Customer Relationship Management in Banks

V. G.
Vaze College CRM in Banking
Project on
Customer Relationship Management
A study on Union bank of India
And
Kapol co-operative bank
Submitted in the partial fulfilment of the requirements for the

award of Degree Bachelor of commerce Banking and Insurance
(SEM V) 2010-11
Submitted by: Miss. Saily Pillewar

Roll no: B025
Under the guidance of

Prof. S.Krishnan
University of Mumbai
KELKAR EDUCATION TRUST
V.G.VAZE COLLEGE OF ARTS COMMERCE AND
SCIENCE, MITHAGAR ROAD
MULUND - EAST
Mumbai- 81
1
V. G. Vaze College CRM in Banking
DECLARATION
I Miss Saily Pillewar student of KET’s V.G.VAZE COLLEGE OF

Art’s COMMERCE AND SCIENCE studying in TY Banking and
Insurance SEM V (2010 – 11) hereby declare that I have completed
the project on “CUSTOMER RELATIONSHIP MANAGEMENT” A
study on Union bank of India and Kapol co-operative bank under the
guidance of professor S.Krishnan.
The information collected is original and true to the best of my

knowledge.
Date : Signature of student
Saily Pillewar
Roll No-B025
2
ACKNOWLEDGEMENT
The satiation and euphoric that accompany the successful completion of task,
would be incomplete without the mention of the people who made it possible.
After all, the success is the epitome of hard work, severance, undeterred, zeal,
stead fast determination and most of all encouraging guidance. So with
immense gratitude, I acknowledge Dr.B.B Sharma principal of KET’s
V.G.VAZE College and. S. R. Ghantwal- co-coordinator of the college. I
would like to express my profound sense of gratitude to Prof. S Krishnan my
project guide for giving me valuable suggestions and advice through out the
execution of the project.
With a deep sense of gratitude and indebtedness, I sincerely and whole

heartedly thank Manager of Union bank of India Mr. S. S. Wankhede and
Manager of Kapol co-operative Bank Mr. sanjay Inamdar for providing
relevant data on the subject. I sincerely thank Miss Vanita Waghmare credit
Manager of Union Bank of India who extended flawless assistance to me with
matter pertaining to the project whenever I approached her.
Last but not the least, I would like to thank almighty God, my parents, and my
friends who helped me gather these data and have sat with me for hours
discussing about the project.
3
Index
Chapte
r Topic Page
No
no
Customer relationship
management introduction
1.1 what is CRM

1.2 Meaning and defining CRM
1-20
1 1.3 Emergence of CRM
1.4 CRM in Indian bank
1.5 Need of CRM in bank
1.6 Objective of CRM in banks
1.7 Benefits of CRM
CRM process framework
2.1 CRM formation process

2 2.2 A framework for
21-38
successful CRM
2.3 Relationship management
and governance process
4
2.4 Relational performance
and evaluation process
2.5 Key principals of CRM
2.6 Customer retention
2.7 Building CRM
E- CRM
3 39-44
3.1 E-CRM in banks
3.2 Key features of e-CRM
3.3 Benefits of e-CRM to BANKS
and CUSTOMERS
Case study
4 Union bank of India 45-54

Kapol co-operative bank
5 Suggestions, Findings and 55-57

conclusion
Annexure
DESING OF THE STUDY
5
Objectives
• To study customer relationship management of Union bank of India and

Kapol co-operative bank.
• To find general working of bank and how staff members response to
customer.
Limitations
• The project is only limited to the study of CRM of two banks.

• CRM of other banks are not disclosed.
• CRM strategies of banks are not compared with each other.
• Time, length, and depth of the study are limited as per the requirements of
Mumbai University.
Scope
• The project begins with a brief mention of what CRM is and its need and
importance in banks. It further goes on to show the CRM strategy of Union
bank of India and Kapol co-operative bank.
6
Methodology of study
Data for the project is obtained in two ways primary source and secondary
source.
• Primary source-
The researcher collected primary data by preparing questionnaire and

interviewed manager, staff and customer of Union bank of India and Kapol co-
operative bank Mulund West branch.
• Secondary source-
Secondary data for the project has been gathered from various CRM books and
internet.
Period
The period of study was from 3 August to 5 September 2010.
7
EXECUTIVE SUMMARY
Customer relationship management is a broad approach for creating,

maintaining and expanding customer relationships. CRM is the business
strategy that aims to understand, anticipate, manage and personalize the needs
of an organization’s current and potential customers. At the heart of a perfect
strategy is the creation of mutual value for all parties involved in the business
process. It is about creating a sustainable competitive advantage by being the
best at understanding, communicating, and delivering and developing existing
customer relationships in addition to creating and keeping new customers. So
the concept of product life cycle is giving way to the concept of customer life
cycle focusing on the development of products and services that anticipate the
future need of the existing customers and creating additional services that
extend existing customer relationships beyond transaction
The intense competition which banks have come to face, both as a consequence
of growth of non-banking financial institutions as well as securitization has
created the fear of high risk and has increased the attention towards Customer
Relationship Management.
Customer relationship management (CRM) is a multifaceted process, mediated
by a set of information technologies that focuses on creating two-way
exchanges with customers so that firms have an intimate knowledge of their
needs, wants, and buying patterns. In this way, CRM is intended to help
companies understand, as well as anticipate, the needs of current and potential
customers.
The project is a detail study of Process Involved in Planning of Customer

