Beta Bank Case Organization

Case study

Filipescu Anka Eirini

Abstract
The following paper is an overview of the Beta Bank case study and it aims to
identify the challenges and problems faced by Beta bank due to various changing
factors. In addition after pointing out the problems and challenges , some
recommendations are provided along with a CRM strategy plan for developing and
implementing the strategy, in an attempt to help Beta bank regain its competitive
advantage. The CRM strategy plan is analyzed in steps and explained. Further down
the conlcusion follows.

Table of contents
1. Introduction ……………………………….......................p.2

2. Problem statement………………………………..............p.2

3. Literature review………………………………................p.4

3.1 Recommendations………………………………...p.4

3.2 CRM strategy plan………………………………..p.6

4. Conclusion………………………………............................p.8

5. References ………………………………............................p.9

1. Introduction

Today many industries have realized that the only way up to success is to
focus more on the customer’s wants and needs. In other words, companies are starting
to shift from transactional marketing to relationship marketing. Such a case is
presented below, which is an overview of how Beta bank conducts business in the
new challenging environment and how the bank deals with certain changes.
Beta bank was established in the United Kingdom, 300 years ago and since
then holds a strong position in the financial institution elite of the country. The bank
has grown significantly over the years, by gaining more clients because of the
innovative and attractive products it offered. However over the past two decades the
bank started to face various challenges which acquired certain changes to be done in
order to sustain the existing position in the industry. It was then that Beta bank
introduced the three principle routes of banking to its clients, such as more branches,
telephone, and internet. But still, the manager recognizes, the main focus of the bank
was to acquire new customers rather than retaining the already existing ones and that
seems to be a problem even now.
This paper aims to point out the various problems that the bank faces now and
that are presented in the case study and to recommend further actions. In addition a
CRM strategy plan is included so as to help the bank’s marketing and management
system.

2. Problem Statement

The case study provides a brief review on the past and current situation of
Beta Bank having the main problems pointed out. To begin with, due to globalization,
which has opened all borders for business, the banking sector in UK has been facing
many challenges. One challenge that Beta Bank faces is the fierce competition of the
new entrants on the market but also the competition from the already existing players.
Moreover, Beta bank has to keep up with all the technological changes that
occur and implementing various technologies and programs so as to compete and
survive. Another problem that the bank faces is the internet channel. As Reichheld
(2003) says “With the arrival of the internet, it’s harder than ever to keep a customer,
they have far more choices, and they are a click away from checking out the
competitors offers.” So the internet besides bringing opportunities of expansion has
brought more competition, too. However the e-manager explains that the internet
usage is not so broad yet when it comes to making decisions and transactions for a
loan and other transactions that require important personal information. People are not
trained well, and customers are not yet well informed and fear that the internet is not
secured enough for serious transactions. Although Beta Bank decided to redesign
everything from branches to the internet web-site, the results were not as expected.
However as Fairhurst (2000) said, the challenge of the e-business or more
precisely one challenge of the e-CRM is to promote the Internet transactions to
customers that have already trusted the bank and subsequently will not fear the usage
of the web application. According to Renart and Cabre (2008) a number of
companies start from a situation where they are pursuing a basically transactional
marketing strategy , that is, one focused almost exclusively on acquiring new
customers, without even aspiring to identify customers or build a loyal customer base.
This seemed to be the case in Beta bank also , because the main focus of the bank was
to acquire new customers rather than retaining the existing ones although this strategy
according to Dawson et al (2003) is time-consuming and it costs so much to acquire
new customers that many of these relationships are unprofitable over the early years.
So the bank started to realize that the solution to the problem would be the “single
customer view” approach, meaning that every customer will be exclusively served in
the case of purchasing a loan or other. This would retain customers by nurturing them
more, as the “single customer view” is a more personalized CRM approach.
Beta bank nowadays has its main focus on the WAP banking regarding the fact
that more and more people use the internet for their daily transactions. The
management of Beta bank acknowledges that in the future the success will rely mostly
on retaining and sustaining e-customers by offering them competitive and efficient
products and services, by creating one-to-one relationships mostly on the e-business
part. But in order to approach the customer more, an implementation of CRM is
required and moreover an e-CRM approach also as to attract e-customers and keeping
them from clicking to another competitive web-site.
But how well is an organization prepared for a CRM implementation? And if
there are benefits , are there any risks involved? In order to implement a CRM
strategy there are some key characteristics than an organization should have before
applying CRM. According to Fairhurst (2000), the key characteristics are to regard the
CRM as a set of activities that bring value to the customers and the business, to have
company-wide acknowledgement about each customer, their needs and their wants, to
personalize all communications to fit each customer in terms of tone, timing and
content and finally to tailor and promote other products and services to customers in
the way that they want and prefer and at the time that they need it. The above
characteristics can also be viewed as opportunities that have occurred.

