Customer Relationship Management

Peter drucker said `The purpose of the business is to create customer.Implied in his words and work is the importance of keeping those same customer and of growing the dept of their relationship with you.Customer relationship is a comperhensive appraoch for creating,maintaining and expanding customer realtionship.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 organizations current and potential customers.CRM entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to: Retain customers through better customer experience. Attract new customer. Decrease customer management costs. Understand the customer.

CRM solutions provide you with the customer business data to help you provide services or products that your customers want, provide better customer service, cross-sell and up sell more effectively, close deals, retain current customers and understand who the customer is. Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:

Increased sales through better timing by anticipating needs based on historic trends Identifying needs more effectively by understanding specific customer requirements Cross-selling of other products by highlighting and suggesting alternatives or enhancements Identifying which of your customers are profitable and which are not Technology and the Web has changed the way companies approach CRM strategies because advances in technology have also changed consumer buying behavior and offers new ways for companies to communicate with customers and collect data about them. With each new advance in technology -- especially the

proliferation of self-service channels like the Web and Smartphones -- customer relationships is being managed electronically.

From this structure of crm we can say it is necessary of every organization to conduct crm process. Today, many businesses such as banks, insurance companies, and other service providers realize the importance of Customer Relationship Management (CRM) and its potential to help them acquire new customers, retain existing ones and maximize their lifetime value. This structure includes 4 stages Marketing Sales Feedback Support

If we have product A which is newly introduced in market so the 1st step will be making the product popular among the public. So for that purpose we need to do marketing of that product. After doing marketing it will be obvious that product sales will take place,people will tend to buy the product so it is necessary to take feedback about taste,quality of product etc.It can be there will be complain about some defective product so in this step company should make a department who handles the complains and support the customer.

CRM BUSINESS CYCLE

1. Understand customers needs 2. Differentiate 8. Retain valuable customers. Based on customer needs, characteristics and behavior.

7. Acquire customers and prospective customers.

Business Cycle Of CRM

3. Develop product services, Channels to meet customers needs.

6. Deliver increased value to the customers.

4. Customize by customer segment.

5. Interact with customers and prospective customers.

 Understand and Differentiate:

We cannot have a relationship with customers unless we understand them what they value, what types of service are important to them, how and when they like to interact, and what they want to buy. True understanding is based on a combination of detailed analysis and interaction. Several activities are important: Profiling to understand,demographics, purchase patterns and channel preference. Segmentation to identify logical unique groups of customers that tend to look alike and behave in a similar fashion. While the promise of "one-to-one" marketing sounds good, we have not seen many organizations that have mastered the art of treating each customer uniquely. Identification of actionable segments is a practical place to start. Primary research to capture needs and attitudes. Customer valuation to understand profitability, as well as lifetime value or long-term potential. Value may also be based on the customer's ability or inclination to refer other profitable customers. Analysis and research alone, however, are insufficient. To create and foster a relationship, we have to act on what we learn about customers. Customers need to see that we are differentiating our service and communications based both on what we've learned independently and on what they've told us. At the same time, differentiation should be based on the value customers are expected to deliver.

 Develop and Customize:

In the product-oriented world of yesterday, companies developed products and services and expected customers to buy them. In a customer-focused world, product and channel development have to follow the customer's lead. Organizations are increasingly developing products and services, and even new channels, based on customer needs and service expectations. Most organizations today are not able to cost-effectively customize products for individual customers. However, products, services, channels and media can be customized based on the needs of quantitative customer segments. The extent of customization should be based on the potential value delivered by the customer segment.

Interact and Deliver:

Interaction is also a critical component of a successful CRM initiative. It is important to remember that interaction doesn't just occur through marketing and sales channels and media; customers interact in many different ways with many different areas of the organization including distribution and shipping, customer service and online. To foster relationships, organizations need to insure that:

All areas of the organization have easy access to relevant, actionable

customer information.

All areas are trained how to use customer information to tailor interactions
based on both customer needs and potential customer value.

