PARTICIPATION OF EMPLOYEES IN CUSTOMER RELATIONSHIP MARKETING: A CASE OF INDIAN BANKING SECTOR

Gagan Deep Sharma

Mandeep Mahendru

Nidhi Khanna

ABSTRACT
The way in which companies interact with their customers has changed dramatically over the past few years. Customers loyalty towards company is no longer guaranteed in this competitive environment. As a result, companies have found that they need to understand their customers better, and to quickly respond to their wants and needs and that also within shrinking time frame. They want to be proactive in their approach, where the problem starts; while the companies actually loose the customers through their sensitive approach. Today, there are many ways a customer can interact with a bank including via salesperson, web site, catalog, e-mail, trade show exhibit or advertisement. With today's technology, it's possible for each of these contact points to be driven from the same base of information about the customer. But the problem lies in the coordination of these technologies where sales force doesn't know about customers' interactions with the banks web site, call center doesn't know the customer was visited by a salesperson last week or the bank sends e-mail without consideration of recent catalog purchases. Consequently, the customer thinks that the banks activities are not coordinated. The requirement today is of integrated customer information architecture to support all these applications and thereby preventing coordination problems. The objective of this paper is to discuss about the need for integrated customer information architecture by segmenting and analyzing what the banks have and then serving the customer with right approach. But this is one of the challenging tasks. The challenge is to extract the necessary customer transaction data from these discrete applications and incorporate that data in our CRM-ready data warehouse. It is then that we have "closed the loop" and can truly attain one-to-one marketing relationships with our customers. Keywords: Competitive environment, customer loyalty, information architecture

Electronic copy available at: http://ssrn.com/abstract=1852467

I. INTRODUCTION:
Within turbulent, highly competitive marketplace, banks are finding it increasingly important to respond both quickly and effectively to changing patterns of customer demand. Who are banks customers and what are their needs and aspirations? If banks dont know the profitability by customer, how can banks be sure that they are serving their best customers and applying their value to all business decision? If banks had the means to do both, profits would soar. Not only would banks become more efficient, the shareholders would see an investment in their only real source of revenue, the customer, and the meaningful profits that result. With so few new revenue opportunities, do banks need more branches? Or instead should banks consider a customer relationship management program that uncovers and maintains shareholder value. Banks need to know and understand those customers who contribute the most to their bottom line. Banks in todays global marketplace are faced with increased competition and shirking profit margins. The challenge is sustaining and creating profits in the face of heavier competition and product homogenization. The opportunities are in managing customer relationships, controlling costs and applying customer profitability to the entire business. This paper begins to define, CRM and e-CRM; then identify the drivers for Banks to adapt e-CRM strategy; followed by studying the impact of CRM practices on banks dealings and discussion of Employees perception regarding implementation& effect of CRM in banks; finally, the researcher suggest a framework for the better CRM Practices in banks. Definition of CRM (Customer Relationship Management) First of all, it must be understood that at its core, CRM is more than just a set of technologies: it is a process. Simply stated, CRM comprises the acquisition and deployment of knowledge about customers to enable a company to sell more of their product and service more efficiently (Flanagan and Sadie, 1998). Providing customers with a good experience however and whenever they choose to contact you is a key part of managing relationships with them. Ovum defines customer relationship management (or CRM) as: A management approach that enables organizations to identify, attract and increase retention of profitable customers, by managing relationships with them. (Bradshaw, 2000).

Electronic copy available at: http://ssrn.com/abstract=1852467

Figure 1: Key Elements of CRM Architecture (Source: META Group) Business DriversWhy CRM There are three primary reasons why CRM has taken hold as rapidly as it has: 1. Competition is fierce; 2. The economics of customer retention are unequivocal; 3. Technology allows banks to do this more effectively and profitably today. Positive aspects of CRM in Banking Sector IMPROVING CUSTOMER SATISFACTION: Customers are also looking beyond a banks products to see whether the operation as a whole addresses their needs. They are willing to abandon established allegiances if their needs are not being met or if the services they require are available elsewhere at a lower cost. In addition to juggling a broader range of business lines, financial institutions must manage a longer customer-relationship life cycle. They must turn every customer transaction into a highly personalized, meaningful interaction and then forge these interactions into a firm relationship that prompts the customer to make additional purchases. This means continually reinforcing the value of their operations to both their customers and their business partners. Through targeted marketing, financial institutions can increase brand value and recognition. Today, banks must leverage the power of their brand while increasing its value in the face of new competition from traditional and nontraditional players. With proper branding a bank can enjoy: Increased market share as the positive value associated with the products and services and attracts more customers.