Relationship Management and Need for Customer Relationship Management.
8
Chapter 1

Introduction
9
1.1
WHAT IS CUSTOMER RELATONSHIP MANAGEMENT?
CRM, or Customer Relationship Management, is a company-wide business

strategy designed to reduce costs and increase profitability by solidifying
customer loyalty. True CRM brings together information from all data sources
within an organization (and where appropriate, from outside the organization) to
give one, holistic view of each customer in real time. This allows customer
facing employees in such areas as sales, customer support, and marketing to
make quick yet informed decisions on everything from cross-selling and up-
selling opportunities to target marketing strategies to competitive positioning
tactics.
Once thought of as a type of software, CRM has evolved into a customer-centric

philosophy that must permeate an entire organization. There are three key
elements to a successful CRM initiative: people, process, and technology. The
people throughout a company-from the CEO to each and every customer service
rep-need to buy in to and support CRM. A company's business processes must
be reengineered to bolster its CRM initiative, often from the view of, how can
this process better serve the customer? Firms must select the right technology to
drive these improved processes, provide the best data to the employees, and be
easy enough to operate that users won't balk. If one of these three foundations is
not sound, the entire CRM structure will crumble.
It's a strategy used to learn more about customers' needs and behaviors in order
to develop stronger relationships with them. After all, good customer
relationships are at the heart of business success. There are many technological
10
A component to CRM, but thinking about CRM in primarily technological terms

is a mistake. The more useful way to think about CRM is as a process that will
help bring together lots of pieces of information about customers, sales,
marketing effectiveness, responsiveness and market trends. If customer
relationships are the heart of business success, then CRM is the valve the pumps
a company's life blood. As such, CRM is best suited to help businesses use
people, processes, and technology to gain insight into the behaviour and value of
customers.
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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.
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.
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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 Balance
sophisticated functionality with rapid implementation and effective support for a
faster return on your CRM investment. Today’s 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 consumer’s perception of the product or
service, to establish a relation between the company and its clients.
13
1.3
THE EMERGENCE OF CRM :
The developing customer relationship management has historical antecedents

going back into the pre-industrial era. In the recent years however several
factors have contributed to the rapid development and evolution of CRM. These
include the growing de-intermediation process in many industries due to the
advent of sophisticated computer and telecommunication technologies that allow
producers to directly interact with the end customers.
The recent success of On-line banking, Charles Schwab and Merryll Lynch’s
On-line investment programs, direct selling of books, automobiles, insurance
etc. on the internet all atleast to the growing consumer interest in maintaining
direct relationship with marketers. The de-intermediation process and
consequent prevalence of Customer Relationship Management is also due to the
growth of the service economy.
Another force driving the adoption of customer relationship management has

been the total quality movement. When companies embraced Total Quality
Movement philosophy to improve quality and reduce cost, it become necessary
to involve suppliers and customers in implementing the program at all levels of
the value chain. This needed close working relationships with customers,
suppliers and other members of the marketing infrastructure. Other programs
such as Just in Time and Material resource planning also made the use of
interdependent relationships between suppliers and customers.
Similarly in the current era of hype-competition, marketers are forced to be more

concerned with customer retention loyalty. As several studies indicated,
14
retaining customer is less expensive and perhaps a more sustainable competitive

advantage than acquiring new ones. Marketers are realizing that it costs less to
retain customers than to compete for new ones. Today many large
internationally oriented companies are trying to become global by integrating
their worldwide operation. To achieve this they are seeking cooperative and
collaborative solutions for global operations from their vendors instead of
merely engaging in transactional activities with them. Such customers need
make it imperative for marketers interested in the business of companies who are
global to adopt Customer relationship management programs, particularly global
account management programs. Global account management is conceptually
similar to national account management programs except that they have to be
global in scope and this they are more complex. Managing customer relationship
around the world calls for external and internal partnering activities, including
partnering across firms worldwide organizations.
15
1.4
Customer
Relationship
Management in
Indian bank :
Indian banks had

presumed that their
operations were customer-centric, simply because they had customers. These
banks ruled the roost, protected by regulations that did not allow free entry into
the sector. And to their credit, when the banking sector was opened up, they
survived by adapting quickly for long to the new rules of the game.
Many managed to post profits. For them an unexpected bonanza came from
government bonds in which most were hugely invested.
Ironically, the Reserve Bank of India's moves to cut aggressively the interest
rates after 1999, pushed up the prices of bonds. So banks had a windfall doing
almost nothing. The bond profits, like manna from heaven, improved the
balance-sheets of all banks irrespective of their core performance.
16
However, the era of lazy banking is soon to end. The mesh of rules that propped
up the Indian banking industry is now being dismantled rapidly.
According to a RBI road-map, India will have a competitive banking market

