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ago have changed the landscape of several sectors of the Indian economy. The Indian
banking sector is no exception. The economic reforms have also generated new and powerful
customers (huge Indian middle class) and new mix of players (public sector units, private
banks, and foreign banks). The emerging competition has generated new expectations from
the existing and the new customers. The new rules of competition require recognition of the
importance of consumers and the necessity to address the needs through innovative products
supported by new technology. Perceptions and expectations of the customers have undergone
a sea change, with the innovative and modern banking services offered to the customers. This
necessitates banks to include a customer-oriented approach whereby they build, maintain and
manage longstanding relationships with their profitable customers in order to gain sustainable
competitive edge.
Customer relationship management (CRM) has been as important to the banking
industry at the start of the 21st century as it has been to any other industry. Many banks have
used CRM tools to acquire more customers and to improve relationships with them. A key
aspect in banks embracing technological platforms and delivery systems is the impact this
will have on bank-customer relationships. Therefore, in order to achieve banking excellence,
meeting customer needs and offering innovative products is not sufficient in itself. The
balance between relatively high costs of relationships with customers and the need to
maintain profit growth needs to be finely tuned, if marketing is not to revert back to a
transactional paradigm. Likewise, increased customer expectations have created a
competitive climate whereby the quality of the relationship between the customer and the
institution has taken a greater significance. The development of effective customer
relationships is widely advocated as a key element of marketing strategies in the service
sector by Ennew (1996). Therefore a binding and long-term customer relationship seems to
be necessary for many banks to react to the changed conditions and to guarantee the
continuity. The Indian banks are following the CRM practices to maintain the long, healthy
and profitable relation with their customers as they have realized that they will gain the
strategic and economic benefits associated with CRM by integrating their organisation
capabilities - structure, processes, skills and metrics - into the added intelligence of CRM
technologies. The CRM practices of the selected banks are detailed below.
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Saving: Need to save for the milestones and protect an individual's savings
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Eliminate multiple data version by creating single version of data at any point of time.
Provide integrated system with existing transactional data system (CBS, Treasury etc)
and other applications.
Creating a centralised Single Data Repository (SDR) to provide effective DSS / EIS /
MIS.
Reduce the time and effort in gathering, consolidating and analyzing information and
generate reports / output faster.
Facilitate Bank to take informed decision based on accurate data using various
technology tools.
centralized depository application, branches are equipped to provide depository services for
both the NSDL as well as CDSL. The Bank has launched an Online Trading System for
Institutional Trading. The Banks Cash Management System is a full-function web-enabled
cash management solution offered to the Banks customers, covering services like Receipt
Management (Collections), Payment Management and Invoice Management (Receivable and
Payable
Management).
The
SWIFT
facility
for
worldwide
inter-bank
financial
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generated online and e-statements are being sent to customers. Following online banking
services have been provided by the bank to facilitate its customers:
Internet Banking, SMS Banking, Tele Banking, Online Bill Payment, E Payments, Prepaid
Gift Cards, Credit Cards, ATM funds Transfer.
THE CRM AT STATE BANK OF INDIA
The need for system automation became critical at SBI. The challenge was to meet
the demanding service and fulfillment levels of the growing customers needs and wishes.
SBI was on the lookout for a technology solution that was easy to implement, cost-effective
and robust to expand its presence in the insurance sector and achieve a higher degree of
service differentiation. Although the organization had a centralized system, most of the work
was done manually. They had client/server architecture in place. But it was not integrated with
the legacy systems.
Early on, the top management realized that technology was a crucial driver for
product and service delivery. Although using the extensive SBI group platform for crossselling products and services was a viable option, reaching and engaging the customer cost
effectively required a technology backbone. Earlier, they had little enterprise software to
support its business and the processes were carried out in an ad-hoc manner.