The ability to charge more for products and services because customers associate trust, reliability, and other positive attributes with companies that have brand-name recognition. The ability to test and launch new products because of the positive effect of brand awareness on customer acceptance.

ENHANCING PROFITABILITY: Of course, improving customer satisfaction is not enough. To stay competitive, financial institutions must also improve profitability. They must identify the areas of business that are most profitable and find the means to cross-sell and up-sell those business lines more effectively. With higher product penetration per customer, it becomes easier to draw a bigger share of the market. As more products are sold, profitability rises. As customers develop a deeper relationship with the company, customer retention increases further expanding market share. Frequently, however, banks lack the business intelligence to make key decisions in sales, marketing, or service. Banks must also overcome a range of technological hurdles, including systems for data collection that are highly fragmented and redundant. Operational information of an individual customer may be stored in several places by distribution channel, product, or company division and accessible only through those paths. Data may also be decentralized due to changes in company structure, a merger, or an acquisition. Besides having an incomplete picture of individual customers, marketing strategists and sales representatives may find it difficult to collect all data for the household in which a customer lives. In either case, the bank faces significant barriers for cross selling, up selling, and otherwise extending the customer life cycle. A well-integrated CRM solution that is truly synchronized with the Internet and enterprise applications, external customers, business partners, and suppliers can facilitate the compilation and analysis of data that empowers financial institutions sales force, customer support team, and supply chain partners. OPERATIONAL EXCELLENCE: To achieve operational excellence, a bank must integrate its sales and service functions across multiple channels that provide personalized portals for the banks customers and employees. From face-to-face contact to self-service web sites, they must capitalize on every communication opportunity. An effective CRM solution must, therefore, support all channels of customer interaction including telephone, fax, e-mail, the online portals, wireless devices, ATMs, and contacts with bank personnel. It must then link these customer touch points to an operations center and connect the operations center with the relevant internal and external business partners. With this capability, a banks employees can be alerted to significant customer events (such as a large deposit or a diminishing credit line) and be prompted to take the appropriate action. Every employee is armed with the appropriate knowledge and tools to focus on the key business goals of their business lines and grow assets under management. The CRM solution should also be able to track all aspects of the banks relationship with a

customer and give the customer consistency in that relationship. Ideally, a customer should be able to initiate a transaction though one channel, such as the operations center, and complete it through another, such as the banks Web site.

GOOD QUALITY PRODUCTS & SERVICES INCREASES CUSTOMER SATISFACTION IMPROVES REPUTATION OF BANK ENHANCES SALES REDUCES COST PER UNIT INCREASES PROFITABILITY ENHANCES MARKET SHARE
Fig: 2 POSITIVE ASPECTS OF CRM PRACTICES BENEFITS FOR CUSTOMERS Customers feel empowered if they have greater access to products and services e.g., 24-hour banking. There is a more coordinated and professional approach to customer contact. With up-to-date customer information, businesses can prepare more personalized services. Quick reaction to their problems. BENEFITS FOR EMPLOYEES Employees have more time to serve customers and fulfill orders. Employees are empowered with the information to deliver high quality service and meet customer expectations. Employees have higher satisfaction ratings. Managers are empowered with information that can help them manage customer relationships and make better decisions faster. BENEFITS FOR BANKS There is optimum use of resources.

Providing consistent personalized experiences increases customer satisfaction and loyalty. There is improved customer acquisition, retention, and cross-selling. Improved company image in the minds of the customers.

CRM Challenges The e-business capabilities of Banking addresses the key CRM challenges that face the banking industry today, including how to: Identify customers that have the most assets and would be the most profitable. Identify the most profitable products Cross-sell and up-sell products that are most relevant to a customers life stage and financial needs. Improve customer service while reducing service costs in basic areas, such as account inquiry, transfers, the trading of financial instruments, and cash management. Find strategies to eliminate current operational inefficiencies. Implement technology that leads to enhanced productivity of customers, partners and employees.

