Customer Relationship Management as a Strategic Tool_Richa Raghuvanshi, Rashmi_MKT024

7/30/2019 Customer Relationship Management as a Strategic Tool_Richa Raghuvanshi, Rashmi_MKT024

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ISBN - 978-93-81583-46-3

National Conference on Emerging Challenges for Sustainable Business 2012

1224

Customer Relationship Management as a

Strategic Tool in the Indian Banking Sector: A

Case Study of Axis Bank at Lucknow

Dr. Richa Raghuvanshi1, Rashmi Tripathi

2

1Lecturer,

2Lecturer

1,2Amity University, Lucknow

[email protected],

[email protected]


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Customer Relationship Management as a Strategic Tool in the Indian Banking


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Customer Relationship Management as a strategic tool in

the Indian Banking sector: A Case Study of Axis Bank at

Lucknow

ABSTRACT:

Today one of the approaches which are creating the buzz in the banking sector is

Customer Relationship Management. Indian Banks are realizing that the magical

formula for attaining success in a competitive environment is to focus on

maintaining relationship with customers. The main purpose behind this study is to

analyze whether banks are really implementing the whole concept and philosophy

of CRM as a means of securing competitive advantage. The research design in

this study will consist of exploratory research whereby different aspects with

regards to CRM in the banking sector have been extracted from literature review

and tested on a sample size of both employees and customers. These results were

discussed and analyzed so as to get an indication of how far CRM is strategically

implanted to secure competitive advantage. Based on the findings, a set of

recommendations will be made so as to pinpoint how CRM can be used to secure

competitiveness.

Keywords: Globalization, Innovation, Competitive Advantage, Strategic tool &

Customer Experience.


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1. INTRODUCTION:Customer relationship management systems are becoming popular across various

sectors and have emerged as an important business strategy in today's competitive

environment in companies. It has been viewed as a process aimed at collecting

customer data, find profiles of customers and use the customer knowledge in

specific marketing activities. It is a discipline which enables the companies to

identify and target their most profitable customers. CRM implementation is on

way in many Indian banks. However such implementations are not without

hiccups. This paper takes a look at the status of CRM in Axis bank operating in

Lucknow. CRM involves new and advance marketing strategies which not only

retain the existing customers but also acquire new customers and also analyzes

their efforts in terms of a strategic framework and points out some of the

deviations that have occurred in the implementations. It has been invented as a

unique technique capable of remarkable changes in total output of companies.

Therefore, the paper reviews pertinent literature on CRM in the banking sector.

Then, the methodology employed to collect and analyze data is outlined. Then the

findings are discussed, implications are described and the paper further makes

strategic recommendations towards enhancing customer relationships in the

Indian banking sector. Directions for future research are also proposed in the

arena of customer relationship management and banking sector.

Increasing competition, proliferating customer contact, intensifying attacks oncustomer information, rising customer expectations, identifying new marketing

opportunities etc. have made Banking Sector to face superior challenges than ever

before in executing their Customer management strategies. Every organization

believes in the significance of knowing the customer. The current economic

environment and financial crisis has most probably led many financial services


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institutions to focus on their CRM strategies while screening customer

relationship as a key to profitability of a retail activity and managing the cost and

risk associated with it. Every bank wants to provide good quality customer

service. Most of the Banks believe that CRM is one of the best strategies for

increasing revenue- profit margin, developing new market share and to create

good brand image among the customers. In Marketing Customer Relationship

Management have assumed mounting importance in the overall of a Bank,

particularly when competitive onslaught has been fiercely active, Customer

Relationship Management has been recognized a, a new marketing paradigm and

is emerging as the core marketing activity. No wonder that it has emerged as a

strategic tool in the hands of marketing people. Customer relationship

management is more focused on trust, commitment and conceptualized now. This

paper deals with the role of Customer Relationship Management in Indian

banking sector, to gain better understanding of the role of CRM in maximizing

customer profitability and to serve their customer better and meet their business

objectives.