With access to information and appropriate training, organizations will be prepared to steadily increase the value they deliver to customers. Delivering value is a cornerstone of the relationship. And remember, value is not just based on the price of the product or the discounts offered. In fact, customer perceptions of value are based on a number of factors including the quality of products and services, convenience, speed, ease of use, responsiveness and service excellence

Acquire and Retain: The more we learn about customers, the easier it is to pinpoint those that are
producing the greatest value for the organization. Those are the customers and customer segments that we want to clone in our prospecting and acquisition efforts. And, because we continue to learn about what is valuable to each segment, we'll be much more likely to score a "win" with the right channel, right media, right product, right offer, right timing and most relevant message. Successful customer retention basically involves getting it "right" on an ongoing basis. It is based very simply on the organization's ability to constantly deliver on three principles:

Maintain interaction; never stop listening. Continue to deliver on the customer's definition of value. Remember that customers change as they move through differing life stages;
be alert for the changes and be prepared to modify the service and value proposition as they change.

And so the cycle continues. As you move from one stage to the next, you gain insight and understanding that enhances your subsequent efforts. Your development initiatives simultaneously become increasingly sophisticated as does your implementation of CRM processes.

Nowadays, many businesses such as banks, insurance companies, and other service providers realize the importance of Customer Relationship Management (CRM) and its potential to help them acquire new customers retain existing ones and maximize their lifetime value. Competition and globalization of banking services are forcing banks to be productive and profitable. To retain High Net Worth individuals, banks should focus strongly on relationship management with customers. The entire service industry is now metamorphosed to become customer- specific. In this context, the management of customer relationship in financial services industry demands special focus. Gone are the days when customers at a bank did not mind the long serpentine queues and waited patiently for their turn with a token in their hand. In todays Internet era, no one has the leisure to wait. In this context, online banking is assuming a great significance. Today, banking is more customer-centric, unlike the yester when it was transaction-centric. Banks are increasingly focusing on the premise that customers choose on the service provider who differentiates through quick and efficient service. Banks are well aware that their success is predominantly dependent on the CRM strategies adopted by them. Service providers have recognized that good CRM bonds customers with the organization for a longer term, resulting in increased revenues. With customers expectations becoming even more competitive, banks are coming up with a wide array of novel products and services every day. The challenge is for the banks to work towards ensuring that customers prefer their products and services over that of competing brands. The key to develop and nurture a close relationship with customers is by appreciating their needs and preferences and catering to their requirements. With the opening up of the economy, a number of private sector banks have joined the fray and are offering an innovative of products and services. The goal of CRM is to manage all aspects of customer interactions in a manner that enables banks to maximize profitability from every customer. Increasing competition, deregulation, and the internet have all contributed to the increase in customer power. Customers, faced with an increasing array of banking products and services, are expecting more from banks in terms of customized offerings, attractive returns, ease of access, and transparency in dealings.

To meet the challenging preferences of the customers and to stay ahead of competitors, bankers are bound to attract customers by providing a spectrum of services. Online banking, ATM banking and telebanking are just a few of them. Banks can enhance customer service by leveraging on technology, maintenance of efficient service delivery standards and business process reengineering. On their part, employees need to demonstrate certain service traits such as, putting on pleasing attire. At the end of the day, bankers should display a flair for cultivating a good relationship with customers through the mechanism of better customer service. Having understood the significance, it is prudent to plan for CRM in retail banks. To a large extent, the success of a CRM plan is dependent on the choice of the software. Towards this end, bankers should identify domain enterprise, credibility in the market, cost implementation and relationship with the vendor as factors on which vendor selection is based. The domains of software systems, multiply product database and tracking require specific CRM focus. Besides understanding the requirements for CRM implementations such as, the setting up of a CRM cell and conducting surveys at a periodic intervals to track their effectiveness, banks need to understand how CRM assists them n customer identification, acquisition and retention. As a part of the planning process, frontline executives in banks should thoroughly understand their organisational structure, infrastructure, as well as the product environment. In this context, the management initiatives for CRM assume importance. A top-down CRM focused approach that starts with the top management, percolating and permeating to all levels of the CRM is a necessity in the present business scenario. Initiatives, such as, introducing CRM audit by independent teams to identify the existing lacunae, and plugging the loopholes in the CRM strategy as per the recommendations of the audit report, are required to be adopted by the banks for reaping benefits. It is observed that banks lose their best clients to competitors due to a variety of reasons. The rationale behind losing their best clients to other service providers such as non-brokerage houses and mutual fund houses needs to be analysed by banks. Experts opine that inefficient and improper service is one major reason. The remedies suggested by them are that banks should adopt customer relationship building approaches such as responding to complaints instantaneously, analyzing the attrition of the clients in a particular product, and rating of services across the network of branches, and the creation of a suggestion box to elicit the views and suggestion of their employees. Another dimension of the relationship building exercise is to obtain an electronic feedback from customers to understand the level of acceptance of existing products, which will facilitates in developing better products. Banks can gain a competitive advantage from CRM by becoming low-cost players in the market, achieving operational efficiency and maintaining customer loyalty. The ability to predict the products that customers are likely to purchase over a period of time, increased productivity of managerial executives, sales and customer service staff, and streamlining of business processes are some of the benefits retail banks obtain by taking to successful management of their customer relationships.