II. REVIEW OF LITERATURE

Banks basically sell variations of the same service, i.e. they lend money, accept deposits, and move money around. But in recent times price-led strategies are being increasingly used to provide more customized products and higher quality service not just to retain customers but also to attract new ones. This study shows how banks have done just that, through their Customer Relationship Management (CRM) initiative Ai Mier (April, 2007) confined that most commercial banks do not consider themselves as an agent providing service to customers where customers are clients who deserve to be served. It starts at the counter. Many people experience an average waiting time of more than an hour and this wait goes on whilst staff behind the counter proceed with their work at a slow pace and laughing and joking at the same time.. The bank is dealing with tens of thousands of customers at the counter every day; therefore the customer relationship management foundation should start from that point. That being said, to make the customer feel at home is a goal that is easier to talk about than actually execute. Next, lets review the status of the customer service center in a bank. To be honest, generally the telephone service is much better than counter service. Many commercial banks have installed national, uniform and advanced devices. Thirdly, how should a bank orientate the value-added services? This question stems from the 24-hour selfservices ATM machines that we can find in every street. Most banks have set up their own ATM networks. However, most people are concerned about whether they can withdraw or deposit the money they earned laboriously promptly at any place or any time. The success of CRM starts when the bank can meet the basic needs of its customers through more conveniently located ATMs and extended counter banking hours (e.g. after the normal work day or on public holidays). Fourthly, the orientation of additional

services provided by the bank. Hence, bill payments services should be a starting point for the bank to mine for / collect personal information, it can use this to establish a formidable database.. In a sense, the areas a bank should pay attention to are close to any customers heart. Eckenrode (Sep 2005) affirmed that the capability to integrate two or more delivery channels through shared technology has only recently been deployed in any significant way. Today, a handful of retail banks can boast of globally integrated delivery channels that are built on standard technology principles. These channels can, for example, deliver consistent balances regardless of the customers location because of the consistent architecture. IT managers within the bank, as well as business managers that rely on the delivery channels to service their products, know deep down that integrating the channels is the right thing to do because some benefits of channel integration are intuitive if not scientifically provable. The example of inconsistent account balance information is one that integrated delivery channels can solve and that most bankers agree is a source of frustration for the customer. Quantifying the effects of fixing this problem proves to be tricky, however. According to Frederick Reichheld (Resources, 1999), if the average company were to boost its rate of customer retention in life or auto insurance, for example, by just 5 per cent, it would realize an increase in customer profitability of more than 80 per cent in that line. This phenomenon is shifting the attention away from attracting new realized that as important as winning new customers, is retaining profitable customers. According to one expert, one should insurance life not just once, but every time one feels there is a change in his life profile. Business Online (Jan 2002) Too often it is the customer who is left out of the customer relations management (CRM) equation. Using financial services as an example, Michael Kelly 2002 decides that it is crucial to look at things from the customers perspective if CRM projects are to succeed. For the year 2000, industry analysts the Gartner Group calculated that 45 per cent of CRM projects failed. Of the top 10 reasons, it cited limited or no input from the customers perspective as being the fourth most serious contributing factor to failure. Too often boardroom members were saying, to their detriment, we already know what the customer wants, when they patently didnt. When devising and carrying through a CRM project, customer input is vital for success, for obvious enough reasons. So every CRM project should start with these simple questions. What is our strategy for dealing with customers? What are we trying to understand? What does the customer want? Customers want three things from their provider: value, convenience and want to be recognized and valued as an individual. According to Gartner Group, customers leave a company for a variety of reasons. Fourteen per cent move to competitors. Four per cent die. 68 per cent leave because of poor customer service.

Gartner Research (2005) concluded that 90% of CRM initiatives will balance the needs of improved customer experience with improved customer organizational collaboration. Today particularly for the industry best 3-C: Cooperation, Communication & Courtesy has changed from customer acquisition to retention. Gil (Dec, 2006) Customers and prospects are demanding more relevancy and personalization with their campaigns. If they dont recognize messaging or offers that are pertinent to their job function, your marketing goes directly to their trash bin. Unless you prove youre relevant to them, they wont care to hear your message or take action upon it. Harward Business Review Statistics (2002) unfolds that5% increase in retention can result in a bottom line profit increase of up to 75% depending upon the industry. The dramatic economic power of customer retention is revealed when viewing customers in terms of Life Time Value (LTV). The value of retaining customer makes perfect business sense when one considers that a customer retained for life is more cost effective, require less service, provides more business & contributes to new customer acquisition by offering positive referrals. Thus, customer retention guarantees significant current & future economic benefit. A study carried out on behalf of Indian Banking Association (IBA) on CRM (2000) concluded that customer retention is an issue that is being faced in foreign & new generation private sector banks. The study covered customers & employees of various banks. The study revealed that customer retention was strong among nationalized banks as compared to upcoming private and foreign banks although, the level of customer satisfaction was very high in upcoming private and foreign banks than in case of nationalized banks. Joshua & Moli (Sep 2005) evaluated that recognition of Service Quality, as a competitive weapon is relatively a recent phenomenon in the Indian Banking Sector. Prior to the liberalization era the banking sector in India was operating in a protected environment & was dominated by nationalized banks. Banks at that time did not feel the need to pay attention to the service quality issues & they assigned very low priority to identification & satisfaction of customer needs. After liberalization, the nationalized banks & the old generation private banks started facing competition from the new private & foreign banks that had international banking standards. These new generation banks were characterized by the usage of modern information technology endorsed services like ATM, tele-banking, online systems, etc. Lee (Nov. 2006) In the words of Dick Lee what remains to be proven is whether large and larger banks can actually make the transition to a more customer-centric state and I believe they can, if they go about it the right way? Heres a potential scenario:

First, the bank thats breaking ranks, which well call Customerbank, needs to research its markets to learnand accepthow customers want it to behave toward them. Based on this input, Customerbank should engage is serious planning to identify how to deliver new value to customers. Next, Customerbank should assemble a cross-functional team of its key managers and customer-contact staff to design the new work policies, workflow and information flow required to meet customer expectations and deliver new value to customersof course, deliver new value in ways that would deliver value back to Customerbank. Then, Customerbank should select two or three pilot branchesrather than the entire systemto test whether and how increased customer-centricity leads to increased profitability. Managers and employees of these branches would not only have their positions and incomes guaranteed, but also theyd receive a substantial bonus for participating in the test. Within these branches, Customerbank should train all customer-facing employees, including customer service center staff; in a relationship-building sales/service approach with heavy emphasis on customer needs identification. An essential component of this training is communicating and reinforcing the concept that without a legitimate customer need, there is no sales opportunity. And Customerbank should also redesign employee compensation plans to further motivate staff to do it the customers way. Further, Customerbank should empower test branch employees to flex on policies and even interest rates when mitigating circumstances occur (without taking undue risks or violating regulatory standards). Customers desperately want to interact with people who can help them, rather than puppets that recite rules. And finally, Customerbank should gauge the outcomes of new customer interactions with the bank. Properly implemented, a customer-centric approach to customers should increase, not decrease, profitability. Research conducted by Reichheld and Sasser (2002) in the Harvard Business Review, revealed: 5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance & 125% in the consumer credit card market. Therefore, banks are now stressing more on retaining customers & thereby increasing market share. Although it seems that increasing customer satisfaction will increase customer retention & therefore profits, the facts are contrary. Long-term relationships with customers are therefore more profitable as retaining existing customers prevents competitors from gaining market share. Loyal customers are likely to recommend products & services. It is hard to concentrate on acquisition quality when quantity is so much easier. Winning more & more customers could slowly put you out of the business.

Sharma & Nagpal (Mar, 2006) confined that in todays competitive scenario the biggest challenge for a bank is where it should look for customers for canvassing business. The manager generally tries out his contacts to meet the objectives. With the

growing focus on retail business to attract customers & handle competition, the need for setting up a well knit marketing function, has become crucial for the bank. They have the ultimate responsibility for creating new customers and retaining existing ones. Marketing Customer Information File (MCIF) can reduce the pain of the banks by providing readily available report for Direct Marketing & setting up a system of CRM (Customer Relationship Management). . Uppal & Rimpi (Feb 2007) acknowledged that after the introduction of the IT Act, Public Sector Banks are facing severe technological competition from their counterparts. In the present era it is not an option for the PSBs to adopt IT, rather it is a necessity for their survival. He suggested some of the strategies, which can be adopted to improve their working: Make the employees and customers aware & familiar with every aspect related to e-channels. Merge some branches to make them stronger & efficient with the implementation of IT infrastructure. Establish Computerization & introduce e-channels at the rural & semi-urban branches. Provide customer services at the cheapest rate to retain customers in this cutthroat competition. Formulate appropriate HRM policies to provide excellent working conditions to get best services by making their utilization optimum. Arrange training programs for the employees to make them more efficient for providing services through e-channels.

Studies have proved the worth of CRM in turning the customer service into customer sales. CRM works on the theme of retaining existing customers i.e. most businesses get customers but successful businesses keep them. Keeping customers happy is not just good public relations; its an essential part of sound business strategy.