1.1 OBJECTIVES OF THE STUDY:

The research objective of this study is to try to identify the success factors for an

effective CRM implementation. This study will provide valuable information on

the viability of a CRM implementation in Axis Bank in Lucknow and on the

barriers that are related to it. The main objective of the present study will be:

to assess the awareness of CRM at Axis Bank. to assess the awareness of Customer Relationship Management at Axis

Bank.

to analyze the level of customer centric from both customer and employeepoint of view.

to evaluate the service quality offered by Axis Bank.


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2. CUSTOMER RELATIONSHIP MANAGEMENTThe process of developing a cooperative and collaborative relationship between

the buyers and sellers is called customer relationship management.CRM aims at

focusing all the organizational activities towards creating and maintaining a

customer. CRM is a new technique in marketing where the marketer tries to

develop long term collaborative relationship with customers to develop them as

life time customers. CRM aims to make the customer climb up the ladder of

loyalty.

Ideally, CRM defines an enterprise-wide program that helps to align business

processes and functions against customer driven priorities. CRM is not just a

technology but rather a comprehensive customer-centric approach to an

organization's philosophy in dealing with its customers. This includes policies and

processes, front-of-house customer service, Employee training, Marketing

systems and information. In other words, CRM is about managing the customer

portfolio efficiently and effectively by designing business policies which focus

around the customer.

2.1 EMERGENCE OF CRM

The primary reason for the emergence of CRM is the change in the marketing

environment. Today marketing model is changing from the product-centered

approach to customer-centered approach. Organization needs to create customized

offers for customers and ensure relationship by providing better customer service

and management of customer expectations. So, marketing should be devoted at

enhancing customer relationships. But one should take note of the increasing use

of the internet which is changing what is possible and what is expected in

terms of CRM as technological advances in global networks, convergence and

improved interactivity are to explain the growth of CRM . Now companies should

go beyond CRM towards whole relationship management by managing superior

value chain delivers a high level of product quality, and service quality.


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2.2 CRM IN BANKING SECTOR

According to a RBI statement, in future India will have a competitive banking

market as one of the most attractive market after 2009. 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. With intensifying competition, declining market share,

deregulations, smarter and more demanding customers there is competition

between the banks to attain a competitive advantage over one another or for

sustaining the survival in competition. In India the banking sector has been

operating in a very stable environment from last thirty -forty years. In current

scenario of banking sector the falling of interest rates and tough competition

between these players had made Indian bankers to realize that the purpose of their

business is to create and retain a customer and to see that the entire business

process is consistent with an integrated effort to discover, retain and satisfy

customer needs. But the success Of' CRM Strategy depends upon its ability to

understand the needs of the customer and to integrate them with the organization's

strategy, people, technology and business process.

2.3 CUSTOMER FOCUS IN BANKING SERVICES

As the intense competition becomes a way of doing business, it is the customer

who calls the shot in deciding the nature of products and services offered in the

market. The customers are becoming demanding, dominant and selective. In fact

the perceptions and the expectations of the customers have undergone a sea

change, with the availability of banking services to the customers at their doorsteps through the help of technology.

Marketing of customer services aims at two important goals: prosperity to the

bank and satisfied customers. Banks offer tangible services like loan schemes,

interest rates and kinds of account and the intangible services like behavior and


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efficiency of staff, speed of transactions and the ambience. The banks may need

to include customer oriented approach or customer focus in their five areas of

businesses such as Cash accessibility, asset security, money transfer, deferred

payment and financial advices.

There are four strategies available to customer relations' managers:

To win back or save customers To attract new and potential customers To create loyalty among existing customers and To up sell or offer cross services.

The future of banking business very much depends upon the ability of the banks

to develop close relationship with the customers. In order to develop close

relationship with the customers the banking industry has to focus on the

technology oriented innovations that offer convenience to the customers. Today

customers are offered ATM services, access to internet banking and phone

banking facilities and credit cards. These have elevated banking beyond the

barriers of time and space.