The Bank has also set up a Standing Committee on Procedures and Performance
Audit on Customer Services, comprising of three eminent public personalities as members
along with both the Executive Directors and four General Managers of the Bank. This
Committee oversees timely and effective compliance of the RBI instructions on Customer
Service and also reviews the practices and procedures prevalent in the Bank and takes
necessary corrective steps on an on-going basis. The Bank has put in place a Customer
Grievance Redressal Policy, approved by the Board, and a well structured Customer
Grievance Redressal Mechanism. The General Manager in charge of the Operations and
Services is designated as Nodal Officer for customer complaints regarding the Bank. At
Zonal and Regional levels, Zonal Heads and Regional Heads are designated as Nodal
Officers for their respective Zones and Regions. The names of all Nodal Officers along with
their contact numbers are displayed in all the branches. A Note on Review of Customer
Services and Grievances Redressal Machinery is placed before the Board of Directors every
quarter giving position of customer complaints received at Regional Offices and Head office
and the follow up measures with important initiatives taken by the Bank for improving the
customer services during the period. To eradicate customer complaints fully and ensure
hassle free customer service, analysis is done on the complaints received from the customers
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and suitable timely action is taken so that there is no repetition of such complaints in future.
The Bank has Board approved policies on Customer Services and the same are placed on the
Banks website. Based on the feedback and suggestions from the grass root level customer
committees and various studies/surveys, a slew of customer centric initiatives and measures
were taken by the Bank during the year under review to improve customer service at its
branches. The Bank has adopted a total end-to-end business and IT strategy project covering
the Banks domestic, overseas and subsidiary operations.
Benefits:
SBI can now integrate and manage content, campaigns and merchandising to patrons
via the Web.
Streamlined product delivery and support processes with a single contact point on the
Web.
which have been solved. Functions like cash management, proposal details and issuing
policies all happen on the portal. Plans are afoot to use the portal for providing self- service to
customers, partners and employees. One can just come in, log on to the portal, and access any
kind of information.
SBI implemented the plans and has achieved success in some challenging areas, for
instance, it has been able to reduce the Turn around Time (TAT). With this initiative, SBI has
derived quite a few benefits to this initiative they could spot a few processes that would
otherwise never be realized. They have outsourced some routine work, which was done
centrally and was manual. Now, irrespective of the location of the work, it's done through the
portal and they are able to manage it better. SBI has focused on its ATM outlets facility to
improve customer satisfaction. It has made withdrawal /deposit more simplified and less time
consuming at branch banking. Account opening systems have been more simplified and
less time-taking. Skills of the banks' employees are being upgraded for better customer
satisfaction. Banks organisation has been restructured. Bank operations have been made fully
computerized. Mobile Banking has been implemented to provide various facilities to
customers, viz., Balance Enquiry, Mini Statement, Linking of Multiple Accounts, Fund
Transfer, Request to the Bank, Bill Payments, Ticket Booking, Shopping, Feedback/
Complaints etc.
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87
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Telling the customers how to take their complaint forward if the customers are still
not satisfied with the assistance
Reversing any bank charges that the bank applies due to any mistake
The Citibank is always committed to protecting Customer privacy and Customers
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Branch Banking, ATM, Phone Banking, Internet Banking, INSTA Banking, Mobile
Banking, Home Banking, Personalized Banking, International Banking, Citi Alert on
Demand, Bill Pay, Prepaid Mobile Recharge, CitiAlert, Citi Tap and Pay, SMS Banking,
Statement on E-mail, Online Tax Payment.
CRM AT HSBC
The HSBC Group, one of the world's largest banking and financial services
organizations, had its beginnings in Hong Kong more than 137 years ago. Today, the HSBC
Group has some 10,000 offices in 76 countries and territories in Europe, the Asia-Pacific
region, the Americas, the Middle East, and Africa.
Globally speaking, at the Group's core lies domestic commercial banking and
financial services, which fund themselves locally and do business locally. Highly efficient
technology links these operations to deliver a wide range of international products and
services, adapted to local customers' needs. The Hong Kong and Shanghai Banking
Corporation (HSBC) is the founding member of the HSBC Group. It is the group's flagship in
the Asia-Pacific region and the largest bank incorporated in Hong Kong.
By performing customer segmentation, the company can make resource planning
effectively and efficiently. Precise customer segmentation requires a huge amount of
customer information and sales figures for analysis. Below is the typical Customer pyramid,
which contains customer groups of Top, Big, Medium, Small, Inactive, Prospects and
Suspects. HSBC Personal Banking categorized customers by their "Total Relationship
Balance". To make it simple, it is the total amount of money flowing between the bank and
the customer, including money deposits, investments, insurance, etc. From the above
Customer Pyramid, the customer categories of HSBC Personal Banking are as follow:
1.
Top - This is the segment the customers of which are those who have a
total relationship balance of over one billion Hong Kong Dollars. They are HSBC's
Premier Customers, and constitute the top 5percent of highly valuable customers of
HSBC Personal Banking.