III. RESEARCH METHODOLOGY:

Research methodology indicates the selection of sample respondents, collection of data, choice of statistical tools for analysis of data. Methodology adopted: The research is aimed at studying the CRM (Customer Relation Management) Practices followed by the public as well as private sector banks. The city covered under the research was Ludhiana. The major consideration of selecting this city for the study was that this city has huge population with relatively assured income and large number of banks. Data Collection Method:

In this study, sample survey was conducted; primary data was collected by structured questionnaires (Annexure), which solicit information about CRM practices practiced by banks and what type of facilities customers are receiving. Secondary Data was also collected from magazines, journals, Internet, newspapers, etc. Sample Plan: Sample unit: The study was limited to employees of public & private sector banks of Ludhiana city. Six banks were selected randomly, in which three were nationalized banks i.e.: State Bank Of India (SBI), Punjab National Bank (PNB) and Punjab & Sind Bank (PSB) whereas Centurian Bank Of Punjab(CBOP), HDFC Bank and ICICI Bank were selected in the private sector bank category for the study. Sample size: Since CRM practices are being used by the banks employees to attract, satisfy & retain the customers for maintaining long term relationships with them; for this present study 5 employees of each bank were randomly selected. Sampling technique: For conducting this study, convenience-sampling technique was used. As under this technique, sample of respondents was chosen according to the convenience. Data Analysis & Interpretation: After completing the study of questions asked from the respondents, data was tabulated by calculating the frequency of response & interpreted by using tables and percentage was calculated and conclusions were drawn there from. Charts were also drawn to present the data.

IV. FINDINGS:
Broadly speaking, the study revealed that CRM is gradually picking up and is definitely considered as a viable proposition by banks in improving services to their customers. One of the major challenges experienced during implementing CRM is resistance to change. To get CRM to work, high commitment is required in those who are implementing it. Exhibit 1 shows the perception of three types of employees, vis--vis, poor, average, excellent, towards the CRM.

Exhibit 1

A Summary of Employees Perception about CRM.!!

POOR
Unawareness of CRM concept to employees in nationalized banks. Considered as Time & Resource Wastage Tool. Reduce Profits as it increases cost of services. Not Required .Just like that!!

AVERAGE
Cost factor is taken into consideration without analyzing the benefits. Lack of proper communication to customers regarding its benefits. Customers are neither important nor unimportant.

EXCELLENT
Clear & complete understanding of customers needs. Positive staff attitude. Good after- sales services. Providing solution to customers problems. Consistent delivery of superior quality service.

Exhibit 2: Show the Respondents Working Experience With Banks (n = 30) Banks SBI PNB PSB CBOP HDFC ICICI Less Than 5Yrs 5 4 4 5-10 Yrs 3 1 1 1 1 10-20 Yrs 2 4 3 More Than 20 Yrs 1 TOTAL 5 5 5 5 5 5

Exhibit 2 shows that the employees in nationalized banks under study are working in their organizations for comparatively longer time span: ranging from 10 -20 years representing their experience as well as their satisfaction level while working with the bank; whereas, in case of private sector banks, most of the respondents have relatively worked for less than 5 years.

Exhibit 3 shows the view of the respondents about the concept of CRM. Banks Yes No Total 4 1 SBI 5 4 1 PNB 5 2 3 PSB 5 5 CBOP 5 5 HDFC 5 5 ICICI 5 Total 26 4 30 Exhibit 3 represents that all employees of private sector banks are in favor of CRM. However, for Public Sector Banks, few of the employees do not consider it as a valueadding concept. Exhibit 4 concentrates on showing the implementation of CRM in banks. (n = 30) Banks Yes No Total SBI 4 1 5 PNB 3 2 5 PSB 1 4 5 CBOP 5 0 5 HDFC 5 0 5 ICICI 5 0 5 Total 23 7 30 %age of respondents 76.67 23.33 100 Exhibit 4 presents the actual implementation of CRM Practices in banks. It shows that employees of private sector banks are completely devoted not only in identifying the customers needs; rather they are providing the same to enjoy the benefits there from. So far as nationalized banks are concerned, even they are moving in the same direction, but they are not 100% into it. Exhibit 5 shows various CRM practices adopted by banks to retain their customers and simultaneously attract the new ones. (n = 23)