after 2009. As one of the most attractive emerging market destinations, India
will see foreign banks come in, what with more freedom to come in, grow and
acquire.
Therefore, it is imperative that Indian banks wake up to this reality and re-focus
on their core asset — the customer. A greater focus on Customer Relationship
Management (CRM) is the only way the banking industry can protect its market
share and boost growth.
CRM would also make Indian bankers realize that the purpose of their business
is to "create and keep a customer" and to "view the entire business process as
consisting of a tightly integrated effort to discover, create, and satisfy customer
needs."
What is CRM, and what will it deliver to the banks? CRM is, probably, one of
the least clearly defined business acronyms, as there is no single definition for it.
It is probably easier to say what CRM is not. Unfortunately, CRM has also
become a misnomer for a range of solutions from IT vendors, each providing its
own spin on the idea.
CRM is variously misunderstood as a fancy sales strategy, an expensive

software product, or even a new method of data collection. It is none of these.
17
CRM is a simple philosophy that places the customer at the heart of a business
organization’s processes, activities and culture to improve his satisfaction of
service and, in turn, maximize the profits for the organization.
A successful CRM strategy aims at understanding the needs of the customer and
integrating them with the organization’s strategy, people, and technology and
business process
Therefore, one of the best ways of launching a CRM initiative is to start with
what the organization is doing now and working out what should be done to
improve its interface with its customers. Then and only then, should it link to an
IT solution.
While this may sound quite straightforward, for large organizations it can be a
mammoth task unless a gradual step-by-step process is adopted.
It does not happen simply by buying the software and installing it. For CRM to
be truly effective, it requires a well-thought-out initiative involving strategy,
people, technology, and processes. Above all, it requires the realization that the
CRM philosophy of doing business should be adopted incrementally with an
iterative approach to learn at every stage of development.
Only time will tell how Indian banks embrace the CRM philosophy and take on
the competition from foreign entities.
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1.5
Need 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
centre, field organization and other distribution channels.
CRM can help banks in following ways:
1 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 analyzing 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
19
campaigns to reach these customers and maximize the lifetime value of those
relationships.
2 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.
3 Marketing Encyclopedia - Central repository for products, pricing and

competitive information, as well as internal training material, sales
presentations, proposal templates and marketing collateral.
4 360-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.
5 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.
6 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.
20
7 Activity Management – It helps managers to assign and track the

activities of various members. Thus improved transparency leads to improved
efficiency.
8 Contact Centre – It enables customer service agent to provide uniform

service across multiple channels such as phone, Internet, email, Fax.
9 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
centre and connects the operations centre with the relevant internal and external
business partners.
10 Enhanced productivity – CRM can help in enhanced productivity of

customers, partners and employees.
11 CRM with Business Intelligence - Banks need to analyze the performance

of customer relationships, uncover trends in customer behaviour, 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 behaviour key figure and frequency to monetary
acquisition analysis with a marketing revenue quota can optimize acquisition
costs and cut the number of inefficient activities.
21
With such knowledge, banks can 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.
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1.6
Objective of Customer Relationship Management in Banks
Objective of
customer
relationship
management
Sales Marketing
Customer
Support
service
The push towards better CRM technologies is natural result of the search by
business of greater productivity and efficiency in customer facing operations like
sales, marketing, customer service and support. E.g. in sales, companies need IT
system that provides greater control and efficiency. This means improved
forecasting and to capability, greater visibility into sales performance across a
variety of channels increased productivity by external sales forces and reduced
sales costs, meanwhile, companies must meet customer demands for better
quality timeless and customization in the service they deliver.
23
Companies also need technologies that help them approach customers in a

rational way. E.g. remember a customer address from one transaction to another
and carefully choreograph contact between its, sales force and customers. In
addition to being wasteful and inefficient
pitching a new product to a customer who has just bought the same item makes
the company look incompetent to the customer.
The internet dramatically accelerate the focus on CRM by making customer

interactions more cost-efficiency. In addition, the web has established a more
direct sales channel that supports rapid customer’s interaction and short sales
cycles. Using internet technologies, customer can interact with information
from a wide variety of sources without special training.
The idea of CRM is that it helps businesses use technology and human resources
gain insight into the behaviour of customers and the value of those customers. If
it works as hoped, a business can: provide better customer service, make call
centres more efficient, cross sell products more effectively, help sales staff close
deals faster, simplify marketing and sales processes, discover new customers,
and increase
Customer revenues. It doesn't happen by simply buying software and installing

it. For CRM to be truly effective an organization must first decide what kind of
customer information it is looking for and it must decide what it intends to do
with that information. For example, many financial institutions keep track of
customers' life Stages in order to market appropriate banking products like
mortgages or IRAs to them at the right time to fit their needs. Next, the
organization must look into all of the different ways information about
24
customers comes into a business, where and how this data is stored and how it is
currently used.
25
1.7
Benefits of a Customer Relationship Management
A properly implemented CRM system can bring significant benefits to

organizations. But when I talk about a system, I mean the 3 P's, the complete
consortium of people (employees, culture), procedures (way of doing business)
and programs (supporting applications), not just an application running on a
computer.
CRM is more than just the next wave of computer-aided marketing; it's a way of
doing business. Let’s take a look at the advantages that a CRM or Customer
Relationship Management system can bring.
1. Shared or distributed data

