ContentPg no.

THE HISTORY OF CRM3

INTRODUCTION6

CUSTOMER RELATIONSHIP MANAGEMENT7

CRM & BANKS10

NEED OF CRM IN BANKS12

BENEFITS OF CRM17

CHALLENGES FACED BY BANKS IN SUCCESSFUL IMPLEMENTATION OF CRM22

CRM PRINCIPLES23

TYPES OF CUSTOMER RELATIONSHIP MANAGEMENT TOOLS27

EFFECTIVE CRM IMPLEMENTATION29

TRENDS IN CRM IN BANKS30

FINDINGS32

CRM AT ICICI BANK34

SUGGESTION38

CONCLUSION40

BIBILOGRAPHY41

ABSTRACTThe prime objective of the research work is to develop a framework for Customer Relationship Management (CRM), applicable to Indian retail banks and to analyze the influence of service quality on customer behavior with respective to retail banks. The results of the research study reveal that there appears to be lack of awareness with the bank employees as well as adoption of CRM packages available in the market. It is suggested that the successful implementation of CRM package can be achieved only if the bank can create the right environment, culture and attitude of the employee aiming to serve the customers in the best possible manner.Customers are the focal point in the development of successful marketing strategy. Marketing strategies both influence and are influenced by consumers affect and cognition, behaviour and environment. In the banking field a unique Relationship exists between the customers and the bank. But because of various reasons and apprehensions like financial burdens, risk of failure, marketing inertia etc., many banks are still following the traditional ways of marketing and only few banks are making attempts to adapt CRM. It is with this background, the researcher has made a modest attempt towards the idea that CRM can be adapted uniformly in the banking industry for betterment of Banking Services. The lack of understanding on Customer Relationship Management (CRM) is always a concern among the service providers especially banks. Banks have their own way of managing their relationships with the customers.

THE HISTORY OF CRMCustomer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them.While Customer Relationship Management (CRM) can be traced back to the 1980's, the actual term did not come about until the 1990's. One reason that drove the CRM software boom in the 90's was the explosion of technology. As advancements in different database features came about, it paved the way for early CRM adopters to truly improve the CRM software and make it more effective for customers. Some of the earliest companies to really embrace this and invest in the use of CRM software were the banking and telecommunications industry, as so much of their business was customer-related. For them, this was the easiest way to do it. This eventually led to other industries of all shapes and sizes, to get involved in CRM software.In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the price of newer, more customizable Internet solutions have hit the marketplace; competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs.In the beginningThe 1980s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a companys customers.In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didnt provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do.Advances in the 1990sIn the 1990s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty.This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service.True CRM comes of ageReal Customer Relationship Management as its thought of today really began in earnest in the early years of this century. As software companies began releasing newer, more advanced solutions that were customizable across industries, it became feasible to really use the information in a dynamic way.Instead of feeding information into a static database for future reference, CRM became a way to continuously update understanding of customer needs and behavior. Branching of information, sub-folders, and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics, but information on the motivation and reactions of customers.The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage. Where before companies had difficulty supporting the enormous amounts of information, the Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions. With the increased fluidity of these programs came a less rigid relationship between sales, customer service and marketing. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product.Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology. The three sectors of business that rely most heavily on CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations and the telecommunications industry.The financial services industry in particular tracks the level of client satisfaction and what customers are looking for in terms of changes and personalized features. They also track changes in investment habits and spending patterns as the economy shifts. Software specific to the industry can give financial service providers truly impressive feedback in these areas.1980sDatabase marketing emerges

Database helped larger organizations rather than small who only got survey type info

1990sCRM appears as a two-way communication device

CRM leads to programs such as frequent flyer miles and bonus points on credit cards

2000sInternet has helped expand from stagnant database and allows off-site information storage

Used most frequently in financial services, high tech corporations and the telecommunications industry

INTRODUCTION

The traditional mode of marketing mainly focused on segmenting and acquiring new customers by using tools and techniques developed for mass marketing. In the present competitive era, this proves vain. Today there are different approaches to business such as relationship marketing, customer retention and cross-selling leading to customer extension, which is a far cry from the traditional segmentation model. The relative and marked emergence of CRM as a business strategy has radically transformed the way organizations operate. The shift in business focus from transactional to relationship marketing keeps the customer at the Centre of all business activities. Organizations are trying to restructure their processes to meet the needs of their strategically significant customers. The critical driver of such a dramatic shift towards customer orientation is the realization that customers are business assets and when managed effectively they can derive continuous and sustainable economic value for an organization over their lifetime. The dynamics of the banking ecosystem have changed the business format of retail banks both in relationship management and in streamlining their operations.Relationship marketing or customer relationship management has been emerging as a core marketing activity for businesses in the fiercely competitive environment. On an average, companies spend six times more to acquire new customers than to retain them. Therefore, many firms are now paying more attention to their relationships with existing customers to retain them and to increase their share of customer purchases. In order to improve the relations with the customers, todays Retail Banking comprehensively concentrates on the quality of the products and the services offered to the customer, as it is the basic foundation for maintaining and developing long-term relations with the customer. Offering quality products and services is not only essential to develop long-term customer relations, but is also essential to improve marketing productivity and long run profits and growth. In sum, managing customers today has turned into a well formulated and well-studied science and art known as Customer Relationship Management (or) CRM.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Definition According to Business DictionaryA management philosophy according to which a companys goals can be best achieved through identification and satisfaction of the customers' stated and unstated needs and wants.