2.
Big - This is the customer segment of those who have a total relationship balance of
over one million Hong Kong Dollars. They are HSBC's Premier Customers as well
and are in the next 15percent of highly valuable customers
3.
Medium - This is the customer segment of those who have a total relationship
balance of over twenty thousand Hong Kong Dollars. They are the Power Vantage
Customers of HSBC. They are the largest group amongst the customer segments, and
make up 60percent of HSBC's Personal Banking customers.
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4.
Small - This is the customer segment of those who have a total relationship balance
below twenty thousand Hong Kong Dollars. They are the normal customers of HSBC
Personal Banking. 20percent of HSBC Personal Banking customers fall into this
segment.
5.
6.
Prospects - Those customers who are using HSBC products other than Personal
Banking, such as Corporate Banking. The bank has some data about them, and has
already established communications with them through their use of that product.
7.
Suspects - The customers of other banks. HSBC has collected some data about them,
but has not yet established communications with them.
A loyal customer is a good customer. There are two Customer Relationship
Only
very
satisfied
customers
will
be
very
loyal
to
company.
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Regulation and technological improvements are responsible for the vast majority of
innovations in banking over the past quarter century. The introduction of personal
computers and the proliferation of ATMs in the 1970s captured bank management's
attention. The regulatory changes in the 1980s fueled much of the industry's growth, then
downsizing as bankers focused on amassing market presence, which resulted in significant
merger activity. Recent technological improvements are at the root of bankers' focus as well
as a target for their significant investment.
What drove many bankers to invest in ATMs was the promise of reduced branch cost,
since customers would use them instead of a branch to transact business. But what was
discovered is that the financial impact of ATMs is a marginal increase in fee income
substantially offset by the cost of significant increases in the number of customer
transactions. The value proposition, however, was a significant increase in that intangible
called customer satisfaction. The increase in customer satisfaction has translated to loyalty
that resulted in higher customer retention and growing franchise value. Internet banking, a
product of the 1990s shows similar characteristics. Again, bankers invested believing that the
Internet was a lower-cost delivery channel and a way to increase sales. Studies have now
shown, however, that the primary value of offering Internet banking services lies in the
increased retention of highly valued customer segments. Again, the intangible called
customer satisfaction drives the value proposition. CRM is not another ATM or Internet bank.
It is not a checking account, a stock or a mortgage. CRM is primarily driven by the innovation
of technology, but unlike other technological innovations, CRM has power to help bankers
quickly and directly improve customer satisfaction. CRM is an added dimension to ensure
that what the customer expects is consistent with what the bank is prepared to deliver. One
expert in bank CRM initiatives recently said that CRM is an approach that is less focused on
providing the right services to the customer than attracting customers who are the right fit for
what the bank has to offer. Further, the primary value of CRM is its potential as a customer
retention tool.
Indian banking today is witnessing drastic changes. The liberalization of the financial
sector and banking sector reforms have exposed the Indian banks to a new economic
environment that is characterized by increased competition and new regulatory requirements.
As a result, there is a transformation in every sphere of activities of the banks in India,
especially in Governance, nature of business, style of functioning and delivery mechanisms.
The new generation banks brought the necessary competition into the industry and
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CRM has received a significant interest among practitioners and scholars, but they have mostly
neglected analytical CRM. The major function of analytical CRM is to support strategic
customer information provision and customer knowledge acquisition to help achieve the final
goal of CRM, which is to enhance customer profitability. Customer profitability is the
difference between revenue and costs.
With increased number of banks, products and services and practically nil switching
costs, customers are easily switching over banks whenever they find better services and
products. Banks are finding it tough to get new customers, and more importantly, retain
existing customers.
As CRM has been considered very significant in service industry by Abbott, J.,
Stone, M. and Buttle F., (2001) it plays a crucial role in increasing the profitability of the
organisation and also enhances market share. CRM plays a significant role in building mutual
trust with customers and providing value for customers. Dyche J., (2002) averred that
organisations use CRM in attracting new customers and retaining the existing customers.