2.4 CRM STRATEGY:

In any organization CRM strategy is a wide-ranging and detailed definition of the

scope of' the CRM programmed towards organizational goals. "The strategy is

needed to keep businesses customer centric and to help the company constantly

evolve internal processes and technology to acquire and retain customers. CRMis fundamentally a strategy aligned with the superseding corporate strategy. It

tries to attempts to optimize a firm's profitability, revenue and customer

satisfaction by focusing on a customer centric process. The idea of CRM is that it

helps businesses use technology and human resources to gain insight into the

behavior of customers and Customer relationship management is a broad


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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 transactions the value of those customers.

Implementing CRM strategies, firms can achieve many goals such as:

Plummeting costs of sales Plummeting costs of acquiring new customers Enhanced customer satisfaction and profitability Decreasing the need to acquire so many new customers Calculate profitability of customers Higher customer retention rates

With an effective CRM strategy, a business can increase revenues by:

providing services and products that are exactly what your customers want offering better customer service cross selling products more effectively helping sales staff close deals faster

retaining existing customers and discovering new ones3. AXIS BANK:

Axis Bank Limited, formerly UTI Bank, is an Indian financial services firm that

had 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


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the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance

Corporation of India (LIC), General Insurance Corporation Ltd., National

Insurance Company Ltd. The New India Assurance Company, The Oriental

Insurance Corporation and United India Insurance Company UTI-I holds a special

position in the Indian capital markets and has promoted many leading financial

institutions in the country. The bank changed its name to Axis Bank in April 2007

to avoid confusion with other unrelated entities with similar name. After the

Retirement of Mr. P. J. Nayak, Shikha Sharma was named as the bank's managing

director and CEO on 20 April 2009. On 24 February 2010, Axis Bank announced

the launch of 'AXIS CALL & PAY on atom', a unique mobile payments solution

using Axis Bank debit cards. Axis Bank is the first bank in the country to provide

a secure debit card-based payment service over IVR.

3.1 CRM at Axis Bank:

The Axis bank customer care department is the department which handles all

customer queries, suggestions, feedback and complaints if any. Customers can

also find out all the newly introduced financial products and services by calling

here. As the name suggests, the customer care service is specially catered to serve

all the customers of Axis bank, whether existing customers or new customers. The

customer care service stretches out to all its customers with an aim of providing

relevant information regarding banking structure and the working schedule.

The Axis bank customer care centers are spread across the country in places like

Delhi, Gurgaon, Mumbai, Bangalore, Ahmedabad, Chennai, Pune, Hyderabad,

Kolkata, Pune etc. This department works in a 24x7 work environment so that the

customers can contact the bank at any time in case of any problem. Customers

from abroad and the NRI customers can call at a time when it is convenient tothem without thinking about the time in India. The bank's customer support center

not only answers customers queries over the phone but also undertakes a phone

banking facility. All the customer care executives have thorough knowledge of all

the products and services offered by the bank. That is why they are very fluent in


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answering any kind of question posed by the customer. Given below is a list of

customer care phone no.

3.2 Axis Bank Customer Care Phone Number

The customer care numbers of Axis Bank can provide great help to the users as

they can enquire about their problems from the customer care department. Also

Axis Bank ensures that there is availability of well qualified professionals in order

to satisfy customers and give appropriate solutions to their queries.

3.3 Axis Bank Customer Care Toll Free Number

The customer care toll free numbers of the Axis Bank for Lost Credit Cards are:

1-800-233-5577

1-800-209-5577

1-800-103-5577

This number remains a toll free number if contacted from anywhere in India from

a MTNL or a BSNL landline phone.

NRI / Other customers can access services of phone banking from outside India

by dialing +91 22 27648000.

For blocking of Debit cards or Prepaid cards, the 24 hour emergency number

is +91 22 67987700

3.4 Axis Bank customer care SMS Service

You can also send them an SMS on their number 5676782 or 9717000002. The

customer care executive of the bank would either call you up or reply your query.