As companies realize that customer relationships are happening on many levels
(not just through customer service or a web presence), they start to understand
the need for sharing all available data throughout the organization. A CRM
system is an enabler for making informed decisions and follow-up, on all the
different levels.
2. Cost reduction
A strong point in Customer Relationship Management is that it is making the
customer a partner in your business, not just a subject. As customers are doing
their own order entry, and are empowered to find the info they need to come to a
buy decision, less order entry and customer support staff is needed.
26
3. Better Customer Service

All data concerning interactions with customers is centralized. The customer
service department can greatly benefit from this, because they have all the
information they need at their fingertips. No need to guess, no need to ask the
customer for the n-th time. And through the use of push-technology, customer
service reps can lead the customer towards the information they need. And, most
of the time, the customer can do this on their own, as the CRM system
(remember, the 3 P's) is more and more able to anticipate the need of the
customer. The customer experience is greatly enhanced.
4. Increased Customer Satisfaction

The customer feels that he is more "part of the team" instead of just a subject for
sales and marketing (the proverbial number), customer service is better, his
needs are anticipated. There is no doubt that customer satisfaction will go up. If
the products sold exceed the customers expectation, of course, no CRM system
can help you with shoddy products. In my opinion, the term satisfaction is a
contaminated. Many companies think that if customers are satisfied that this is a
good predictor for repeat business. However, this is not the case. Only
delighted customers have a great level of loyalty.
5. Better Customer Retention

If a CRM system can help to enchant customers, this will increase customer
loyalty, and they will keep coming back to buy again and again, hence customer
retention.
27
6. More repeat business

The repeat business is coming from the delighted customers, who are turned
from doubting clients into loyal advocates.
7. More new business

If you are delivering the ultimate customer experience, this will seed the word-
of-mouth buzz, which will spawn more new business.
8. More Profit!
More business at lower cost equals more profit.
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Chapter 2

Process Framework
29
2.1
Customer Relationship Management formation process
Correlate
Formation
Connect process Combine
Cognize
30
The appropriate approach for the CRM process involve :
1. Correlate
A series of transaction that make up a dialogue between customer, customer, end

user and an organization. This is the data that is collected from all contact points
and communication. With outside points of contact.
2. Combine
The mapping and management of interactions points between a customer,

channel, end user and an organization.
3. Cognize
The insight gained through capture and analysis of detailed information is to

create continuous learning from the data warehouse and knowledge base that is
created, interrogated and analysed.
4. Connect
The application of insight to create relevant interaction or communication with

the consumers, customers, channels suppliers and partners that build value
relationships.
31
2.2
A framework for successful CRM
Customer Relationship Management involves much more than installing any one
application, embracing a new technology, or even committing to one vendor’s
CRM suite. It provides better insight into customer behaviour and enables new
ways of doing business. Good implementations give employees a complete view
of the organization’s relationship with its customers and open up internal system
to customers so they can have access to sales and services themselves.
CRM requires a cultural change that aligns a company, its employees and its
system towards customers and away from traditional product or process centric
models. Companies that are unresponsive to the shift will soon find themselves
scrambling for scraps left behind by those that are.
Adopt a suitable framework
A simple framework will help you to understand the full scope of a CRM
solution and also help to focus on areas that need your attention. A useful
framework will encompass the following elements.
• Customer strategy
This will ensure that you are focused on achieving specific customer goals, and
will provide direction to the selection and deployment of CRM applications.
32
• Customer insight
This encapsulates customer data acquisition and storage capabilities, insight

generation capabilities and insight generation capabilities and insight
exploitation capabilities and is used both to support customer strategy
development and to drive intelligent customer interaction in marketing, selling
and service activities.
33
2.3
Relationship management and governance process
Once CRM program is developed and rolled out, the program as well as the
individual relationship must be managed and governed. For mass market
customers, the degree to which there is symmetry or asymmetry in the primary
responsibility of whether the customer or the program sponsoring company will
be managing the relationship varies with the size of market. However, for
program directed at distributor and business customers the management of the
relationship would require the involvement of both parties. The degree to which
these governance responsibilities are shared or managed independently will
depend on the perception of norms of governance processes among relational
partners given the nature of their CRM program and the purpose of engaging in
the relationship.
Whether management and governance responsibilities are independently or

jointly undertaken by relational partners, several issues must be addressed.
These include decisions regarding role specification, communication, common
bonds, planning process, process alignment, employee motivation and
monitoring procedures.
Communication with customer partners is a necessary process of relationship

marketing. It helps in relationship development, fosters trust, and provides the
information and knowledge needed to undertake cooperative and collaborative
34
activities of relationship marketing. In many ways it is the lifeblood of
relationship marketing. By establishing proper communication channels for
sharing information with a company can enhance their relationship with them. In
addition to communicating with customers, it is also essential to establish intra-
company communication practically among all concerned individuals and
corporate functions that directly pay a role in managing the relationship with
specific customer or customer group.
35
2.4
Relational performance and Evaluation process
Relational parties
Customer partner selection is another important decision in the relationship

