THAT BANKERS CAN FOLLOW TO BULID UP LONG TERM RELATIONSHIP

WITH THEIR CUSTOMERS:

WELCOME CALL
PROFILE SHEET
BANK CUSTOMER INTERACTION DETAIL FILE
APPOINTMENT DIARY
IMPORTANT DATES TRACK ALARM

CRM should be viewed neither as a new competitive tool nor as a cluster of technologies, but
rather as a set of business processes that help manage client credit institutions relationships and
improve internal credit institutions workflow. CRM in fact, is a process that helps to maximize
medium to long term profits as a result of a better customer knowledge, customized treatment of
customers or a perception of it, and improved fulfilment of customer needs. These goals can be
better reached by adoption of enabling ICTs. Ideally, an effective CRM project needs to be very
well integrated in the credit institution organization.

Implementing a CRM process means gathering flows of information concerning actual and
potential customers. Information flows coming from delivery channels should ideally be
consolidated into a customer database in order to develop customer profiles that enable banks to
improve customer services CRM based on ICT can strengthen the marketing strategy of the
financial organization by making more effective the management of all the information
concerning customers.

The exploitation of CRM appears to have a positive impact on the quality and quantity of
information conveyed to customers. This is particularly relevant for the most sophisticated

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customers, i.e. those who are used to dealing with new technological tools and are not afraid of
interacting with the bank through the telematics channels. Nevertheless, distant interaction is not
as effective as personal interaction between customers and their bank. Therefore, according to
almost all of the bank representatives, e-business supports low value information needs, while
more sophisticated requests for information can be addressed only through personal interaction
between the bank and the customer that usually takes place at the branch.

Almost all the credit institutions have adopted the strategy of launching their e-business services
as an additional service rather than as an alternative to offline services. The impact of

e-business in banks is being limited by their strategic decision not to cannibalize their branches.
This research highlights how some of the credit institutions which had originally invested only in
the development of a virtual channel had to drastically re-define their customers or by opening a
call centre. The credit institutions representatives argued that their customers want a choice of
channels and they are adopting a multi-channel strategy. Most of the banks consider that since
Internet and telephone are most useful for managing operational and low value added tasks, the
traditional delivery structure still has a fundamental role and can be developed to specialize in
high added value tasks and consultancy services.

Most financial suppliers believe that customer support services are a core business in the
financial industry. Most of the financial organizations choose to internalize the customer support
contact center, whereas others choose to outsource front-office customer care tasks to contact
centre companies. But the final elaboration of data on customers and their exploitation for CRM
strategy is maintained in house and involves the bank management personnel.

The customer retention is the result of an increasing degree of product personalization and
differentiation. Credit institutions apparently prefer to compete on quality (product information,
broader range of product and services) rather than on price (meant as product acquisition cost to
the customer: price, mode of payment, delivery). Therefore product innovation (cross-selling,
product differentiation and personalization) seems to be the crucial issue of the CRM strategy.

Financial institutions have to realize the importance of the technology scalability as well as the
reengineering of the business processes.

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A medium to long term CRM strategy requires significant innovation in the organization of the
banks flow of information.

Ideally, CRM technologies and processes could make the slogan the right customer with the
right product at right place and in the right moment possible.

But many banks face the problem of having multiple database with customer information, so that
multiple entries refer to the same customer if he/she holds more than one product with the
company. This makes it difficult for sales people or relationship managers to have a full view of
their customers. A number of CRM deployments have failed because of inconsistent customer
data. This problem results in companies sending, for example, the same offer twice to the same
customer.

Hence CRM is a vital tool for financial institution to prosper.

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