Implementing the right CRM tools can enhance customer satisfaction leading to business growth. CRM enables organisations to motivate customers to initiate revenuegenerating contacts. Several CRM issues such as, its effectiveness, application and challenges draw attention of the banking industry. Having witnessed the manner in which several global banks have benefited through CRM, the Indian retail banks too need to focus on and continuously invest in the customer relationship activities. The Indian banking scenario, which is still at an embryonic stage as far as the CRM domain is considered, needs to strive towards CRM implementation to meet the emerging demands of universal banking.

Present and Future of CRM in banking Bank merely an organization it accepts deposits and lends money to the needy persons, but banking is the process associated with the activities of banks. It includes issuance of cheque and cards, monthly statements, timely announcement of new services, helping the customers to avail online and mobile banking etc. Huge growth of customer relationship management is predicted in the banking sectorover the next few years. Banks are aiming to increase customer profitability with any customer retention. This paper deals with the role of CRM in banking sector and the need for it is to increase customer value by using some analytical methods in CRM applications. It is a sound business strategy to identify the banks most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, pricing, discretionary decision making. In banking sector, relationship management could be defined as having and acting upon deeper knowledge about the customer, ensure that the customer such as how to fund the customer, get to know the customer, keep in tough with the customer, ensure that the customer gets what he wishes from service provider and understand when they are not satisfied and might leave the service provider and act accordingly. CRM in banking industry entirely different from other sectors, because banking industry purely related to financial services, which needs to create the trust among the people. Establishing customer care support during on and off official hours, making timely information about interest payments, maturity of time deposit, issuing credit and debit cum ATM card, creating awareness regarding online and e-banking, adopting mobile request etc are required to keep regular relationship with customers. The present day CRM includes developing customer base. The bank has to pay adequate attention to increase customer base by all means, it is possible if the performance is at satisfactory level, the existing clients can recommend others to have banking connection with the bank he is operating. Hence asking reference from the existing customers can develop their client base. If the base increased, the profitability is also increase. Hence the bank has to implement lot of innovative CRM to capture and retain the customers. There is a shift from bank centric activities to customer centric activities are opted. The private sector banks in India deployed much innovative strategies to attract new customers and to retain existing customers. CRM in banking sector is still in evolutionary stage, it is the time for taking ideas from customers to enrich its service. The use of CRM in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by the bank in todays competitive milieu. This has resulted in the adoption of various CRM initiatives by these banks.

Impact Of Technology In Banking

In the world of banking and finance nothing stands still. The biggest change of all is in the, scope of the business of banking. Banking in its traditional from is concerned with the acceptance of deposits from the customers, the lending of surplus of deposited money to suitable customers who wish to borrow and transmission of funds. Apart from traditional business, banks now a days provide a wide range of services to satisfy the financial and non financial needs of all types of customers from the smallest account holder to the largest company and in some cases of non customers. The range of services offered differs from bank to bank depending mainly on the type and size of the bank.
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