This section addresses the analysis related to the first objective i.e. Significance of
Customer Relationship Management, of the study. In order to achieve this objective, a survey
was conducted on 200 executives and 800 customers from all the three categories of the
banks. Percentage analysis has been done to understand the individual weight of the
dimensions of significance of CRM. Descriptive analysis has been used to present the
viewpoint of the Banks executives and customers. Factor analysis has been applied to
identify the significant factors regarding the significance of CRM in banks. A two sample t
test was applied to compare the response of the executives as well as the customers from
various banks taken in the study. One-way ANOVA has been applied in order to determine
the significance of the variation among the means of samples taken from all the banks.
TABLE: 3.1 - COMPARISON BETWEEN THE PUBLIC, PRIVATE AND FOREIGN
BANKS ON SIGNIFICANCE OF CRM IN BANKING INDUSTRY: EXECUTIVE
VIEW POINT
S.
No.
CRM is significant
as it
Public Sector
Banks
Scores
N = 125
Increases profitability
Private Sector
Banks
Scores
N = 125
Foreign Sector
Banks
Scores
N = 125
115
92
118
94.4
122.5
98
117.25
93.8
120
96
121.5
97.2
94
3
4
5
6
Retains
customers
Increases
customer
satisfaction
for
products and services
Customize products /
services for customers
9
10
11
existing
Helps in developing
new
products
/
services
for
the
customers
Reduces cost of sales
effort
109.95
87.96
118
94.4
121.5
97.2
108.35
86.68
116.5
93.2
123.5
98.8
110.35
88.28
118.5
94.8
123
98.4
102.9
82.32
118.5
94.8
123
98.4
118.6
94.8
123.5
98.8
124
99.2
106.95
85.56
118.5
94.8
123
98.4
107.4
85.92
119
95.2
121.5
97.2
102.15
81.72
118
94.4
122
97.6
111.75
89.4
118.5
94.8
121
96.8
12
Provides
cross
selling opportunities
113.7
90.96
120
96
118.4
94.72
13
Increase
opportunities
117.7
94.16
121
96.8
123.5
98.8
14
Reduces
conflicts
112.25
89.8
117.5
94
124
99.2
15
116.75
93.4
120.5
96.4
122.5
98
16
Achieves reputation
for
fairness
with
customers
Provides value for
customers
111.95
89.56
120.5
96.4
123.5
98.8
113.95
91.16
122.5
98
124
99.2
113.45
90.76
117.5
94
124
99.2
114
91.2
119.5
95.6
123.5
98.8
118.25
94.6
120.5
96.4
121.5
97.2
118
94.4
120.5
96.4
119
95.2
116.5
93.2
120.5
96.4
123
98.4
118.6
94.88
123.5
98.8
121.5
97.2
17
18
19
20
21
22
23
selling
customer
95
Table 3.1 presents the executives responses regarding the significance of CRM due
to its benefits as mentioned in table. Response from various respondents indicates that Banks
consider the CRM as very significant as it in turn provides various benefits and plays an
important role in overall satisfaction of the customers. By Comparing the Public, Private and
Foreign sector Banks, it is observed that all the three categories of bankers values the CRM
due its significance but there is insignificant difference in frequency of the opinions from the
executives, with respect to the parameters mentioned in the table. All the parameters have
been considered important by all the bankers as the response varies between 95.2 percent to
99.2 percent in case of foreign banks which means the bank considers and recognise the
above mentioned benefits of CRM where as the response from the private sector bank varies
among 91.6 percent to 98.8 percent which also underpin the benefits associated with the
implementation of CRM in banks. The response of the public sector banks varies in the range
of 81.7 percent to 94.8 percent, which shows the consent of the public sector banks regarding
the significance of CRM and its associated benefits. The retention of existing customers and
improve efficiency of marketing process in the bank has been considered as the top most
benefit of CRM as both have got the 94.8 percent and 98.8 percent response of the executives
belonging to the public and private sector banks respectively. The response of foreign sector
banks indicates the retention of existing customers, reduces customer conflicts, provides
value for customers and maintains long term relations as the most precious with a value of
99.2 percent.
It shows that the executives of Private and Foreign Banks are more appreciative for
the significance of CRM over the executives of the public sector banks. However, in the rest
other points, no considerable differences have been observed and found that all the three
categories of bankers consider the same sought of assessment to these benefits of CRM. The
same has also been confirmed by Grnroos (1995) in his study where he pointed out that the
CRM implementation helps the banks in retaining the existing customers, reducing the
conflicts and improving the efficiency of banks.
Further the response of the customers belonging to these three categories of banks has
also been analysed in relation to the significance of CRM and its associated benefits in
table 3.2.