formation stage. Even though a company may serve all customer types, few have
the necessary resources and commitment to establish CRM programs for all.
Therefore I the initial phase, a company has to decide which customer type and
specific customers or customer groups will be the focus of their CRM efforts.
Subsequently when the company gains experience and achieve successful
results, the scope of CRM activities could be expanded to include other
customers into the program or engage in additional programs
Although partner selection is an important decision in achieving CRM goals, not

all companies have a formalized process of selecting customers. Some follow
intuitive judgmental approach of senior managers in selecting customer’s
partners and other partners with those customers who demand so. Yet other
companies have formalized processes of selecting relational partners through
extensive research and evaluation along chosen criteria. The criteria for partner
selection vary according to company goals and policies. These range from a
single criterion such as revenue potential of the customer to multiple criteria
including several variables such as customer commitment, resourcefulness, and
management values.
36
Evaluation process
Periodic assessment if results in CRM to evaluate if programs are meeting

expectations and if they are sustainable in the long run. Performance evaluation
also helps in making corrective action in terms of relationship governance or in
modifying relationship marketing objectives and program features. Without a
proper performance metrics to evaluate CRM efforts, it would be hard to make
objective decisions regarding continuation, modification or termination of CRM
programs. Developing a performance metrics is always a challenging activity as
most firms are inclined to use existing marketing measures to evaluate CRM.
however many existing marketing measures, such as market share and total
volume of sales may not be appropriate in the context of CRM. Even when a
more CRM oriented measures are selected it cannot be applied uniformly across
all CRM programs particularly when the purpose of each program is different
from one another.
Another global measure used by firms to monitor CRM performance is the

measurement of relationship satisfaction. Similar to the measurement of
customer satisfaction measurement would help in knowing to what extent
relational partners are satisfied with their current cooperative and collaborative
relationships. Unlike customer satisfaction measures that are applied to measure
satisfaction on one side of the dyad, relationship satisfaction measures could be
applied on both sides of the dyad. Both the customer and the marketing firm
have to perform in order to produce the results in a cooperative relationship and
hence each party’s relationship satisfaction could be measured.
37
2.5
Key principals of customer relationship management
Differentiate Customers:
All customers are not equal; recognize and reward best customers
disproportionately. Understanding each customer becomes particularly
important. And the same customers’ reaction to a cellular company operator may
be quite different as compared to a car dealer. Besides for the same product or
the service not all customers can be treated alike and CRM needs to differentiate
between a high value customer and a low value customer.
What CRM needs to understand while differentiating customers is?
- Sensitivities, Tastes, Preferences and
Personalities
- Lifestyle and age
- Culture Background and education
- Physical and psychological characteristics
• Differentiating Offerings
→ Low value customer requiring high value customer offerings
→ Low value customer with potential to become high value in near future
→ High value customer requiring high value service
→ High value customer requiring low value service
• Keeping Existing Customers

Grading customers from very satisfied to very disappoint should help the
organization in improving its customer satisfaction levels and scores.
38
As the satisfaction level for each customer improves so shall the customer
retention with the organization.
• Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life
event trigger points by customer, marketers can maximize share of purchase
potential. Thus the single adults shall require a new car stereo and as he grows
into a married couple his needs grow into appliances.
• Increase Loyalty
Loyal customers are more profitable. Any company will like its mind share
status to improve from being a suspect to being an advocate. Company has to
invest in terms of its product and service offerings to its customers. It has to
innovate and meet the very needs of its clients/ customers so that they remain as
advocates on the loyalty curve. Referral sales invariably are low cost high
margin sales.
• Business intelligence and analytical capabilities

CRM applications contain a vast amount of information pertaining to an
organization customers and prospects. This information needs to be leveraged an
analyzed by decision. This is possible only if CRM solutions have robust
business intelligence and analytical capabilities. This is a major requirement
primarily for marketing application.
39
2.6
Customer retention
Under the present context of competitive environment, the focus of the

organizations is more on customer retention than simply on customer
acquisition. Customer retention is the process of keeping customer in the
customer inventory for an unending period by meeting the needs and exceeding
the expectations of those customers. It is approach of converting a casual
customer not a committed loyal customer.
Why is customer retention preferred?
Some of the major benefits of customer retention are presented below. customer
come within the fold of an organization in the following ways:
• Customer by chance.
• Customer by occasion
• Customer by choice
• Customer by reception
• Customer by loyalty
In the customer retention approach the organization makes every effort to

convert a customer by chance into a customer by loyalty. A retained customer
who turns out to be loyal will shift his focus of relationship with the organization
from a mere transactional relationship to a relationship tied up with emotion and
commitment, which will benefit the organization a long way.
40
Customer retention would enable the organization to minimize expenses in terms

of acquisition of new customers. Customer retention cost for an organization is
expected to be far less than that of the acquisition concerned.
Customer retention enables a long tem relationship of mutual benefit, both to the
organization and to the customer concerned.
There appears to be close interaction between customer retention and customer

loyalty. Loyalty is usually measured in terms of longevity of the patronage of
customers. Loyalty that arises out of retention is a preferred state, as compared
to loyalty of reluctant customers.
Retained customers would help to spread a positive image of the organization by