Definition According to Business Dictionary Investopedia The principles, practices, and guidelines that an organization follows when interacting with its customers. From the organization's point of view, this entire relationship not only encompasses the direct interaction aspect, such as sales and/or service related processes, but also in the forecasting and analysis of customer trends and behaviors, which ultimately serve to enhance the customer's overall experience.MEANING OF CRM Customer Relationship Management is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business processes. At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved in the business process. It is about creating a sustainable competitive advantage by being the best at understanding, communicating, and delivering, and developing existing customer relationships in addition to creating and keeping new customers.Traditional MarketingCRM

Goal: Expand customer base, increase market share by mass marketingGoal: Establish a profitable, long-term, one-to-one relationship with customers; understanding their needs, preferences, expectations

Product oriented viewCustomer oriented view

Mass marketing / mass productionMass customization, one-to-one marketing

Standardization of customer needsCustomer-supplier relationship

Transactional relationshipRelational approach

Customer relationship management helps in profiling prospects, understanding their needs, and in building relationships with them by providing the most suitable products and enhanced customer service. It integrates back and front office systems to create a database of customer contacts, purchases, and technical support, among other things. This database helps the company in presenting a unified face to its customers, and improves the quality of the relationship, while enabling customers to manage some information on their own.

Customer relationship management is one of the strategies to manage customer as it focuses on understanding customers as individuals instead of as part of a group. Managing customer relationships is important and valuable to the business. The effective relationship between customers and banks depends on the understanding of the different needs of customers at different stages. The ability of banks to respond towards the customers needs make the customers feel like a valuable individual rather than just part of a large number of customers. CRM manages the relationships between a firm and its customers. Managing customer relationships requires managing customer knowledge. CRM and knowledge management are directed towards improving and continuously delivering good services to customers. To understand more in customer relationship management, we first need to understand three components which are customer, relationship and their management. More often, managers always make mistakes by seeing customers satisfaction from their eye not from customers eye CRM & BANKSToday, customers have more power in deciding their bank of choice. Consequently, keeping existing customers, as well as attracting new ones, is a critical concern for banks. Customer satisfaction is an important variable in evaluation and control in a bank marketing management. Poor customer satisfaction will lead to a decline in customer loyalty, and given the extended offerings from the competitors, customers can easily switch banks. Banks need to leverage effectively on their customer relationships and make better use of customer information across the institution.Competition in the financial services industry has intensified in recent years, owing to events such as technology changes and financial industry deregulation. Conventional banking distribution has been gradually supplemented by the emerging use of electronic banking. Many bank customers prefer using ATMs or a website rather than visiting a branch, while technology has also reduced barriers to entry for new customers.CRM IN BANKING SECTORBanking sector is a customer-oriented service where the customer is the KEY focus. Research is needed in such sector to understand customers need and attitude so as to build a long relationship with them. Customer Relationship Management includes all the marketing activities, which are designed to establish, develop, maintain, and sustain a successful relationship with the target customers. CRM identifies the present and future markets, selects the markets to serve and identifies the progress of existing and new services. Thus, CRM is a managerial philosophy that seeks to build long term relationships with customers. CRM can be defined as the development and maintenance of mutually beneficial long-term relationships with strategically significant customers It is the establishment, development, maintenance and optimization of long term mutually valuable relationships between consumers and the organizations. Successful customer relationship management focuses on understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organizations strategy, people, technology and business processes. Over the last few decades, technical evolution has highly affected the banking industry. For more than 200 years, banks were using branch based operations. Since the 1980s, things have been really changing with the advent of multiple technologies and applications. Different organizations got affected from this revolution; the banking industry is one of it .In this technology revolution, technology based remote access delivery channels and payment systems surfacedATM displaced cashier tellers, telephone represented by call centers replaced the bank branch, internet replaced the mail, credit cards and electronic cash replaced traditional cash transactions, and interactive television will replace face-to-face transactions. In recent years, banks have moved towards marketing orientation and the adoption of relationship banking principles. The key motivators for embracing marketing principles were the competitive pressure that arose from the deregulation of the financial services market particularly in India. This essentially exposed clearing banks and the retail banking market to increased competition and led to a blurring of boundaries in many traditional product markets. The bank would need a complete view of its customers across the various systems that contain their data. If the bank could track customer behaviour, executives can have a better understanding, a predicative future behaviour and customer preferences. The data and applications can help the bank to manage its customer relationship to continue to grow and evolve .Most sectors of the financial services industry are trying to use CRM techniques to achieve a variety of outcomes. In the area of strategy, they are trying to Create consumer-centric culture and organization Secure customer relationships; Maximize customer profitability; Integrate communications and supplier customer interactions across channels; Identify sales prospects and opportunities; Support cross and up-selling initiatives; Manage customer value by developing propositions aimed at different customer segments; Support channel management, pricing and migration.

