Introduction: associated with a particular business but it

Introduction:

Customers are the major focus in the expansion of profitable
marketing approach. In banking sector there is a rare relationship among the
bank and the customer as the customer invests its money or the banks give loans
to the customers. They both need to be totally liable upon each other. There
are many banks that are not following the CRM yet due to financial burden and
risk of failure, but if the strategy is adapted there will be benefits only to
the banks. This report gives the valid reasons and details why CRM is very
beneficial in the banking industry.CRM (Customer Relationship Management) came
into existence from the early 1990’s, when the theory of business changed from
transitional to relational. It is an adaptable access for maintaining,
developing and managing good professional relations with the customers.
According to Franics Buttle, he was the first educator of CRM and defines it as
a business plan that combines internal process and external network to develop
and remit profits to the customer.

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The main idea of Customer Relationship Management (CRM) is
to improve customer satisfaction as if the customers are satisfied they will
remain constant in the business and this can be achieved by a good customer
focus by proper information through mails, texts, networking sites and
interactive blogs. CRM can easily well manage the existing customers associated
with a particular business but it can also expand customer base by creating
awareness for expected customers to enroll in the business. It increases
business sales because the methods and ideas involved with it increases sales
and creates opportunities for the plans to accelerate. CRM creates organized
working areas for the sales management staffs and the staff can be very
familiar with the customer’s information and can be in touch through mails,
texts and resolve problems very easily. From the past few years the center of
attraction of global markets has switched from the sellers to the customers.
The customers are stronger looking at today’s markets.

 

Aim:  Analysis on the
importance of CRM in banks.

Objectives: 

·        
To understand the use of CRM

·        
To analyze the customer view

·        
To know about the types of CRM and their use

·        
To check the requirement of CRM in banks

Literature Review:

In today’s era the main focus of the banks, insurance
companies and different service providers is to maintain their customers and
realize how important they are for their business and CRM has made this easy as
this helps to achieve new customers and as well as the existing customers are
well satisfied with their service. Closer relations with the customers will
need stable regulation between marketing unit and the IT department for the
long term withholding of preferred clients. CRM is a plan to know the most
beneficial customers, so that more time and preference can be given to them to
strengthen the relations among customers through reprising and unrestricted
decision making. If CRM is well applied the benefits a business can gain are
that they can make customer service better, sales staff can makeup deals
faster, acquire new customers and satisfy the needs of the existing customers.
CRM can be effective if the institution has decided what type of details of the
customers is required, how will they maintain and use the information. The
level of competition banks are facing is tremendous, the strategies that each
banks use is different from the other, so now the customers have more options
to choose from compared to the past years. Banks have recognized that it is
their need to capitalize on the advance technologies to gain more customers,
fulfill their requirements and maintain security at a higher level. CRM is the
scenario which allows the banks to evaluate customer profiles, determine the
client needs and find out the possible profitability areas and organize
necessary actions to accomplish customer satisfaction, profitability and
competitive power.

According to Tech One Spot there are three types of CRM,
mostly used by banks the first one is the Operation CRM in this type CRM
software packages is used for tracking and constructing inbound and outbound
interactions with clients along with the management. Operational CRM supports
the frontline process in marketing, sales and customer service. The contact
history is recorded and stores the important information to assure regular
picture of client relationship associated with the bank can be easily achieved
by the staff on the basis of their requirement. The benefits bank can achieve
from the use of Operational CRM are that it boosts sales force automation,
customer service and support and enterprise marketing automation. The second d
type is Analytical CRM it is about determining customer data to address
marketing and customer service goals so that the correct message is delivered
to the right customer through the correct channel. Analytical CRM uses the data
analysis to excerpt observation for optimizing customer relationships. The
benefits of using Analytical CRM is for fraud disclosure, credit risk analysis,
segmentation and targeting and the development of customized policies to match
the preferences of the customers. The third type Collaborative CRM involves
system easing customers to act services by themselves through the communication
and interactive channels. This process brings the people and the data together
and also permits conveying of data and the information properly to the bank
staffs for the active decision making and improved customer service and
support. Collaborative CRM benefits bank by providing online services so that
the customer service cost is decreased; there is access to customer’s data
while interacting with the customers and effective customer communication
through a series of channels.