word of mouth, which in turns helps to acquire new customers to the customer
inventory.
Approach to retention process
The approach of the organization at the retention process is expected to be

different from the approach adopted at the acquisition process. The difference is
indicated in the following lines.
At the acquisition the focus is on acquiring relationship whereas at the retention,

it is on nurturing the relationship.
At the acquisition the focus is on demographic, psychographic profile of the

customer, whereas the retention process the focus is more on past and present
transactional profiles in addition to demographic, psychographic profiles.
41
Stages of retention in the customer life cycle
Acquisition
Re-
Retention
acquisition
Stages of
retention in
customer life
cycle...
Defection Attrition
42
Acquisition is a stage in which customer are acquired for an organization

business. Customers so acquired would reach a state of either satisfaction or
dissatisfaction.
• Satisfaction leads to retention.

• Dissatisfaction leads to stage of attrition.
A satisfied customer who joins the retention stage might either proceed towards
loyalty stage or in the event of being dissatisfied will join the attrition stage.
The customer who joins the attrition stage will proceed to the stage if defection,
unless he is satisfied. T hose customers in the defection stage may be reacquired,
by means of appropriate marketing programmes designed and implemented for
the purpose Reacquisition.
43
2.7
Building customer relationship management
Organization strategies towards developing and maintaining sustainable

relationship differ from one organization to another depending on certain
factors. These include nature of business, its size, its market share, nature of
product type, volume of sales, geographic concentration, socio economic status
and life style of the customer concerned, competitors strength, and so on. The
strategies that are practiced by customer driven organization with national and
global perspective. The reader may concentrate on those strategies or
combination of several strategies that suit the business context.
Setting
satisfactory People
service standard
Organization Process
Product
44
People
People within the organization have the basic role in developing and maintaining
relationship with customer. Everyone in the organization must realize the fact
that their work is towards satisfying customers. Everyone from the lowest to the
highest level irrespective if their functional specialization and responsibilities
must integrate their activities towards one of the main objectives of the
organization customer satisfaction. The marketing departments can coordinate
integrated activity towards customer satisfaction.
Process
Process involves a logical sequence of activities right from the need

identification of potential customers to need fulfilment. Need fulfilment requires
manufacture of product with desired attributes. The process has to be derived
from the customer’s viewpoint which paves way for total customer satisfaction.
The performance of each link must be objectively analyzed and corrected in tune
with the internal and external customer’s expectation.
Product
The product offered must constantly provide value addition. The expectations of
the customers may always be on the increase due to various reasons. A customer
satisfied with a given product may soon become a dissatisfied customer in view
of the changes that takes place in his expectations. Customer’s expectations go
much beyond physical tangible things.
45
Organization
In order to build customer relationship, an organization should be aware of the

technology advancements and provide quality service in tune with the
customer’s expectations. It should
concentrate on total customer satisfaction and respond to the requirement of the

customers faster than its competitors. The responsive and learning nature of the
organization must build Confidence in the mind of the customers and that will
go a long way in building the customer relationship.
Setting satisfactory service standard
A customer not only expects quality products but also quality services. The
organization must ensure quality and availability of the product. The
understanding couple with the skills would help more significantly the process
of achieving the ultimate objective of Customer Interaction Management. At this
point, it is worthy to note that effective CIM goes much beyond the skills
developed, knowledge gained, technology enabled and infrastructure build up.
Ultimately it is love, trust and respect that an organization earns from customers
that is supported by organization help-desks, customer support, software,
integrated customer information system etc that would help to gain maximum
benefits out of Customer Interaction Management.
46
Chapter 3
E-CRM
47
3.1
E –CRM in banks
What is E-CRM?
As the internet is becoming more and more important in business life, many
companies consider it as an opportunity to reduce customer-service costs,
tighten customer relationships and most important, further personalize marketing
messages and enable mass customization Together with the creation of Sales
force automation (SFA), where electronic methods were used to gather data and
analyze customer information, the trend of the upcoming Internet can be seen as
the foundation of what we know as eCRM today.
We can define eCRM as activities to manage customer relationships by using

the Internet, web browsers or other electronic touch points.
The challenge hereby is to offer communication and information on the right

topic, in the right amount, and at the right time that fits the customer’s specific
needs.
Channels, through which companies can communicate with its customers, are
growing by the day, and as a result, getting their time and attention has turned
into a major challenge. One of the reasons eCRM is so popular nowadays is that
digital channels can create unique and positive experiences – not just
transactions – for customers. An extreme, but ever growing in popularity,
example of the creation of experiences in order to establish customer service is
the use of Virtual Worlds, such as second life. Through this so-called eCRM,
companies are able to create synergies between virtual and physical channels
and reaching a very wide consumer base. However, given the newness of the
48
technology, most companies are still struggling to identify effective entries in

Virtual Worlds. Its highly interactive character, which allows companies to
respond directly to any customer’s requests or problems, is another feature of
eCRM that helps companies establish and sustain long-term customer
relationships.
49
3.2
Key features of E-CRM
• Focused on process
A CRM process brings you the appropriate technology and it will reduce the
technology gap as well as refining your business process.
• Data warehouse driven