96
CRM is
significant
as it
Public Sector
Banks
Scores
%
N = 500
Private Sector
Banks
Scores
%
N = 500
Foreign Sector
Banks
Scores
%
N = 500
1.
Increases profitability
448.5
89.7
442.5
88.5
455
91
2.
351.25
70.25
453
90.6
452
90.4
3.
449.25
89.85
459.5
91.9
457
91.4
441
88.2
480
96
462
92.4
363
72.6
458.5
91.7
486
97.2
359.75
71.95
471
94.2
488
97.6
Retains existing
customers
Increases customer
satisfaction for
products and services
Customize products /
services for customers
Helps in developing
new products / services
for the customers
Reduces cost of sales
effort
Provides cross
selling opportunities
Increase selling
opportunities
Reduces customer
conflicts
Achieves Mutual Trust
with Customers
Achieves reputation for
fairness with customers
Provides value for
customers
Maintains Long term
relation with customer
Shares information
with customer related
to bank
Helps in understanding
customers needs and
expectations
Providing significant
business benefits to the
bank
Helps for better
management of
customers
Improves efficiency of
marketing processes in
the bank
460
92
470
94
475
95
449.75
89.95
442.5
88.5
446
89.2
406.75
81.35
417
83.4
452
90.4
367.75
73.55
433
86.6
460
92
391.3
78.26
410
82
457
91.4
410
82
456
91.2
427.5
85.5
383
76.6
447
89.4
410
82
422.6
84.52
445
89
470
94
411.25
82.25
434
86.8
480
96
446.25
89.25
449
89.8
440
88
410.25
82.05
409
81.8
452
90.4
446
89.2
474
94.8
490
98
403
80.6
420
84
440
88
411.25
82.25
472.5
94.5
466
93.2
434.5
86.9
472
94.4
490
98
385.75
77.15
425
85
475
95
393.75
78.75
448
89.6
481
96.2
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
97
The Significance of CRM due to various motives mentioned in the table, the
responses clearly indicate that the customers of Public, Private and Foreign sector banks
believe that the retention of existing customers is the most significant advantage of CRM as
the 92 percent, 94 percent and 95 percent of the response is in favor of this statement,
respectively. The customers of foreign sector banks have submitted their response in favor of
all the statements mentioned in the table above as the range of response lies between 82
percent and 98 percent. Further, as indicated in the table, 81.8 percent to 96 percent
customers of the Private sector banks and 70.2 percent to 92 percent customers of the Public
sector banks have favored the various statements related to the significance of CRM in banks.
The major benefits as per the customers view point are maintaining long term relation;
provide significant benefits to the bank, gaining an edge over the competitors, enhancing
customer loyalty and reduction in customer conflicts. The results have also been tested and
confirmed by Bitner (1990) as he concluded that the increase in customer loyalty and long
term relation with the customers can be achieved by designing and implementing a good
CRM process. N Subramanyam (1998) also supported that the corporate growth is highly
dependent upon the customer network and relationships maintained with them. He further
believed that the Customer loyalty has always been valuable and has become more vital for
the success of service firms. Further these results regarding the significance of CRM has also
been verified with the help of statistical techniques like mean score, standard deviation, t
test and ANOVA.
Table 3.3 is indicating the mean score and the standard deviation for the various
benefits of Significance of CRM and among the various variables, the highest mean score (x
= 4.87 and x = 4.70) by the executives and customer respectively, has been observed by the
statement that CRM is significant as it helps in retention of existing customers. Therefore, it
could be concluded that the CRM process in the banks are helpful in retaining the existing
customer as retention of customer is more profitable for the banks instead of acquiring the
new customers. The same has been supported by a survey conducted by FICCI and E&Y in
the year 2010 where they have sighted the retention of customers as the biggest challenge for
the Indian Banks in the current competitive environment. The mean score of the statements or
variables 1 to 6 and 8 to 23 are in the range of 4.56 to 4.85, which depicts that the executives
of the banks have the same opinion and agrees upon these benefits of customer relationship
management. The mean score is further observed in the range of 4.50 to 4.70 on the benefits
coupled with CRM stated at the number 3, 4, 18, 21 and in the range of 4.13 to 4.49
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mentioned at statement number 1, 2, 5, 6, 8 to 17, 19, 20, 22, 23 which indicates that the
customers have also realized the value and benefits associated with the CRM.