Queries SMS Code

Balance Enquiry BAL


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Last 3 Transactions MINI

Cheque Status CHQSTATUS

Cheque Book Request CHQBK

Security Balance in Demat Account DMAT

Activate SMS Banking ACT

De-Register SMS Banking SUSPEND

Know SMS Banking Registration Date REGDATE

3.5 Axis Bank Customer Care e-mail Service

Contact [email protected] for Credit Card Related issues

Contact [email protected] for Debit Card Related queries

Contact [email protected] for Mobile Banking queries

Contact [email protected] for NRI Related queries

Contact [email protected] for Investor relations queries

4. Research MethodologyThis is an exploratory research using primary data collected through a

questionnaire and secondary data through literatures, books, articles, journals and

internet. Two questionnaires were framed one for customers and one for

employees working at Axis Bank, Lucknow pertaining to the relationship building

aspect of CRM. First questionnaire had 10 questions for customers which were


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framed using the relevant variables identified from literature review and was

concerned with customer perceptions on complaint handling and his/her

behavioural intentions. Second questionnaire had 12 questions for employees

focused specifically on the interaction with the customer service representatives.

Necessary demographic details were also collected to serve as categorizing

variables.

The method used to administer the questionnaire was through a personal

interview so as to obtain more accurate, reliable and valid information and to

make the respondents at ease by maintaining a social rapport with them. The

target population to be sampled was the individual customers and the employees

of the Axis Bank at Lucknow. During this period Study was done on the various

parameters to extract the facts related to CRM in Axis Bank at Lucknow.

4.1 Research Findings: Due to paucity of time we were not able to collect large

number of data but still we were able to find suggestions which are going to help

the bank to perform better. A sample of around 50 customers and 25 employees of

five branches of Luck now district were selected. With the help of the

questionnaire developed for both employees as well as customers were collected

to analyze the level of customer relationship maintained by the organization and

the level of customer satisfaction that the customer was able to get. The

questionnaire is attached with the paper.

As per the data collected via questionnaire prepared for both the customers and

employees one thing that is quite evident that both are fully aware about the

customer relationship management. The employees are trained how to deal with

the customers and their problems and queries. Due to the emergence of the

concepts of CRM one thing that is quite sure that they both are quite aware of

their role. Though there are some problems but still they can be managed.

From the point of view of the employees, they are quite aware about the CRM.

The above details regarding the type of customer services offered gives a


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feedback that they know their job well, there are areas that they need to work on

and they are working on them too.

Like from the point of view of the customers sometimes they have to wait a little

long but that is only during weekends when there are a huge number of

customers. Other than that as per the survey conducted there are hardly any

problems regarding the management. As the bank had made necessary help desks

for each of its services that are offered.

This result has to do with the new system and technology-based process adopted

by the Indian banking industry. The Indian Banking Industry has seen a

revolution in the way it has been operating and rendering their service. Consumer

banking services have become easier and convenient. Apart from technology, the

changing demographic structure of Indian population that shows a young working

population has created a demand for better services.

The respondents have shown unfavorable views with respect to banking

experience, transaction accuracy and promptness. However, customers share

positive views concerning bank trustworthiness and accuracy of banking

solutions. Therefore, it can be argued that customers trust their bank.. Indeed,

trust is seen as a critical construct in a range of discipline areas including CRM.

Further, within the realm of relationship marketing, trust has been recognized as

an important variable for the success of relationships in the banking sector.

The study demonstrates that most of the customers have positive perceptions

pertaining to their Bank keeping them up to date with the best ways of investing

money and they are of the opinion that the information provided by their banks

are up to their expectations. Nevertheless, the overall satisfaction with website

being informative and easy to retrieve information is quite favorable and banks

are striving to sell their experience through electronic technologies in order to

create a seamless banking experience. New communication and information

technologies and self-service systems provide some utilities of space and time

which can be valued by the consumers. Banking customers will gain several


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benefits by adopting online technologies which in turn will lead to a superior

quality of service, thus, providing a seamless online experience which will enable

better relationship building and management.