In a e-CRM solution, the data warehouse or customer data mart contains a
consolidated and comprehensive view of the customer. The warehouse provides
the broadest possible profile of the customer. This is needed to determine an
appropriate course of action, the most effective offer to make, and the best
channel to deliver your pertinent message.
50
• A multi channel view

Organizations today have different methods of interacting with customers.
E.g. A bank might use one application to support its website , another to support
sales and another to support ATM’s and yet another to support direct mail and
telemarketing.
An e-CRM solution must have applications that coordinate or synchronies
customer communication across channels and do so in real time. These
applications must be able to capture customer transaction across disparate touch
points and
Store that information in a temporary data store for immediate assessment and
response. In addition, this application must feed information captured from those
touch points into the data warehouse to broaden the customer profiles obtained
from back-end transactional systems and external sources.
• Measurement driven
Today many companies spend millions of dollars communicating with
customers, but spend little time and effort determining the effectiveness of those
campaigns CRM provides the means to measure communication efforts. E-CRM
is a continuous process.
51
3.3
BENEFITS OF E-CRM TO Bank’s AND Customer’s
BENEFITS TO BENEFITS TO
BANK CUSTOMER
Relationship with the Customer interaction and

customer satisfaction
Using e-mail for

business Convenience
communication
Personalized services Speed of processing the

or one to one services transaction through e-
response
Website to market
products and services Service quality
Transaction security Trust
52
Chapter 4.1
Union bank of India case study
53
4.1
Union bank of India
The Union Bank of India was built up in twentieth century and declared open by
the Father of the Nation, Mahatma Gandhi. The bank with its efficient value-
added services, sustained growth, consistent profitability and development of
new technologies bank has ensured complete customer delight, living up to its
image of, “GOOD PEOPLE TO BANK WITH”. Bank is offering credit cards,
home loan, union demat, Kisan ATM, International debit card, online tax
payment facility, Railway e-ticketing kiosk, etc., services to its customers
through core banking solution.
The Union Bank of India has 2261 branches out which 1031 branches are under
CBS. Presently 939 ATMs spread out across India both Onsite and Offsite. All
the ATMs are inter-connected through the Bank’s ATM Switch, thus facilitating
on-line operations in case of CBS customers. The Bank is a member of Cash
Tree consortium and also has bilateral arrangement with State Bank of India,
enabling the Bank’s ATM cardholder access to over 20000 ATMs across the
country. UBI Net connects 65 Offices and 984 branches located in 323 centres,
facilitating speedier transmission of MIS data (Network Map). The network also
facilitates the implementation of Core Banking Solution, apart from DEMAT
services, Cash Management services, fund transfers, messaging system, etc.The
Bank is using VSAT network for connecting branches and ATMs wherever
leased line connectivity is not feasible. We have 590 VSATs operational,
connecting 194 branches/extension counters and 316 ATMs.
54
4.2
Customer satisfaction survey
Responsiveness of employee in dealing with customer?
70
60
50
40 12
30 26
62
20
10
0
average good best
Quality service provided by bank?
60
50
40
24
30
24
20 52
10
0
average good best
55
Customer care service of the bank?
50
45
40
35
30
10
25
40
20
50
15
10
5
0
average good best
56
4.3
Steps followed by the bank for customer retention

• Quality service is provided for building good relationship with customer.
• The following services are provided by bank for customer retention
o SMS banking
o Internet banking
o ATM facility
o Telebanking
o Debit cards
o Credit card
o Lockers etc..
• Bank doesn’t focus on certain group of customer, it caters all groups.
• The call centres of bank are also available.
• All customers are given equal services.
• Bank track individual problem of customer.
• According to bank customers are satisfied with the bank, and it can
be seen by number of accounts opened regularly and increase in business of
bank in all departments.
• It is very important for the bank to have good customer relationship
management debt of the bank.
• Customer satisfaction ultimately results in increase in profit of the bank.
57
• To help customer at our best.

• To keep a track of every complaint and problems of customer to solve it
and see to it that it doesn’t get repeated.
• Customer retention is important.
• Increase in number of customer
• Various services are provided (e.g. Debit card, credit card, internet
banking etc..)
58
Chapter 4.4
Kopal bank case study
59
4.4
Kapol bank
The Kapol Bank was established on 14th October, 1939 by its founder late
Rajratna Shri. Khushaldas Kurji Parekh. The Bank was first to
introduce"Counterless Banking “and "Branch-on-Button" in the Indian Banking
Industry, which have been lauded by its clients as most convenient banking
services. The Bank is also extending Depository Services to the investors.
60
4.5
Customer satisfaction survey
Responsiveness of employee in dealing with customer?
12
10
8
40
6
33.33
4 26.66
0
average good best
Quality service provided by bank?
50
45
40
35
30
33.33
25
50
20
16.66
15
10
5
0
average good best
61
How good are customer queries solved?
45
40
35
30
25 43.33
20 20
15 36.66
10
5
0
average good best
Steps followed by the bank for customer retention