Easy Installments

Intimation

Act as Counselor

SBI PNB PSB CBOP HDFC ICICI TOTAL % of Resp

2 2 2 4 1 2 3 1 1 2 3 1 3 2 0 1 0 1 1 1 1 3 3 4 5 3 3 4 3 4 5 5 3 4 4 3 3 5 5 3 4 5 12 14 18 23 12 19 19 52.1 60.86 78.2 100 52.1 82.6 82.6 7 6 Exhibit 5 Facility of ATMs provided by banks is on top of the list of CRM practices as it results not only in reducing Tellers time in the office, but it is also convenient to the customers, as they can withdraw money anytime and anywhere they feel like. Other facilities rated by the employees in decreasing order of their importance include: Time to time information sent to the customers regarding new schemes or offers. Acting as a guide to help solve their problems. Provision of free of cost monthly or quarterly statements. Provision of 24 Hour service via Net Banking, Phone Banking, etc. Facilitating easy installments, thereby extending loan facility Guidance on Tax Planning. Constant reminders of matured FDs. Provision of some more facilities like: - Easy Bill Payments - Investment in securities - Credit Management Some employees in the nationalized banks were of the different opinion. They said they dont have ample time to entertain the customers. Since, their schedule is very busy with limited time, another employee specifically recruited for this purpose must handle all these activities. Exhibit 6 shows the reason given by the employees for the implementation of CRM practices. (n = 23)

4 3 1 5 5 5 23 100

2 1 1 4 5 4 17 73.9

3 3 1 4 4 5 20 86.9

Door Step services

Reminder of FD's

Solving Problems

Banks

Free of Cost statement

24 Hr Services

Tax Saving

ATM

Banks SBI PNB PSB CBOP HDFC ICICI Total % of Resp

Retain Customers 4 3 1 5 5 5 23 100

Brand Image 4 2 1 3 4 4 18 78.26

Counter Competition 3 3 0 4 4 5 19 82.6 Exhibit 6

Increase Profits 3 3 1 5 5 5 22 95.65

Promote Products 2 2 1 4 3 3 15 65.21

The exhibit depicts that the main motive of implementing CRM Practices in banks is retaining their old customers as well as attracting new ones and thereby reaching their ultimate goal of increasing the level of profits. This concept is also considered as a strategy to counter ever increasing fierce competition as well as a tool for improving the companys image. Exhibit 7 visualizes the employees opinion about whether to continue or discontinue the CRM implementation in banks. (n = 23) BANKS YES NO 4 0 SBI 3 0 PNB 1 0 PSB 5 0 CBOP 5 0 HDFC 5 0 ICICI 23 0 TOTAL %age of Resp 100 0 Exhibit 7 All the employees who are completely aware of CRM Practices and the benefits derived through its appropriate implementation are in favor of continuance of the same. This is so because; they are quite satisfied with its implementation. The organizations have been able to increase their customer base due to the provision of extra facilities or add on services to the customers merely on having an account with them.

Exhibit 8 depicts the views of employees not in favor of CRM implementation regarding why not to implement CRM practices.(n = 7)

SBI PNB PSB CBOP HDFC ICICI TOTAL

1 2 4 0 0 0 7

1 1 1 2 3 4 0 0 0 0 0 0 5 7 Exhibit 8

1 1 1 0 0 0 3

1 2 4 0 0 0 7

0 0 0 0 0 0 0

Exhibit 8 represents that all banks whether private or public give due importance to their customers. The difference lies only in the provision of extra services or facility via using Information Technology. Private sector banks are cent percent involved in its provision. Even the public sector banks have started with it and are on its early stages. Some of the identified reasons for the negligence on the part of public sector banks include: Unawareness of the concept. Simply not required (without any reason to justify this statement). Wastage of time & resources. Useless concept as the banks is already achieving the targets. Resistance to change. Complexity in its operations. Already working efficiently. Increases costs with comparatively lesser benefits. Lead to unemployment. Deviating from the main goal of banks: deposits & loans management. Serving best to the illiterate (uneducated) population who dont need those (extra) services. Employees are quite experienced & satisfied by adopting simple & easy to handle method of working and hence, do not require any kind of change.

The above-mentioned points are the beliefs of the respondents which may be a myth or simply resistance to change to what they have been doing long since they were employed.

Customers not important

Not so popular

Time Wastage

Banks Unawareness

Not Required

Useless

In Exhibit 9, we present the employees opinion about implementation of CRM in future. (n = 7) BANKS SBI PNB PSB CBOP HDFC ICICI TOTAL YES 1 2 3 0 0 0 6 Exhibit 9 When the employees were enquired whether they would like to implement CRM practices in their banks in near future most of them confirmed, except one respondent. He declared that he is already completing his tasks very efficiently and is achieving the set targets every time. CRM is merely wastage of time, efforts and most important increases cost. He further added that, if ever these practices are introduced here, there must be a separate department; may be a care cell, as in private banks who will be responsible for the same. Exhibit 10 presents the satisfaction level of Employees while implementing CRM practices. (n = 30) BANKS Satisfied Indifferent Dissatisfied Total 4 1 0 5 SBI 3 1 1 5 PNB 1 2 2 5 PSB 5 0 0 5 CBOP 5 0 0 5 HDFC 5 0 0 5 ICICI Total 23 4 3 30 % of Respts 76.67 13.33 10 100 Exhibit 10 Employees in the private sector banks are satisfied with the CRM practices adopted by them. It is because they are extracting monetary as well as non monetary gains in the form of goodwill of the bank, which further increases their own worth. In case of nationalized banks, employees of SBI are also quite satisfied. But, due to vague definition of CRM in the minds of some respondents, they are dissatisfied or indifferent towards it. NO 0 0 1 0 0 0 1