TABLE 3.3: MEAN SCORE TABLE OF THE RESPONSE OF THE EXECUTIVES
AND CUSTOMERS IN RELATION TO SIGNIFICANCE OF CRM
S.
No.
CRM is
significant
as it
Executives
Std.
Mean
Deviation
Customers
Std.
Mean
Deviation
1. Increases profitability
4.74
0.151
4.49
0.063
4.78
0.086
4.19
0.585
4.66
0.237
4.55
0.053
4.64
0.303
4.61
0.195
4.71
0.284
4.36
0.646
4.59
0.422
4.40
0.697
4.87
0.590
4.72
0.566
4.65
0.331
4.46
0.036
4.64
0.301
4.25
0.237
4.56
0.420
4.20
0.474
4.68
4.69
4.83
4.73
4.80
0.191
0.131
0.116
0.256
0.117
4.19
4.31
4.13
4.46
4.42
0.339
0.232
0.321
0.237
0.350
4.75
0.240
4.45
0.046
4.81
0.217
4.24
0.245
4.83
0.213
4.70
0.223
4.76
0.191
4.21
0.185
4.80
0.067
4.50
0.336
4.77
0.050
4.66
0.283
4.80
0.131
4.29
0.447
4.78
0.099
4.41
0.441
KMO: 0.882
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the scale is appropriate. Further the Bartletts test of Sphericity was also checked which
resulted in 0.000 level of significance.
S. No.
Eigen
Value
Cumulative
Percentage
Factor 1
5.30
32.2
32.2
Factor 2
1.88
10.4
42.6
Factor 3
1.24
8.3
50.9
Factor 4
1.04
7.6
58.5
100
The eighth parameter achieves mutual trust with the customer has the factor loading
of 0.755 which illustrates that the development of mutual trust is an important outcome of the
CRM which has been the main attempt of the service industry especially the financial
services industry like banks. Building up trust is basic fundamental of the CRM as loyalty
and trust are complementary to each other. Thus the CRM practice brings and enhances the
trust level of the customers in the Banks policies and practices which consequences in the
customer loyalty in last.
TABLE 3.5: FACTOR LOADINGS OF THE VARIABLES REGARDING
SIGNIFICANCE OF CRM
S. No.
F1
S1
S2
S3
S4
S5
S6
S7
S8
F2
S9
S 10
S 11
S 12
S 13
F3
S 14
S 15
S 16
S 17
S 18
S 19
F4
S 20
S 21
S 22
S 23
Factor Loadings
0.654
0.649
0.765
0.715
0.688
0.567
0.587
0.755
0.801
0.798
0.657
0.621
0.635
0.768
0.678
0.589
0.560
0.583
0.639
0.781
0.798
0.769
0.598
101
customers as it reduces customer conflicts which has scored the factor loading of 0.657 and
means that a better managed customer with a factor loading of 0.635 as their needs and
preferences has been taken care in advance and helps in improving the efficiency of
marketing process of the bank which has obtained the factor loading of 0.621.
FACTOR 3: CUSTOMER SATISFACTION
This factor is comprised of six issues related to the significance of CRM in Indian
Banking. Increase in customer satisfaction with a factor loading of 0.768 plays an important
role as it helps in understating the customers need and expectations, which has a factor
loading of 0.639. It implies that banks considers the need and expectation of the customer as
of utmost importance as the products or services can be customised accordingly which has a
factor loading of 0.678 and provides value to the customer with a factor loading of 0.589
vividly indicates that after understanding and customizing the needs and preferences of the
customers, their satisfaction level can be increased. The bank takes the help of satisfied
customer in developing the new products and services (factor loading of 0.560). The bank
shares valuable information related to bank has scored a factor loading of 0.583, which means
that the bank takes suggestions from their valuable customers for further improvement in
their process or functions. Thus from the current analysis it could be concluded that the banks
considers the customer satisfaction as an important factor to develop and maintain the
relationships with their customers.
FACTOR 4: COMPETITIVE ADVANTAGE
This era of intense competition has enforced the banks to develop the competitive
advantage over the competitors and the CRM plays as important role in achieving this
objective. The bank Differentiates from competitive products and Services with a factor
loading of 0.781 indicates that competitive markets are expecting the latest and competitive
products and services which has helped the banks in gaining an edge over the competitors
with a factor loading of 0.798 depicts that the CRM helps in building up the competitive
advantage over the competitors. It also improves the reputation of banks being fair in the
process with the customers with a factor loading of 0.598 which in last provides significant
intangible benefits to the banks has a factor loading of 0.769.