CRM is a sound business strategy to identify the banks most profitable customers and prospects, and devotes time and attention to expanding account relationship with those customers through individualized marketing, reprising, discretionary decision making, and customized service through the various sales channels that the bank uses. Any financial institution seeking to adopt a customer relationship model should consider six key business requirements they are: Create a customer-focused organisation and infrastructure. Gaining accurate picture of customer categories. Assess the lifetime value of customers. Maximise the profitability of each customer relationship. Understand how to attract and keep the best customers. Maximise rate of return on marketing campaigns.

CRM is developing into a major element of corporate strategy for many organisations .A greater focus on CRM is the only way the banking industry can protect its market share and boost growth. With intensifying competition, declining market share, deregulations, smarter and more demanding customers, there is competition between the banks to attain a competitive advantage over one another or for sustaining the survival in competition. In India, the banking sector has been operating in a very stable environment from last thirty -forty years. In current scenario of banking sector, the falling of interest rates and tough competition between these players had made Indian bankers to realise that the purpose of their business is to create and retain a customer and to see that the entire business process is consistent with an integrated effort to discover, retain and satisfy customer needs. But the success of' CRM Strategy depends upon its ability to understand the needs of the customer and to integrate them with the organisation's strategy, people, technology and business process. Financial services are in a structural change whereby competition and customer demands are increasing.NEED OF CRM IN BANKS 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 sector over 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 theirclient 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.OBJECTIVES OF CRM IN BANKSCRM, the technology, along with human resources of the banks, enables the banks to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer, relationship, and the management of relationship and the main objectives to implement CRM in the business strategy are: To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively

Customer retention: Knowing and understanding that some customers have left the company and knowing specifically who has left is even more important, and also knowing why these customers left is not an easy task at all. The more customers leave, the revenue to the company decreases and hence the greater the loss of revenue. It is also difficult to encourage customers to stay, but this is done base on the assumption that, keeping an existing customer is far more cost effective than acquiring a new one

Cross-selling and up-selling: Cross-selling and up selling is trying to know which products can increase, rather than decrease a customers total profitability. Cross-selling is selling a product to a customer base on another purchase the customer has already done. Up-selling is also defined as motivating an existing customer to trade up to more profitable products. Because of the assumption that selling more services to an existing customer is less costly and also increases revenue, it has become very common these days. Cross-selling helps companies to sell the right product to the right customer at the right time. The desire of many companies to do the cross- selling has made the automation of CRM marketing technologies very popular

Behavior Prediction: This helps organizations to determine the next thing customers will do in the future. Data mining techniques are used for behavior prediction based on the customers history to foresee customers future behavior. By understanding the next action a customer will take, the organization can make so many marketing decisions based on that. The key to this is to help you to actually know who your best customers are

Personalization: This is the ability of a company to personalize or customize communication, products and services base on knowledge, behavior and preferences at the interaction time. Personalization technologies can apply their learnings to future personalized messages. This helps to remove the guesswork, resulting in a creeping understanding of customers and their preferences over that customers relation with your company. Personalization on a business to customers (B2C) website is largely based on the analysis of a customers click streams, his or her navigation path through a companys website.

CRM, the technology, along with human resources of the banks, enables the banks to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer, relationship, and the management of relationship and the main objectives to implement CRM in the business strategy are: To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively The CRM processes should fully support the basic steps of customer life cycle. The basic steps are:Attracting present and new customers Acquiring new customers Serving the customers Finally, retaining the customers

In today's increasingly competitive environment, maximizing organic growth through sales momentum has become a priority for Banks and Financial institutions. To build this momentum banks are focusing on Customer relationship management initiatives to improveCustomer satisfaction and loyalty Customer insight/ 360 view of customer Speed to market for products and serviceIncrease products-to-customer ratio Improve up sales and cross sales Capitalizing on New market opportunities

The idea of CRM is that it helps businesses use technology and human resources gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can: provide better customer service, make call centers more efficient , cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues .It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information.

For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used.

One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed.

In CRM projects, following data should be collected to run process engine: 1) Responses to campaigns, 2) Shipping and fulfillment dates, 3) Sales and purchase data, 4) Account information, 5) Web registration data, 6) Service and support records, 7) Demographic data, 8) Web sales data.