3. Literature review

During the last two decades a number of changes have occurred in the banking
sector , such as institutional changes , the deregulation of the banking system, the
technological progress as well as the liberalization of capital flow between domestic
and foreign residents. Moreover these years have been characterized by many foreign
bank entries despite the findings that foreign banks are not as profitable as the
domestic ones ( Kosmidou ,2004) .Beta Bank ,as a domestic bank, although still holds
a strong position in the UK financial sector, seems to struggle to retain customers and
at the same time overcome the above challenges. Therefore some recommendations
are provided below of what the bank should do to keep up with the trends.

3.1 Recommendations

Managing relationships with customers is challenging for many firms because

they engage in many different types of transactions and their customers vary
considerably as to their wants or needs (Arnett ,2005).According to Kapoulas et al
(2002), there is a broad acceptance that relationships are becoming increasingly
important. Beta bank has realized this , but still seem to struggle in retaining
customers and keep up with the competitors. Beta bank’s problem is the internet usage
which seems to appear a difficulty on both sides: the employees side and the customer
side also. Therefore the management of the bank should be aware that building strong
relationships and gaining trust can widen up the opportunity of competitive advantage
over the internet. Kapoulas et al (2002) also stated that managers started to accept the
fact that using EMN and RM to communicate with clients can create a relationship
dialogue and therefore can lead to a more intimate and mutually beneficial e-customer
relationship. So, as a result the management of Beta bank should get more involved
into knowing the actual customers of their company , learn their needs and wants and
apply a more customer-focused approach when it comes to tailoring products and
services.
Moreover , Beta bank’s multi-channel approach to banking needs integration,
meaning that the management realized it’s time for closer relationships with
customers. As Gronroos (2000) stated it is time for firms to focus on creating a
relationship dialogue with the customer, enabling thus both the customer and the firm
to “reason ” together and eventually develop a knowledge platform which will add
value to the customers as well as forge the relationship between them and the firm.
Therefore Beta bank should look more into sustaining and nurturing the already
existing relationships with the customers rather than chasing new opportunities-
customers. However nowadays customers are smart, powerful, highly informed,
armed with a proliferation of choices demanding that every interaction they have with
a company leaves them fully satisfied (Wu, 2005). Based on these facts , Beta bank
should implement as mentioned also in the case study a “single customer view”. As
Ian Beaumont (2009) said “A well implemented SCV delivers benefits across
marketing , client services , operations and business strategies”. The SCV is a IS
platform which will change the operations of the banks and enable it to be more
customer-focused since this is the case of Beta bank lack. With this approach Beta
will be able to consistently collect customer information at the point of sale, track
customer habits and preferences and afterwards this data will be updated cross-
compared and ready to provide valuable information about tailoring products and
services (Sun Microsystems, 2008).
Nonetheless, in order for Beta bank to seek the SCV approach, it firstly has to
change and enforce the CRM strategy.

3.2 CRM strategy plan

Customer Relationship Management (CRM) has become one of the key

business strategies of the late 20th century and the early 21st . There are many different
definitions of what CRM means but the most important thing to remember is that
CRM is not only a technology solution, it is way to run the business (Fairhurst, 2000).
When implementing a CRM strategy companies have to ask themselves three
questions, according to Renart and Cabre (2008): Does their company have the
necessary realtionship potential? Are customers likely to want to have a relationship
with the company? And Is a low-intensity CRM strategy appropriate? Once a
company has answered all three questions and found that a CRM strategy is feasible
can then start designing and implementing the strategy.
However there are four steps that implicate the implementation and adoption
of a CRM strategy. According to Kumar and Reinartz (2006), the four steps are:

1. Gaining enterprise commitement

In the first step all the departments of an organization should be brought

together so as to join forces and information to create valuable inputs. In this process
every department should be informed as to what benefits and opportunities the
implementation of this strategy will include.
In the case of Beta bank this should be very helpful as the management and
the various employees will be better informed how to use CRM.