Thus from the above factor analysis and factor loadings, it is evident that the CRM is
highly valuable for the Indian banks in current economic scenario.
102
Loyalty
and
Executives
(n = 25)
Mean
S.D.
4.51
0.204
0.374
Customer Retention
4.44
Customer Satisfaction
4.41
0.237
4.50
0.149
Competitive Advantage
Customers
(n = 100)
Mean
S.D.
3.99
0.350
4.04
0.292
4.08
0.260
4.23
0.406
t-value
Sig. Vale
(2 tailed)
1.897
.76
1.944
.98
2.987
.34
1.453
.11
103
in means indicates some variance among the executives and customers but it is insignificant
as per the t value 2.090 at 0.05 level. The mean score for the customer satisfaction are 4.78
in case of executives and 4.32 in case of the customers but the variance in means has proved
insignificant as per the t value obtained 2.613 at 0.05 level. The last factor of significance
of CRM is competitive advantage and has obtained the mean score of 4.77 and 4.59 for the
executives and customers respectively but the variance has been proved insignificant on the
basis of obtained t value 2.043 at 0.05 level.
TABLE 3.7: t RATIO OF THE RESPONSE OF EXECUTIVES AND CUSTOMERS
OF PRIVATE SECTOR BANKS ON FACTORS OF SIGNIFICANCE OF CRM
Factors for Significance
of CRM
Customer Loyalty and
Trust
Customer Retention
Customer Satisfaction
Competitive Advantage
Executives
(n = 25)
Mean
S.D.
4.76
0.060
4.74
0.136
4.78
0.065
4.77
Customers
(n = 100)
Mean
S.D.
4.49
0.217
4.52
0.052
0.200
4.32
0.230
4.59
0.094
t-value
Sig. Vale
(2 tailed)
2.443
.76
2.090
.10
2.613
.78
2.043
.30
104
Executives
(n = 25)
Mean
S.D.
4.87
0.067
Customers
(n = 100)
Mean
S.D.
4.53
0.254
t-value
Sig. Vale
(2 tailed)
3.009
.15
Customer Retention
4.94
0.052
4.78
0.076
2.097
.87
Customer Satisfaction
4.90
0.042
4.52
0.093
2.487
.76
Competitive Advantage
4.88
0.097
4.68
0.238
1.055
.17
Factors
Sig. Groups
Sum
of
Squares
66.715
Df
3
Mean
Square
22.238
F1
Between Groups
4.71
25
0.188
Total
Between Groups
71.425
66.585
28
3
22.195
With in
Group
4.66
25
0.189
71.245
28
With in
Group
2
F2
Total
the
the
105
Sig.
2.356
.089
2.387
.112
F3
F4
Between Groups
66.307
21.102
With in
Group
4.71
25
0.189
Total
Between Groups
71.017
66.817
28
3
22.272
With in
Group
4.60
25
0.188
71.417
28
the
the
Total
2.948
.169
2.835
.095
Factors
Sig. Groups
F1
F2
F3
F4
Df
Between Groups
Sum
of
Squares
56.601
Mean
Square
18.867
4.33
100
0.043
Total
Between Groups
60.931
59.600
103
3
19.866
4.44
100
0.044
Total
Between Groups
64.04
55.739
103
3
18.579
4.30
100
0.043
Total
Between Groups
60.039
60.863
103
3
20.287
4.50
100
0.045
Total
65.363
103
Sig.
4.967
.243
3.834
.087
2.966
.158
3.583
.176
Based on the significance table 3.9 and 3.10, the gained numbers indicate that the
significance of CRM have explained 95 percent of changes and proved insignificant at
106
5percent level indicating that the hypothesis H 01 is accepted which states that CRM is
significant for the banks and the hypothesis H 11 is rejected.
3.3.8 OVER ALL FACTOR STATUS
Table 3.11 indicates the overall status of the factors related to the significance of
CRM for banking industry in India with the combined view of executives and customers.
S.No.
1
2
3
4
Factors
Customer Loyalty and Trust
Customer Retention
Customer Satisfaction
Competitive Advantage
Mean
4.61
4.67
4.47
4.43
S.D.
.515
.504
.641
.565
**********
107