BENEFITS OF CRM

Higher customer retention and loyalty: The customer retention will increase when Customers stay longer, buy more and buy more frequently. The customers take more initiatives that increase bounding relationship, and as a result the customer loyalty increases. Increased customer profitability: The customer profitability will increase when the customer wallet-share increases, the up-selling goes up as well as cross-selling and follow up sales and also more referrals come with higher customer satisfaction among existing customers. Lower cost of recruiting customers: When the cost of recruiting new customers reduce or go down, there will be savings to be made on marketing, mailing, contact, follow-up, fulfilling, service and many more. CRM Banking Focuses on the Customer :CRM manages to places the customer at the focal point of the organization in order to cater to his needs, satisfy him and thus maximize the profits of the organization. Banking CRM understands the needs of the customer and integrates it with people, technology, resources and business processes. It focuses on the existing data available in the organization and uses it to improve its relationship with customers. Banking CRM uses information and analytical tools to secure customer focus. Thus it is completely essential that banks implement CRM in order to secure this. Overall Profitability :CRM enables banks to give employee's better training that helps them face customers easily. It achieves better infrastructure and ultimately contributes to better overall performance. The byproducts of CRM banking solutions are customer acquisition, retention and profitability. Banks that don't implement CRM will undoubtedly find themselves with lesser profitability coupled with a sharp decline in the number of customers. Satisfied Customers: It is important to make a customer feel as if he / she is the only one - this will go a long way in satisfying and retaining them. Bankers need a return on investment and it has been proved that increase in customer satisfaction more than contributes a fair share to ROI. The main value of CRM banking lies in satisfaction and increased retention of customers. Centralized Information :CRM banking solutions manage to clearly integrate people, processes and technology. CRM banking provides banks with a holistic view of all bank transactions and customer information as well and stores it in a single data warehouse where it can be studied later. CRM Banking Boosts Small Banks: Banking CRM software meets the needs of banks of all sizes in terms of attaining the required accuracy and understanding of customers. Merely assuming that banks that are considerably smaller in size have a better customer approach and are able to deal with their customers in a better manner is wrong. They are just as much in need of CRM aid as the others. Small banks on account of a limited amount of money have had to realize that a large contribution to profits is directly the result of good customer service. CRM makes sure that the bank delivers exactly what the customer expects. Customer Segregation :CRM enables a bank to see which customers are costing them and which are bringing benefits. CRM provides them with the required analytical tools that will help them focus on the importance of segregating these two and doing what is required to avail of the maximum returns. After this segregation is done CRM easily enables banks to increase their communication and cross-selling to their customers effectively and efficiently. Aggressive Customer Acquisition: CRM solution supports the creation of demand generation through multi-channel and multi-wave campaigns. The solution ensures the banks marketing message is appropriately personalized and targeted towards the most suitable segment of prospects. This optimizes marketing efforts and results in greater conversion of prospects Improved Cross-sell Framework: The solution presents a unified 360 view of the customer, allowing single point access to all the relationships the customer has forged with the bank. This along with robust customer analytics effectively supports true relationship banking, providing a robust framework for cross-sell opportunities. CRM solution also integrates with other white labeled solutions to facilitate contextual and personalized customer engagement, with a keen focus on right-talk driven right-sell. Increased Operational Efficiencies and Collaboration: CRM solution supports business automation for processes and business activities, eliminating manual tasks and reducing process time. Straight through processing abilities enhance reduction in turnaround and processing time, increasing output and enabling speedy completion of tasks. The multilingual Web-based single repository of information enables remotely located bankers to collaborate and transact seamlessly. Lower Total Cost of Ownership (TCO):A Web-based solution leveraging new-generation technologies, CRM solution is future-proof and can be seamlessly integrated with other enterprise applications. With a robust architecture and proven scalability, it ensures protection for the banks technology investments Customer Information Consolidation: Instead of customer information being stored in product centric silos, (for e.g. separate databases of savings account & credit card customers), with CRM the information is stored in a customer centric manner covering all the products of the bank. CRM integrates various channels to deliver a host of services to customers, while aiding the functioning of the bank.INTANGIBLE BENEFITS

Overall smoother functioning within your company : To determine this benefit, consider measuring the time spent looking for needed information versus time spent utilizing information and getting on with your job. It can be shocking to learn how much time is spent by sales personnel on unnecessary administrative matters, or the amount of time a new sales person spends getting up to speed in a new territory! Increased employee motivation and satisfaction : While this may be difficult to measure, consider measuring feedback from those employees who use CRM. An alternative measurement is employee turnover rate for those personnel who use the CRM system. Better trained and more skillful sales, marketing and customer service personnel CRM can provide an excellent training ground for personnel to quietly spend time learning facts and figures about your products and services. To determine this benefit, consider measuring the ability of sales personnel to quickly access needed facts and figures, including the implementation of required sales and business procedures. Improved use of mobile access devices This benefit is important given that each of us have a different technology assimilation learning curve that impacts our future use of equipment and technology. To determine this benefit, consider measuring the comfort level over time of field personnel who use the mobile devices

