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What is Customer Relationship management?

Customer relationship management is creating a team relationship among sales, marketing, and
customer support activities within an organization.
Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which
a variety of after marketing tactics 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 individual 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 all CRM and relationship marketing perspectives is its focus on co-operative
and collaborative relationships between the firm and its customers, and/or other marketing
CRM is based on the premise that, by having a better understanding 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 20,000 customer surveys conducted in 40 countries by
Info quest.
The conclusions of the study were:
• A Totally Satisfied Customer contributes 2.6 times more revenue to a company as a
Somewhat Satisfied Customer.
• A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat
Dissatisfied Customer.
• A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a Totally
Satisfied Customer contributes to a business.
• By reducing customer defection (by as little as 5%) will result in increase in profits by 25%
to 85% depending from industry to industry.
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An important facet of CRM is “customer selectivity”. As several research studies have shown
not all customers are equally profitable (Infact in some cases 80% of the sales come through
20% of the customers). The company must therefore be selective and tailor its program and
marketing efforts by segmenting and selecting appropriate customers for individual marketing
programs. In some cases, it could even lead to “outsourcing of some customers” so that a
company better utilize its resources on those customers it can serve better and create mutual
value. However, the objective of a company is not to really prune its customer base but to
identify appropriate customer programs and methods that would be profitable and create value
for the firm and the customer. Hence, CRM is defined as:

Customer Relationship management is a comprehensive strategy and process of acquiring,

retaining and partnering with selective customers to create superior value for the company
and the customer.

As is implicit in the above definition, the purpose of CRM is to improve marketing

productivity. Marketing productivity is achieved by increasing marketing efficiency and by
enhancing marketing effectiveness. In CRM, marketing efficiency is achieved because
cooperative and collaborative processes help in reducing transaction costs and overall
development costs for the company. Two important processes for CRM include proactive
customer business development and building partnering relationship with most important
customers. These lead to superior value creation.

The basic concept is that the customer is not someone outside the organization, he is a part of
the organization.

Key CRM principles

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. As the satisfaction level for each customer
improve 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

• 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.

CRM in Banks
For long, 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 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
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 realise 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.
CRM is a simple philosophy that places the customer at the heart of a business organisation's
processes, activities and culture to improve his satisfaction of service and, in turn, maximise the
profits for the organisation.
A successful CRM strategy aims at understanding the needs of the customer and integrating them
with the organisation's strategy, people, technology and business process.
Therefore, one of the best ways of launching a CRM initiative is to start with what the
organisation 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 organisations 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 realisation 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.

About Axis Bank

Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life
Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. and other four
PSU companies, i.e. National Insurance Company Ltd., The New India Assurance Company, The
Oriental Insurance Corporation and United Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 355.74 crore with the public holding (other
than promoters) at 57.26%.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
Presently, the Bank has a very wide network of more than 572 branch offices and Extension
Counters. The Bank has a network of over 2468 ATMs providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.

Mission And Values

Our Mission
• Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
• Continuous technology upgradation while maintaining human values.
• Progressive globalization and achieving international standards.
• Efficiency and effectiveness built on ethical practices.
Core Values
• Customer Satisfaction through
○ Providing quality service effectively and efficiently
○ "Smile, it enhances your face value" is a service quality stressed on
○ Periodic Customer Service Audits
• Maximisation of Stakeholder value
• Success through Teamwork, Integrity and People


Software is to India what oil was to Gulf. It is therefore no surprise that the Indian companies are
jumping into the CRM bandwagon to seize a chunk of the global market, both products as well as
With is vast talent pool; India is fast becoming an important development base of major CRM
companies. This trend is likely to increase in the future. Call centres, catering primarily to the
American and European markets are coming up in and around the metros. With the easing of
infrastructure constraints, India is likely to emerge as a significant player in this segment.
Adoption of CRM by Indian companies is at an infancy stage. The CRM enabled companies
include Modi Xerox, Tata Telecom, TVS Electronics, HP India, Tata Infotech, Carrier
Refrigeration, Tata Teleservices, Satyam Infoway,Planet M, and EpicenterTechnologies among
many others.
India even has a CRM Foundation in New Delhi, founded with the purpose of assessing and
improving CRM practices. Founding members include Tata Telecom, Escotel, Modi Xerox, Global
Groupware, AC Nielsen, Carrierr Airrcon, and Motorola India, among others.