Taking cue from Exhibit 10, we wanted to analyze the reasons from dissatisfied employees (3 in number). Exhibit 11 explains the reasons for dissatisfaction among employees while implementing CRM. Exhibit 11: Reasons for Dissatisfied Employees while implementing CRM (n = 3) Decreasing Customers Decreasing faith Increased Costs 1 2 3 5 4 5 3 3 2 22 95.65 Bank Office BANKS Dissatisfied Customers

Reduced Profits

PNB PSB Total

1 1 2

1 2 3

0 0 0

0 1 1

0 0 2

When questioned as to what is the reason for their dissatisfaction, they pointed towards the increased Costs of the banks if compared to its benefits. They added that if the same are transferred on the shoulders of the customers, they switch over to other banks; which further hampers banks business. In Exhibit 12, we show the feedback system of banks for deploying CRM practices. (n=23) Customer Care Cell 2 1 1 3 4 4 15 65.21 Agencies Banks Profit Sales Of

SBI PNB PSB CBOP HDFC ICICI Total %age of Resp

5 4 4 3 2 3 21 91.3

4 3 4 2 2 3 18 78.26

2 1 1 4 5 5 18 78.26

Word Mouth

0 0 0 0 1 1 2 8.69

The Exhibit states that banks normally evaluate their performance on the basis of their sales target achievement, thereby indicating a positive sign of their business. Furthermore, nationalized banks collect the data within their premises by interacting with their customers whereas private sector banks derive such results through their customer care cell or through word of mouth publicity. Independent agencies are not hired for this purpose as stated by one of the respondents.

Harm Image

Exhibit 13 presents the views of employees about handling the dissatisfied customers. (n = 30) Customers as Assets 5 4 5 5 5 5 29 96.7 Door Step Services 4 3 3 5 5 4 24 80 Customized Services 2 3 2 4 5 4 20 66.7 Explaining Benefits 2 1 3 2 0 1 7 23.3 Discussion 5 5 4 4 5 5 28 93.3 Providing Solutions 5 3 5 5 5 5 28 93.3

Banks SBI PNB PSB CBOP HDFC ICICI TOTAL %age of Resp

The employees opine that in order to handle the dissatisfied customers, banks have to take a lot of steps. The first & the foremost thing is the consideration of customer as an asset for the organization. Discussing the reasons for their dissatisfaction and providing them solutions for the same can achieve this. Moreover, the level of services must also be increased. IV. SUGGESTIONS: In order to gain full value from their customer relation management technology and processes, banks should apply segmentation and analytics to their service delivery strategies. Moreover, they must implement front-end applications that optimize these strategies. The target can be achieved only if bank leverages customer knowledge during every phase of customer interaction by providing pro-active personal service and implement targeted selling in all of their delivery channels - branches, online banking, call centers, and ATMs.

To satisfy your customers following suggestions emerge from the study: 1. Nationalized Banks must educate and train their employees about the CRM Practices already adopted by the private sector banks & benefits derived there from. 2. CRM solution must involve the participation of each & every employee of the bank; irrespective of his/ her department & designation. It is not the job of single individual, rather ir requires team effort. 3. All employees of the bank must interact with customers so that they can get first hand feedback (about their level of satisfaction derived on consumption of banks products & services). 4. Banks must ensure that every customer interaction is considered as an opportunity to retain a valued customer, increase revenue, build loyalty or strengthen a brand. 5. They must look to CRM solutions as helping the employees/ organizations to connect with customers, anticipate customer needs and deliver them the products and services to meet their satisfaction level. 6. Good customer relations can be maintained with the provision of latest facilities which matches with the ever changing needs of the customers. Hence, its the need of the hour to supply what is being demanded. 7. The CRM practices that are implemented in the bank must leverage the banks existing systems without having to replace whats already working. This helps in meeting your business needs by providing targeted solutions that enhance the customer insight, improve retention, increase cross-sell revenue, maximize call center effectiveness and boost overall customer profitability.