More up-to-date information and easy access to this information: Up-to-date information and easy access are subjective measurements made by end-users. To determine this benefit, therefore, consider measuring the timeliness of needed information and the ease of accessing this information based on end-use standards. Improved responsiveness to customer and prospect requests : Link a go to person manager, sales representative or customer service representative) to each customer request and work until the request gets resolved. To determine this benefit, which may be tied in with customer service, consider measuring the time it takes to respond completely to a customer or a prospect request. Improved image of your company : Automation can play a leading role in building your companys image in the eyes of your customers. To determine this benefit, consider measuring the reaction of existing and future buyers to your sales and marketing professionalism. The ability to differentiate your company from the competition: It should be noted that many studies have tried or are trying to measure the competitive advantage resulting from CRM. Consider measuring the increased customer loyalty as well as customer perception of your company versus the competition. Support for organizational change(s) with your firm: To determine this benefit, consider measuring the time lost training new sales and marketing personnel. Improved understanding and better control over expenses: CRM can assist in this effort, assuming sales, marketing and customer care expenses are tagged to individual sales personnel and /or accounts. To determine this benefit, consider measuring expense per sales and marketing personnel and/or per account. CHALLENGES FACED BY BANKS IN SUCCESSFUL IMPLEMENTATION OF CRMThe most pervasive challenges to effective customer knowledge include The difficulty of obtaining a complete view of customers. The need to move away from disjointed, standalone, and inconsistent channels to provide a cohesive, multichannel offering. The burden of disconnected legacy systems and disparate databases that store client financial data. The cost and complexity of meeting stringent government regulatory and client security and privacy requirements. The pressure on margins and growth prospects from increased competition. The costs associated with retaining customers and developing customer loyalty.

CRM PRINCIPLESThe main principles of CRM can be grouped into seven guiding factorsThe main principles of CRM can be grouped into seven guiding factors:1. Customer focus The first and foremost important guiding principle in CRM is customer focus. Who is a customer? This question is very fundamental. A customer is a person or group of persons who receives the product or servicethe final output of a process or group of processes. A customer is the final arbiter of quality, value and price of a product or service. A satisfied customer only assigns value to a service, on the contrary, to a dissatisfied customer a product or service has no value, even if the concerned service or product has been designed with lot of effort, energy and cost after a thorough planning. A satisfied customer motivates his fellow members to go in for the service or product that he has already acquired. But a dissatisfied customer always counsels his friends, and fellow members not to go to banks where his experience proved to be wrong or other-wise. So customers delight or customers satisfaction is the essence of any CRM program. As a part of this focus on customers, banks should ensure that clients are identified; their requirements are determined, understood and met enhancing customers satisfaction. 2. Leadership Persuasion, judgment and decision-making abilities are the main attributes of quality leadership. When there is a slight chance of getting a business but the client is hesitating or in a fix, or not in a position to decide properly, it should be followed up by the relationship manager by patient hearing, mild counseling and to stand by the side of the prospective client to help clear his doubts and to make him feel happy by realizing that he is going in the right direction and he is very right in choosing his requirements. The following points may be found helpful in this regard: (a) It is to be communicated to all employees that all customers should be given a proper hearing and it should be supported from all levels. (b) Ways and means should be identified and practiced of getting and staying closer to customers. (c) Proper respect should be extended to the customers. All relevant information should be collected from them with humble and polite approach. Proper value should be given to their feedback. (d) There should be proper re-action to the information and feedback provided by the customers in designing, developing and providing desired products at afford-able cost.

3. Process approach A process transforms an input into desired output by the use of resources, energies and time. In producing an output there may one single process or a group of inter-related processes. In case of inter-related processes, often the output from one process directly forms the input to the next. For effective functioning of an organization, it has to identify and manage numerous linked activities with the help of different processes for accomplishing its goal.

4. System approach Customers requirement is one level of commitment. That level implies a system that is reactive and provides to customers what they want but the target should be to achieve more and to exceed the customers expectation to accommodate future requirement and to build a cushion against the competitors attributes. CRM denotes the management of the entire system and is not confined to only one or the other sub-systems or functional departments. CRM is based on a system approach to management. Its primary objective is to increase value to customers on a continuous basis by designing and improving organizational processes and systems on a ongoing basis. Meeting Each sub-system may have its own goal but the goal and objectives of all sub-systems are to be integrated to achieve the overall goal. 5. Involvement of people The fundamentals of CRM bear the genes of customer relationship through involvement of people, i.e., the work-force at the disposal of the organization. The whole gamut of CRM is for the people, of the people and by the people. People involvement at all levels is essential for the success of a CRM program. The bank managers and staff must be in a position to exploit the concept of customer relationship completely. Customer relation may be defined as that dimension of relationship marketing that seeks and ensures customer loyalty by fulfilling promises and continuing to satisfy customers wants and needs so that defection is zero. It comprises of three levels of relationships; financial relationship, social relationship and structural relationship. Drawing of money through ATMs instead of physical presence in the branch for withdrawal of cash through cheques or withdrawal forms may be sited as example. To obtain the full benefits of people involvement, the human resource management should focus on employee empowerment, productivity linked reward, zero defeat service oriented train-ing and total quality management.

6. Mutually beneficial customer relationship The relationship with the customer should be based on a mutually beneficial relation-ship. A bank should not concentrate its attention towards earning of profits only, but focus should be directed to the customers wealth creation or value enhancement with the motto of earning through service. As an example we can talk of a savings account thats fixed up to give you more interest. It ensures that any balance in your savings account above a certain amount, say, Rs 3,000 automatically gets transferred to a fixed deposit to give you higher returns, which will be swept back into your savings account, when you need it. Sometimes, other benefits are also extended, such as, free personal accident insurance coverage along with fixed deposit scheme above a certain amount and above a certain term. Banks are no more restricting their activities to deposit and advances; rather they work with the mot-to of offering Integrated Total Package Solutions to all needs of a customer. Banks have gone to the extent of booking cinema tickets, paying utility bills, school fees etc. for the ease of their clients who are very busy and do not find time for such work. Many of such activities are not profitable in terms of time and efforts spend by the bank. But banks are carrying out such services for mutual benefits, which pays in the long run. Retention of customers and building a long lasting relationship is the main criteria under this concept.