It can be deduced that the Indian banking sector has not been able to value

customer relationships. Therefore, the overall empirical results provide a strong

support for Indian banking sector to review its tactical strategies as far as the

ability to respond to customers expectations is concerned, provision of an

excellent service at any point of contact, convenience and comfort through

innovative and modern banking service.

4.2 Steps to follow: Overall the banks are approaching CRM as a tool for

building customer base and increasing the sales. These misinterpreted views held

by the banks are damaging the image of the banks and the customers are losing

confidence on their bankers. Banks needs to take special efforts to change the

image of their banks, if at all they want to realize the possibilities of building

strong relationship with their customers.

The overall findings of this research reveal that the Axis Bank has failed to

convince their customers on their CRM efforts. Various CRM initiates and

dimensions measured in this study report unfavorable response. This under-

performance has occurred in spite of technological developments and new

processes in place. So, for proper application and implementation of CRM in Axis

Bank the following steps should be taken to minimize the work regarding

adoption of CRM strategy. These are:

Identification of proper CRM initiatives Implementing adequate technologies in order to assist CRM initiative Setting standards (targets) for each initiative and each person involved in

that circle

Evaluating actual performance with the standard or benchmark Taking corrective actions to improve deviations, if any There should be more help desk for dealing with the customers.


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Front office executives should stop looking at customers for multipleproduct promotion and start focusing on making the customers feels

comfortable in terms of service consumption.

It is important for banks to handle the customers directly through theirhuman resources rather than IVRS (recorded voice) at the appropriate

stage in the process.

Try to reduce the customers visits to the bank by redressing the problemson phone,

e-mail etc.

The banks need to promote branch banking or branch contact numbers.. Employ more relationship executives for catering the needs of the people

visiting the banks.

Efforts should be made to redress the problem of the customer ASAP.

5. ConclusionCustomer Relationship Management is concerned with attracting, maintaining and

enhancing customer relationship in multi service organizations. CRM goes

beyond the transactional exchange and enables the marketer to estimate the

customer's sentiments and buying intentions so that the customer can be provided

with products and services before the starts demanding. Customers are the

backbone of any kind of business activities, maintaining relationship with them

yield better result.

This study provides a step in understanding the existing CRM strategies in Axis

Bank at Lucknow. The findings indicate that there are several loop holes in the

existing tactical CRM strategies in Axis Bank at Lucknow.This study is an

example of the knowledge that can be gained in understanding the effectiveness

of front end CRM strategies in the Indian banking sector from the customer

perspective and further in-depth case study analysis can be executed to give more

on CRM strategies in the Indian banking sector.


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This study shows that if organizations want to attain a sustainable competitive

advantage through CRM, they should efficiently apply all the CRM resources to

create CRM process capabilities which are unique and cannot be copied by other

organizations. There is a direct relationship between perception and satisfaction,

important. And employing CRM may only strengthen the relationship between

perceptions and up-buying and cross buying which is all in support of introducing

CRM in service sector. Banks are realizing that CRM is the magic bullet that

helps financial institutions to build stronger and more profitable relationships.

Hence Banks should focus on delivering to customers by having a concise and

precise ways of doing things through effective CRM solutions rather than

developing product strategy.

References:

Anand, S (2008), Customer Relationship Management in Indian Banks,Journal of

Professional Banker, Dec. 2008 pp 66-70.

Bholanath Dutta, CRM in Financial Services Marketing, Journal of MarketingMastermind,

Sept 2008.

CRM In Banking Concepts and Cases,The ICFAI University Press.Hyderabad,

Customer Relationship Management Emerging Concepts, Tools andApplications, Tata

McGraw Hill, New Delhi, pp. 3-25.

Customer Relationship Management ( By, Roger J. Baran Robert J. GalkaDaniel, P. Strunk. Indian Edition ISBN -13 : 978-81-315-05182-2).


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Jain Subhash C. Marketing Strategy (Planning. Implementation, andControl) (ISBN 81-315-0543-X)Edited by V V Gopal year 2004.