8. CRM practices must be viewed as a tool of conitnuous improvement even if the bank is already achieving its targets. 9. Employees should not only hear to the customers problems, but they must try to provide solutions to their problems at the earliest. 10. Provision of door step services must be increased, to maintian & widen the customer base. 11. Banks should employ new technology as the rapid growth of Internet based techniques have helped in the establishment of one to one relationship with the customers online. 12. New products or services must be launched keeping in mind the changing needs & expectations of the customers. 13. Cost of implementing CRM strategies nust be evaluated by the banks while taking into account their profitability in the long run & not keen on earning short run profits. 14. Focus on one mindset change - improving banks service culture is the critical success factor in developing service industry. 15. Banks must follow 3 step formula to achieve the best results:

16. At all times provoke suggestions from the customers as no one else can better put in the picture their actual needs & expectations. It is because all three parties companies, service staff and customers - have a role to play in improving service. 17. Companies must show leadership and adopt service friendly policies, systems and processes 18. Emphasize service training for all employees - not just for frontline workers, but also managers and supervisors. Management must walk the talk. 19. This new technology is transforming the skill structure in banking. Hence, in this fast changing scenario, new competencies required by banks employees include:

CHANGING COMPETENCIES Old Competencies New Competencies Ability to operate in well defined and Ability to operative in ill-defined and stable environment ever changing environment. Capacity to deal with repetitive straight-forward and concrete work process Ability to operate in a supervised work environment Isolated work Capacity to deal with routine and abstract work process Ability to handle responsibilities decisions and

Group work, Interactive work

Ability to operative within narrow System-wide understanding, ability to geographical and time horizons operative within expanding geographical and time horizons Broad unspecified knowledge Specialized knowledge Procedural competencies Customer assistance competencies. oriented

Source: Human Resource Management in Banks Contemporary Issues by Dr. Jacob Mankidy

VI. CONCLUSION: Customers are the lifeblood of the business and that the way to protect and grow its customer base - and ultimately its profitability - is to build strong customer relationships through delivery of superior quality service and to meet customer needs better than the competition. The CRM approach focuses on maximising value for the customer and the bank. The analysis of the study on the use of CRM Practices in Banks reveal: 1. Research has shown that the key drivers of maintaining good relationships with customers are: POSITIVE STAFF ATTITUDE SIMPLICITY & EASE OF DOING BUSINESS HONESTY, INTEGRITY AND RELIABILITY GOOD AFTER-SALES SERVICE
PROACTIVE ADVICE CONSISTENT DELIVERY QUALITY SERVICE OF SUPERIOR DELIVERY OF PROMISE A FAIR AND EFFICIENT RESOLUTION POLICY COMPLAINTS

2. Although private sector banks are attracting the major chunk of society by its provision of CRM practices, nationalized banks are also following them.

3. Most commonly used CRM practices implemented in most of the banks include: ATM facility, Intimation to customers about new products, solving problems, 24-hour services, etc. 4. Banks employees admitted that CRM Practices helped them in retaining the customers, & thereby increasing profitability. Due to attainment of their motives they prefer to continue with the same practices & also upgrade them. 5. Some employees of nationalized banks were unaware of this concept & hence considered them as merely wastage of time & resources. 6. More than of the respondents (77%) were satisfied with the implementation of these practices, 10% are dissatisfied & 13% are indifferent towards it. 7. Dissatisfied employees evaluated the system negatively due to cost considerations (costs incurred is more than the benefits derived). 8. Banks try to satisfy their dissatisfied customers by discussing with them the reasons for the same & simultaneously providing solutions. 9. Gradually, banks are moving away from the Traditional Approach of Sellers Market to the Modern Approach of Buyers Market. 10. Due to changing scenario, banks are adopting various strategies to overcome the hurdles of increased level of competition, customer dissatisfaction, constantly changing customer needs, etc. Some of these incorporate: Setting the Goals or Purpose Identification of Customer Groups Defining their needs Differentiation of CRM practices Technology has been a major driving factor for CRM and therefore, is bringing radical changes. The need of the hour is uninterrupted dialogue with customer about product selection, product use, product enhancement and product replacement. The developments in several technological areas are likely to have a major impact on CRM. Some of the areas are: e- CRM, Digital signatures, Biometric sensing & M- commerce. So the need here is to adopt these technologies as early as possible so to become the movers in the business. This encompasses not only in developing long term relationships with the customers but also increases profitability over a lifetime on the one hand and increased shareholders wealth on the other hand.

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