7. Continual improvement Another objective of CRM is the efforts towards continuous improvement in the customer relationship through the provision of value added ser-vices at favorable cost. Business processes in the areas of finance, system integration, human resource management etc. are to be automated and optimized with an aim to increase the efficiency and effectiveness of operations. The most effective way of improvement lies in innovation and change management. Todays successful organizations must stimulate and foster innovation and master the art of change. Organizations that maintain their flexibility, spontaneity and unpredictability, continually improve their quality and, beat their competitors to the market place with a constant stream of innovative products and services, will be the winners. The major areas to be targeted are:(i) Improving the effectiveness of marketing.(ii) Implementing multichannel trigger driven marketing.

Types of Customer Relationship Management ToolsCustomer relationship management tools represent items or processes a company implements to create a connection with consumers. These tools can be either standard internal departments or technology that collect customer data or feedback. Traditional customer relationship management tools include a customer service department, surveys, or outsourcing. Newer tools include websites and social media networks, among other technology. Companies can use multiple tools in order to saturate the market with customer relationship tools.A customer service department is typically the front line in terms of customer outreach. This department has enough staff members to handle phone calls or other inquiries about the business and its products. The department synthesizes the gathered data for review by upper management. In most cases, this tool represents a reactive stance in terms of establishing a customer relationship. The business simply waits for customers to contact the business in order to react to issues.

Surveys Surveys and outsourcing are two related customer relationship management tools. A survey is typically a paper document companies send to customers. Several questions or other information on the survey seek information on the customers' thoughts on the business and its products. Outsourcing this process to a third party is common because the outsourcing company often has the tools and items necessary to gather information quickly and cheaply. These steps are typically a proactive stance in customer relationship management.TechnologyTechnology adds a new wrinkle to customer relationship management tools. Companies can use a corporate website as both a proactive and reactive response for customer relationship management. The website allows a company to inform consumers on sales, changes, and other information relating to the business. The biggest issue, however, is the fact that companies must wait for customers to visit the website in order to take advantage of the information or feedback forms. Companies can use the website with some success if it is set up and managed properly.Social media networksSocial media networks take technology and the use of websites to a whole new level for customer relationship management tools. These networks usually provide standard websites or tools that a company can use to inform or query consumers for information. Depending on the social media platform, a company can either send direct notes or e-mails in a proactive manner or simply advertise a link to its social media page. Either way, both methods provide a company new customer management tools to reach consumers. These tools are often additional to websites because social media may be a more frequent location for consumers to visit on the Internet\EFFECTIVE CRM IMPLEMENTATIONBanks can take several steps to strengthen their customer relationship management in an effective manner.

Acknowledge email enquiries At the very minimum, banks should send out an automated email response that acknowledges receipt of a customer's email and lets the sender know when to expect a more complete response. It is then vital to get back to the customer within the promised time frame. Banks can earn more customer goodwill if they respond faster than the imposed deadline. To handle significant volumes of email, banks need adequate routing technology. Many banks regard a voice call centre as a cost of doing business, but they don't look at it the same way with email.

Develop the right contact strategy

By knowing which offers and incentives to offer to which customers and when, banks will not annoy customers with unwanted marketing offers, building customer loyalty along the way. Such goals can be at least as important as realizing cross-sell opportunities.

Providing online `chatting' An alternative to telephone support, online chatting is providing a service via emails or any other form of immediate response. This service also offers some of the immediacy of the phone but primarily allows customers to remain online. With online chatting, service agents can usually handle between one and three customer inquiries at once.

Reduce costs by improving website design and self-service Email, telephone support, and chat all involve considerable staffing costs. But to reduce these expenses a site should anticipate customer needs. Sites that is difficult to navigate and don't provide needed information chase away some customers and force those who stay to resort to more expensive channels to satisfy their service needs.

Analyses the project's scope Before recommending or embracing CRM, bank executives must analyses the business issues, the customer relationship model and the exact nature of customer interactions and how they tie together. Banks should not embrace top-line growth as an objective until they can understand precisely how CRM technology will provide those new revenues.

Change accounts into customer Traditionally banks have closely associated customers with accounts, to the point of calling the account the customer and vice versa. Customers will tend to feel alienated when they are treated like a number instead of a person. A conventional account structure usually contains very little information about customers and their needs, or their relationship with competitors or other divisions within the bank.