Kamath, K.V, S.S. Kohli, P.S. Shenoy, K. Ranjana, R.M. Nayak, P.T.Kuppuswamy and N. Ravichandran, (2003), Indian Banking Sector:

Challenges and Opportunities, Vikalpa, Vol. 28(3), 83-89.

R.S. Prasad , 2005. Understanding CRM Present and Future. The ICI FAIUniversity Press. Hyderabad

Parvatiyar A and Sheth JN (2001), Conceptual Framework of CustomerRelationship in

Pisharodi R et al (2003), Relationship Strategy, Effectiveness andResponsiveness in

Rajiv Joshi, Customer Relationship Management : Free and Open SourceCRM Software

for SMEs, Journal of Marketing Mastermind, Dec. 2008.

Ramkelawon Bhisham, Customer Relationship Management as an IntegratedApproach in the Banking Sector A Case Study of a local bank in Mauritius

Sarangapani, A (2008), Customer Relationship Management in BankingSector, Journal

of Professional Banker May 2008 pp 39-47.

Services Marketing, Journal of Relationship Marketing, Vol 2, No. 1, 2003pp. 3-22.

Shainesh G and Sheth JN (2006), Customer Relationship Management AStrategic

Perspective, Macmillan India, New Delhi, pp 16-29.

Sisodia R.S and Wolfe D.B (2000), Information Technology: Its Role inBuilding,

Maintaining and Enhancing Relationships, in Handbook on Relationship

Marketing, Saga

Publications, pp 526-563.


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Shinde, Govind P, Prof Kuldeep bhalerao and Ms Manisha Dubey :Customerrelationship initiative in banking sector: a case of ICICI Bank

Websites:

www.dmnews.com/Datamonitor-suggests-orcle-SAP-likely-to-remain-atop-CRM

market/article/98266.

www.opensourcestrategic.com/ofbiz/index.php. www.atosorigin.com/enus/ Services/Solutions/Systems Integration/Solutions/CRM/. www.crm review.com/software 2. Php. http://www.ameinfo.com/43019 http://networkmagazineindia.com/200505/coverstory01.shtml Article Source:

http://EzineArticles.com/?expert=Dr._Gomathi_Viswanathan


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ANNEXURE I

Questionnaire for Employees

Date place:

1. Please specify the need to implement CRM in your bank. Improved performance As a status symbol Satisfied customers More business. Do customers give references to other people for your bank

2. What types of services are provided by Axis Bank for Customerrelationship management?

3. Are the customers aware of the CRM in your bank? yesno

4. CRM needs to be improved in your bank. yesno

5. Do you think that CRM is very important in the service sector speciallybanks?

6. Have you implemented CRM guidelines yesno

7. Have you redesigned jobs according to requirement of CRM yesno

8. Have you improved relations with customers yesno

9. Have you benchmarked your organizations performance with bestpractices with other banks?


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10.On a w hole are you satisfied with the CRM in your bank? yesno

11.CRM needs to be improved in your bank. yesno

12.Any suggestions or recommendation that you would give to improvecustomer retention and satisfaction?

ANNEXURE II

Questionnaire for Customers

Name:

Designation:

Type of a/c in axis bank:

1. Are you satisfied with the customer services at axis bank?

2. Which is the best service provided by axis bank?

3. How much time it takes you to get your job done at axis bank?

4. Any difficulty faced during your visit?

5. The behavior and response of the employeesFriendly cordial not good ok

6. Any other account at axis bank?


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7. Since how many years you are with Axis Bank?

8. Would you like to recommend your friends or relatives to have an accountin Axis Bank?

Yes No

9. Any a/c has been opened on your reference?

10.Any suggestion or recommendations that you would like to give regardingcustomer relationship management at Axis Bank?

Customer Relationship Management as a Strategic Tool_Richa Raghuvanshi, Rashmi_MKT024

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Transcript of Customer Relationship Management as a Strategic Tool_Richa Raghuvanshi, Rashmi_MKT024