2. Build a CRM team

When the first phase of the implementation is achieved and enterprise

commitment is achieved, the company should assign to a group of people to be the
CRM team , which will make decisions, provide information and recommend actions
to the whole organization. The group preferably should be consistent with personnel
from all departments such as management, marketing, e-management, sales, financial
and CRM experts from outside the company.
In the case of Beta bank this should be very helpful hence there will be a team
from all departments that will cooperate on a better web-site and better e-CRM
strategies.

3. Analyze business requirements

In this step the current situation of how the business is done, will be analyzed
and valued as to whether and where should the changes take place. The departments
or the areas that have problems will be identified and each department will set an
array of goals and objectives that should be considered. Furthermore, actions that are
harmful for the organization will be eliminated as to develop an efficient and effective
CRM strategy.

4. Define the CRM strategy

In the fourth step there are five other areas that should be considered and
covered extensively:
A) the first one is the value proposition which is the products and services
offered to the customer. The real wants and needs of the customer and the real offers
by the company.
B) the second one is the business case which connects the customer value with
the shareholder value.
C) the third one is the customer strategy which is a package of the customer
understanding, customer affiliation , how competent is the management when it
comes to customers.
D) Enterprise transformation is the fourth one, and covers areas such as the
organization, the process of business, the technology infrastructure, the location and
others.
E) and the final one is the relationship management of stakeholders, which
focuses on the training of the employees providing them with the knowledge to
handle the new system.

4. Conclusion

To conclude with, according to Lassar(2008) studies have shown that

successful CRM improves both revenue and profitability of the organization, by
developing a 360-degree understanding of the client , and enables effective and
efficient business processes integrating people and technology, continual learning and
dynamic application of customer intelligence to further the business. Therefore if
implemented correctly CRM will help Beta bank gain a successful competitive
advantage and help I their “success future”. However though there some risks
involved like alienating potential customer or existing one by overzealously seeking
personal information or by using the customer information in wrong purposes
(Seminerio, 2000). These risks need to be talen in consideration when interacting with
customers because you never know how much information retrieved will be positively
viewed.

5. References

1. Annesley, Christian (2006) Alliance onerhaul gives single customer view,

Computer Weekly, p.6-6

2. Arnett, Denis and Badrinarayanan, Vishag (2005) Enhancing Customer Needs

Driven CRM Strategies, Journal of Personal Selling& Sales Management, 25 (4),
p.329-343

3. Beaumont , Ian (2009) Matrix Data, Precision Marketing, p.12-12

4. Drake, Leigh (2001) Effieciency and productivity change in the UK banking,

Applied Financial Economics, 11, p.557-571

5. Fairhurst, Paul (2000) e-CRM, Journal of Database Marketing, 8 (2), p.137-142

6. Gronroos, C. (2000) Service Management and Marketing: A customer Relationship

Management Approach. John Willey & Sons, Inc.

7. Kapoulas, A. et al (2002) Say Hello, Wave Goodbye: Missed opportunities for

electronic relationship marketing within the financial services sector? International
Journal of Bank Marketing, 20 (7), p.302-310

8. Kosmidou, K. et al (2004) Foreign versus Domestic banks performance in the UK:

a multicriteria approach, Computational Management Science,1, p.329-343

9. Kumar, A. and Reinartz, W.J (2006) Customer Relationship Management : A

databased approach. John Willey& Sons, Inc.

10. Lassar, W. et al (2008) Developing a CRM strategy in your firm, Journal of

Accountancy, p.68-73

11. Reichheld, F. et al (2003) Winning Customer Loyalty id the key to a winning

CRM strategy, Ivey Business Journal, p.1-5

12. Renart, L. and Cable Carlos (2008) Paths to continuous improvement of a CRM
strategy , Trziste/Market, 20 (1), p.61-77

13. Sevvinerio, M. (2000) E-CRM: The right way, eWeek FastTrack 100, p.71-80

14. United Kingdom Commercial Banking Report Q2 (2010) UK Banking Sector

Outlook, Business Monitor International, p.22-24

15. Wu, L.L and Wu, K.W (2005) A hybrid technology acceptance approach for
exploring e-CRM adoption in organizations, Behavior & Information Technology, 24
(4), p.303-316