TRENDS IN CRM IN BANKSToday, more than ever before, the ability to maximize customer loyalty through close and durable relationships is critical to retail banks ability to grow their businesses. As banks strive to create and manage customer relationships, several emerging trends affect the approach and tools banks employ to achieve sustainable growth. These trends reflect a fundamental change in the way banks interact with the customers they have and those they want to acquire.Focusing on organic growthTraditionally, banks have grown through an aggressive strategy of acquiring direct competitors and taking over their branch networks. Today, that strategy is no longer sufficient, since it doesnt create organic growth for the financial institution. To build stronger customer loyalty, banks need improved customer knowledge to develop products and deliver services targeted at specific market segments; resulting in more directed marketing, sales and service tactics.

Creating deep business insight into customer preferencesCustomer loyalty that drives organic growth can only be built through a consistent customer experience this means understanding each individual customers needs and preferences. One of the largest challenges banks face is how to better understand their customers and provide personalized customer service. It is clear that financial service providers can no longer sustain growth and profitability targets through mass direct mail campaigns that deliver less than 1 percent response rates. Those that do will lose out to competitors implementing personalized communications that target the right customer, at the right time, with the right product or service

Improving distribution and channel managementTo take themselves to the next level of improved sales and service, banks are focusing on developing, implementing and integrating their channels more rapidly and efficiently. Their goal is to meet three objectives:

Improved and more consistent service based on a full customer view Increased revenue through adoption of new products Improved profitability through lower product development and service costs

Forward-looking banks will simultaneously improve customer service quality and profitability by deploying an integrated CRM strategy. Deepening relationships with their customers means that banks must offer their products and services through appropriate delivery channels that appeal to their customers. Deploying multiple channels and integrating them at the enterprise level give banks a consistent and full view of the customer. To be successful, this must include all service channels both physical and virtual including, call center, Web, branch, kiosk, ATM, phone and mobile devices.

To achieve this, banks need to develop technology, operational processes and customer strategies to make their channels more effective in reaching and serving their customers. By tailoring products or services to specific customers or market segments, banks will be able to increase their product adoption rate, revenues and return on investment (ROI) for new product development. Safeguarding customer informationAdding to this complexity, customer privacy and information security are under attack as never before. The threats come from many quarters including increasingly sophisticated identity thieves, constant phishing expeditions by criminals seeking to trap unwary customers, and even inside jobs where staff sell customer data to criminals.

FINDINGS CRM has emerged as a popular business strategy in todays competitive environment. It is a discipline that enables the companies to identify and target their most profitable customers. It involves new and advance marketing strategies that not only retain the existing customers but also acquire new customers. It has been found as a unique technique which can bring remarkable changes in total output of companies. Through the literature survey and data analysis it can be inferred that CRM tries to find out the relationship between perception and satisfaction, commitment and loyalty that underlines the significance in Indian Banking Sector. Customers largely select their banks based on how convenient the location of bank was to their homes or offices. With the advent of new technologies in the business of banking, such as internet banking and ATMS, now customers can freely chose any bank for their transactions. Private Banks have traditionally viewed themselves as exceedingly Customer Centric offering what they believe to be highly personalised services to the High Net Worth Customers. It is also found that the structured approach of CRM can provide various benefits to a bank, namely a distinctive and consistent customer experience, clear identification of the organisation, technological and process-related capabilities. The banking industry is much further along than other industries in recognising the value of CRM and implementing decision support systems to support CRM. Though most of the banks have already focused on tactical point solutions, theyre ready for a transition toward strategic, enterprise-wide CRM initiatives that cross major business lines. An effective decision support system for CRM enables to collect data about customer from every touch consolidate this information into a single view of the customer, and use this information for customer profiling, segmentation, cross-selling, up selling and retention efforts. As banks continue to seek a unified understanding of customer relationships across diverse channels, the mportance and penetration of CRM is expected to grow like anything

CRM AT ICICI BANK

CRM at ICICI Bank involves increased communication between the bank and its present and prospective customers. Its philosophy focuses on each and every customers satisfactionCRM facilitated coordination of multiple business functions & multiple channel of communication with the customers to carry out customer management more efficiently. It also automated the process flow tracking in the product sales process and helped generate customized reports and promote cross-selling

Understand and Differentiate Organizations need to understand their customers in order to have a relationship with them. Profiling to understand demographics, purchase patterns and channel preference. Primary research to capture needs and attitude. Customer valuation to understand profitability, as well as lifetime value or long-term potential. The ICICI Groups customers need to see that the firm is differentiating service and communications, based on their learning independently and on the customer expectation and the expected values expected.Develop and Customize In a customer-focused world, product and channel development has to follow the customers lead, identify customers wants, determine the value and desire of the customer, etc. Organizations are increasingly developing products and services, and even new channels based on customer needs and service expectations. ICICI believes that the extent of customization should be based on the potential value delivered by the customer segment.

Interact and DeliverTo 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 potential customer value.

ICICI is strongly of the opinion that value is not just based on the price of the product or the discounts offered but 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 ICICI learns about customers, the easier it is to pinpoint those that are producing the greatest value for the organization. They aim to continue to learn more about each customer segment and use it for successful customer retention. As ICICI moves step further in CRM they hopes to gain insight and understanding that enhance the subsequent efforts. The organization shall become increasingly sophisticated in the implementation of CRM processes, and over a period of time shall become increasingly profitable by doing so.