CRM is the worldwide known and successful business plan in
this competitive era. It is a method that allows banks to recognize and spot
the most useful customers. The analysis on CRM has found that it brings out
extraordinary outputs. Customers used to select banks on the basis of their
suitability like if it is near to their home, but now the technology is just a
touch away. The online payment or the cash withdrawals have been much easier,
now the customers don’t have to queue up to withdraw cash and deposit money.
The organized CRM strategies have led to the customers be more focused while
choosing up their banks and the banks caring up on the customers more rather
than anything else this strategy can also be called as “customer
centric” plan. Banking sector is forward than other sectors in identifying
the worth of CRM and enforcing decision support systems to hold up CRM.
Productive decision support system allows CRM to compile information about the
client from every touch and combine this information into single view and use
this information for customer profiling, retention efforts, segmentation and
cross-selling. The main aim of CRM in banks is to streamline marketing and
sales method, implement better customer service, determine new customers and
increase customer revenue and sell their new plans and policies more
adequately. The banks following the CRM needs to establish better improved
communication channels, collect and update customer information on timely
basis, provide the customer the access to their account details, keep the
customer update about the new plans and policies introduced, increment in
revenue, must have an improved skill to meet client necessity, keep an
reduction in the service charge provided and also needs to handle the
complaints on time so that the customer is well satisfied.

Arranging and collecting customer information is a difficult
and a full time job but when Banks invest in CRM it satisfies customer and the
company itself and banks are well known that their data is in safer hands. CRM
gives the benefit of improved information arrangement. When CRM is applied in
the system it gives improved information organizing as proper information of
customers will lead to providing positive experience. The number of
interactions, transactions, updates done within the organization needs to be
documented but organizing in papers and storing information just in drive is
not secure but the CRM helps to store vast data and will also result in less
time wasting if the information is to be retrieved. Providing information to
different departments under the same organization is very time consuming so if
the data is stored in the system that can be accessed by all the responsible
staffs is very convenient so this is what CRM can do. CRM is cloud based system
and can be accessed through mobile phones needed an internet connection so the
information can be accessible in mobiles, tablets not only limited to
computers. In case of complaint handling the customer needs not to wait long as
the CRM will be able to retrieve all the past details regarding deposit,
transfer, purchase or withdrawal and take soon actions regarding the problem
this is only due to the accessible databases of potential issues.

The banks face question of not only acquiring customer’s
information but also how to use that data to obtain best time for the most
adequate policies the customer can buy. If the customers can bring profit to
the banks it is the also the duty of the banks to provide their customers with
the best offers otherwise the customer can easily switch to other benefiting
banks. Service quality in banking signifies frequently predicting the market
strategies and policies and to satisfy the customers keeping in mind their
expectations. CRM is the key to construct better customer understanding.
Application of CRM creates a good relationship among the banks and the customer
by clear understanding, innovative developing services and keeping the track on
what policies or schemes will benefit not only the bank but also satisfy the
customer.

 

 

Conceptual Framework:

                                                       

                                                                                             

 

 

 

 

 

 

 

 

 

 

Source:  Ictatctjournals

Customer Acquisition:

This process brings new customers to the banks. In
bank-marketing greater number of acquisitions oriented routines and actions
followed to gain new customers. The basic plan acquisition based practices is
to handle customers with less time and cost utilization and customer
acquisition provides satisfactory requirements to the customers.

Customer Response:

Customer response is used to explain how issues and
complaints by the customers are handled by the banks. If the customers are not satisfies
with the ways of complaint handling this leads to customer dissatisfaction. The
banks should handle issues in proper ways and the customer should also follow
up new schemes and policies in accordance with the banks.

Customer Knowledge:

The aim of this process is to make their products, services
and processes clearer to their customers to build a strong relationship with
them. There might always not be sufficient data regarding the customers so the
necessary process should be setup to acquire knowledge of the customer
regarding their profile and their financial transactions.

Customer Information System:

An effective CRM system will help gain new customers, retain
the existing customers and help to reduce cost in marketing and customer
service. A better customer information system will provide complete and
necessary information of the customers at the time of bank requirement.

Customer Value Evaluation:

This is an essential part in the banking sector as the
evaluation is done on a time basis regarding the information provided by the
customer to the bank is updated or not. Is the customer following the regular
texts, mails and phone calls? The customer evaluation process leads to build
stronger relation in case of information process.

Hypothesis:

Hypothesis 1: Strategic Factors

The strategy that the banks develop needs to be in
accordance with the customer satisfaction not giving the customers to switch
banks.

Hypothesis 2: Organizational Factors

The type of response from the customers is necessary for the
banks to keep their system updated with their profile.

Hypothesis 3: Vision

CRM gives a clearer vision about the process related to it
for both the banks and the customers.

Outcomes of the analysis:

If the banks and the customers both are well known about the
criteria’s they need to fulfill, it will be much easier task. The bank should
make possible changes in relevance to the customer’s needs. The CRM is an
effective tool to be used to make a good profit out of the business. The
benefits are not only limited to the banks by using CRM but also the customers
can make a great deal out of it.

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