• Aware customer about services and new technology.
• Quality and efficient services should be provided to the customer.
• Customer retention is very important in this competitive world.
• Expansion of business should be done.
• Various services should be provided by the bank for customer retention,
and increase in customer.
62
Chapter 5
Suggestion findings and conclusion
Suggestions
• Bank should increase staff.
• Bank transaction should be fully computerised.
63
• Customer care service of the bank should be improved for
convenience of the customers.
• Customer care service of the bank should be fast and responsive.
• ATM’s should be increase.
Findings
• CRM is not a technology initiative; many have confused as a technology

initiative, and assigned the CRM implementation project to their information
system or IT group.
• Technology is needed in order to implement CRM particularly the

customization part but technology is not the driver of CRM or the solution to
successful CRM implementation.
• CRM is not exclusively a sales initiative similar to marketing; CRM is

often lodged with the sales department. The sales force after all it’s extremely
close to their customers, understanding their needs and wants, and trying to fulfil
them.
• Sales however is just one functional area that can benefit from customer
relationship management and that is necessary for effective customer
relationship management.
CONCLUSION:
64
Providing excellent customer service is no easy task. This aspect of business is a

major force that can make or break profits. However, customer service is rarely
mentioned in an organization's mission statement nor is it the top of the
discussion list for staff meetings or training sessions. Providing the type of
customer service that is expected by customers take a lot of thought and
flexibility on the part of management as well as staff members. The challenges
faced by banks and their customers are many but the trick lies in de-mystifying
complex financial relationships. Technical solutions deployed by banks today
are flexible, user friendly and meant to facilitate specific workflow and
requirements in implementation processes. In order to simplify lives, banks have
begun to implement end-to-end technology through all departments with the
intention of removing human error from processes previously existing manual
environments could not have been adequate for future visions, growth plans and
strategies. In this day and age, customers enjoy complete luxury in terms of
customized technical solutions and banks us the same for long term, mutually
beneficial relationships.
ANNEXURE
65
Ket’s
Name:
ADD:
10.
1. How wou
How would you totally rate the bank?
66
o Average
o Good
o Best
Employee questionnaire
67
Ket’s
Name:
ADD:
68
Ket’s
Name:
ADD:
69
BIBLIOGRAPHY
Book Author
Customer relationship Mohammed, H.Peeru

management
Customer Sheth, jagdish. N
relationship and others ed.
management
strategies
WEBLIOGRAPHY
www.wikipedia.com
www.ebooks.com
www.google.com
70

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V. G.

Vaze College CRM in Banking

Submitted in the partial fulfilment of the requirements for the

Submitted by: Miss. Saily Pillewar

Under the guidance of

I Miss Saily Pillewar student of KET’s V.G.VAZE COLLEGE OF

The information collected is original and true to the best of my

Date : Signature of student

With a deep sense of gratitude and indebtedness, I sincerely and whole

1.1 what is CRM

CRM process framework

2.1 CRM formation process

4 Union bank of India 45-54

5 Suggestions, Findings and 55-57

DESING OF THE STUDY

• To study customer relationship management of Union bank of India and

• The project is only limited to the study of CRM of two banks.

The researcher collected primary data by preparing questionnaire and

The period of study was from 3 August to 5 September 2010.

Customer relationship management is a broad approach for creating,

The project is a detail study of Process Involved in Planning of Customer

Customer Relationship Management

WHAT IS CUSTOMER RELATONSHIP MANAGEMENT?

CRM, or Customer Relationship Management, is a company-wide business

Once thought of as a type of software, CRM has evolved into a customer-centric

A component to CRM, but thinking about CRM in primarily technological terms

Customer Relationship Marketing is a practice that encompasses all marketing

Customer relationship management (CRM) is a business strategy that spans your

THE EMERGENCE OF CRM :

The developing customer relationship management has historical antecedents

Another force driving the adoption of customer relationship management has

Similarly in the current era of hype-competition, marketers are forced to be more

retaining customer is less expensive and perhaps a more sustainable competitive

Indian banks had

According to a RBI road-map, India will have a competitive banking market

CRM is variously misunderstood as a fancy sales strategy, an expensive

Need of CRM in banks

CRM primarily caters to all interactions with the customers or potential

CRM can help banks in following ways:

1 Campaign Management – Banks need to identify customers, tailor

2 Customer Information Consolidation - Instead of customer information

3 Marketing Encyclopedia - Central repository for products, pricing and

6 Lead and Opportunity Management - These enable organizations to

7 Activity Management – It helps managers to assign and track the

8 Contact Centre – It enables customer service agent to provide uniform

9 Operational Inefficiency Removal – CRM can help in Strategy

10 Enhanced productivity – CRM can help in enhanced productivity of

11 CRM with Business Intelligence - Banks need to analyze the performance

Objective of Customer Relationship Management in Banks

Companies also need technologies that help them approach customers in a

The internet dramatically accelerate the focus on CRM by making customer

Customer revenues. It doesn't happen by simply buying software and installing

Benefits of a Customer Relationship Management

A properly implemented CRM system can bring significant benefits to

1. Shared or distributed data

3. Better Customer Service

4. Increased Customer Satisfaction

5. Better Customer Retention

6. More repeat business

7. More new business

Customer Relationship Management

Customer Relationship Management formation process

The appropriate approach for the CRM process involve :