CRM IMPLEMENTATION IN ICICICRM Implementation Following 3 areas are taken care while implementing CRM at ICICI Bank: Business FocusComponents of CRM in ICICI1. Customer Information 2. Sales Marketing Trends3. Marketing Efficency Implemented solution from Siebel for automation of customer handling Track all customer requests and complaints Identify new opportunities for existing customers as well as new customers

Organizational Structure

Organizational Structure Dynamic, constantly evolving and responsive to change Flexible and consistency in standards across business groups

Five principle groups: Retail Banking Wholesale Banking Project Finance and Special Assets Management International Business Corporate Center All the five groups are compatible with CRM

Technology Focus Technology Focus ICT (Information and Communication Technology) Strategic Tools for competitive advantage Multichannel Banking Technology Strategy 24*7 availability Technology Management Group Group wide technology Sybase IQ based database Implemented Informatics PowerCenter (2003) Extraction, transformation and loading

Conclusion Customer centric approach of ICICI Bank helped it to gain number 2 position in India for Banking service Implemented CRM not as a tool but strategy for competitive advantage Constantly paid dividends results in happy satisfied customers

SUGGESTION Customer Relationship Manager In the course of the research study there is a constant switch over of 90 percent of the customers over a period of 3 to 5 years. The major factor for such switch over is the lack of satisfaction in the service delivery and personalized products/services that cater to the needs of the customer. Hence it is suggested to have a dedicated relationship manager to measure the satisfaction levels of the customer

Identify Customer Expectation Identifying expectations of the customers and meeting the expectations by suitable products/services is one of the key elements of relationship management. It is suggested through the research study that the identification of expectation can be identified from the customers perceived service quality delivery and the satisfaction level of the customers.

Personalized Product/Services It is suggested that, bankers may encourage suitable contribution of ideas towards innovative product and services from all concerned in the process of product/Services design and delivery system. Such an approach is suggested to be continuous in character.

Building Delivery Channels Hence it is suggested to build more functional delivery channels to reduce the complexity in delivering the products/services. In spite of advancements in delivery channels like ATMs, Internet banking and mobile banking only few are gaining popularity among the customers. The retail banks need to create more awareness and increase the utilization level of the delivery channels. This will improve the service quality, reduces cost of providing the service, minimizes the delivery time and in building Eco friendly delivery system.

Crafting Complaint Resolution Mechanism(CCRM) In the research study the varying nature of customer complaints can be observed. The customers look for a system to express their complaints and get it resolved in time. It is observed from the study that it takes on an average, approximately three days to redress the grievance of a complaint which effects on the satisfaction level. Therefore it is suggested to craft a complaint resolution mechanism to bring a logical end to the issues thereby minimizing the customer complaint cycle. This will strengthen the relationship with the customer and build a reliability quotient in the operations.

Standard Processing Time(SPT) Generally the retail bank customer expects the service to be offered at the right time. In this context it is suggested that every service should be framed to a standard processing time and need to explicitly specify to the employees need to follow the SPT and bring reliability in the system.

Improving Customer Interaction The interaction with customers is an essential input for effective customer relationship. Active interaction at periodic intervals would reveal the relationship status. It is therefore suggested that, bankers may come forward with appropriate and effective interaction mechanism. In this context, the researcher could observe that some banks have already initiated steps such as, appointment of relationship managers. Such approaches should further be activated aiming at total customer interaction leading to build up better relationship.

Customization of CRM Packages The results of the research study reveal that there appears to be lack of awareness with the bank employees as well as adoption of CRM packages available in the market. It is suggested that the successful implementation of CRM package can be achieved only if the bank can create the right environment, culture and attitude of the employee aiming to serve the customers in the best possible manner

ConclusionThe study brings to light the various aspects relating to relationship building in retail Banking Industry. The variables identified are contributing towards relationship building and dissolution of relationship. It will definitely help bankers to evolve appropriate strategies towards relationship building. The study also found that there is a difference in the service quality perception of customers and bankers as regard to several aspects of relationship management. On this line of the study various suggestions towards improving Bank customer relationship by enhancing the delivered service quality and the development of personnel involved in the delivery system which is coined as External and Internal service quality. The relationship models identified in the study would throw further light on strategic decision pertaining to relationship building. An effective CRM program designed and executed will obviously provide a win-win platform to both the service providers and the customers. It is hoped that this study is a humble contribution towards achieving this goal.

Books referredCustomer Relationship Management-Emerging Concepts Tools and Application Author-Jadish N shethBIBILOGRAPHYhttp://www.slideshare.net/JyotiPunjPrakash/icici-case-on-crm-15566086http://www.slideshare.net/reshumathur/crm-at-icici-bankhttp://www.sssworld.com/News/history-of-crm/http://pure.ltu.se/portal/files/30961216/LTU-PB-EX-0503-SE.pdfhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://www.wisegeek.com/what-are-the-different-types-of-customer-relationship-management-tools.htm#http://www.webopedia.com/TERM/C/CRM.html