INTRODUCTION CRM stands for Customer Relationship Management. Mainly, the CRM system

allows businesses to manage business relationships, the data and the information associated with them.

Successful CRM systems are built around the people and relationships as in any business, the need to establish strong relationships with the customers. The business owner connects with the people who need the products or services.

His CRM introduction aims to explaining what the CRM is in a nutshell and making it easier to realize the tremendous benefits of purchasing a Customer Relationship Management software that will help drive more customers thus more profit towards the and makes the life easier.

A Cloud CRM System would be perfect for satisfying all of the business needs while being able to access the important data the need from anywhere with an internet connection available.

Definition It is clear from the previous pages that Customer Relationship

Management, CRM involves far more than technology. It involves technology, process and people.

“CRM is a business and marketing strategy that integrates technology, process and all business activities around the customer.”

WHY CRM IN BANKING ???

The goal of CRM is to manage all aspects of customer interactions in a manner that enables banks to maximize profitability from every customer. Increasing competition, deregulation, and the internet have all contributed to the increase in customer power.

• Consumers largely select their banks based on how convenient is the location of bank to their homes or offices.

• The pressures of competitive and dynamic markets have contributed to the growth of CRM in the Financial Services Sector. 

• Analysis suggests that a 5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance and brokerage, and 12.5% in the consumer credit card market.

• Private Banks have traditionally viewed themselves as exceedingly 'Customer Centric' offering what they believe to be highly personalized services to the High Net Worth Customers.

TYPES OF CRM

Operational CRM Operational CRM provides support to “front office” business processes.

Interactions with customers are generally stored in customers contact histories, and staff can retrieve customer information as necessary.

Analytical CRM Analytical CRM analyzes customer data for a variety of purposes. It is

applicable on marketing level and aims to propose an in-debt market analysis. The data collected in operational management is analyzed to segment customers. The valuable information thus obtained is used to satisfy customers. Analytical CRM is composed of Pattern discovery component.

Analytical CRM can be used in the insurance industry for the following application

• Acquiring new customers.• Identifying cross selling/up selling opportunities.• Establishing the premium rates.• Assisting the regulators to understand form rate and models.

Collaborative CRM (help):The various departments of company like the sales, technical support, and marketing, share the information they collect about customers. The objective is to improve the quality of customer service and increase customer loyalty.

Campaign Management CRM:This is a combination of Analytical and Operational systems as it can store, analyze and track the various campaigns the company has. It can also be effective in targeting specific types of customers by sending emails, calling them or sending them marketing emails with special offers.

Sales Intelligence CRM:This is similar to an Analytical system, but is used as a sales tool for employees who can look at trends and sales performance.

Sales Force Automation CRM:This CRM system will keep a record of every stage of the sales process, helping employees automate activities like making reports, scheduling calls and mailings.

Geographic CRMGeographic CRM (GCRM) combines geographic information system and traditional CRM. Geographic data can be analyzed to provide a snapshot of potential customer visits.

USE OF CRM IN OTHER INDUSTRIES

CRM in Insurance Our insurance CRM helps general & life insurance companies enhance

customer satisfaction. It boosts revenues by streamlining processes, improving intermediary management and providing actionable intelligence at front-ends on a single technology platform.

CRM in FMCG Our CRM solution for FMCGs (fast moving consumer goods) helps

companies improve their supply channels' performance and boost revenues. By streamlining marketing strategies, distribution channels and sales forecasting on a powerful technology platform, we enable transformation from a product centric to a customer centric organization. 

Hospitality IndustryHospitality is all about offering warm to someone who looks for help at a strange or unfriendly place. It refers to the process of receiving and entertaining a guest with goodwill. Hospitality in the commercial context refers to the activity of hotels, restaurants, catering, resorts or clubs who make a vocation of treating tourists.

ADVANTAGES AND DISADVANTAGES OF CRM

ADVANTAGES

The implementation of CRM in banking sector generates benefits not only to banks but also to the customers. Improvement in customer service, value enabled cross-selling which in turn increase revenue, automation of banking processes, bank to focus on improved communication, better control on quality of customer details and product details, collection of customer data, effective surveys and marketing strategies.

DISADVANTAGES

One of the disadvantages of CRM is the wrong entry or missing to enter the information of the system may lead to misleading behavior of customers. CRM may change the work culture of the organization. CRM also leads to the frequent switching of customers between different banks. Another disadvantage is the holistic integration of customer details is hard to achieve because of the complex magnanimity of banking industry.

OBJECTIVES OF CRM IN BANKS 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 provide better customer service to discover new customers

and increase customer revenue.• To cross sell products more effectively 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 improve;

• Customer satisfaction and loyalty• Customer insight/ 360º view of customer• Speed to market for products and service• Speed to market for products and service• Increase products-to-customer ratio

 Capitalizing on New market opportunities

IMPACTS OF CRM Banking Industry revolves around three basic features being:

  Intangibility Unlike a product which can be seen and benefits derived

accordingly, the banking industry thrives practically on the quality of the services rendered. The experience of the customer determines the growth of the business.

  Variability The present day customer is impatient and is highly demanding

and dos not compromise on the quality of the service rendered, as he expects that high cost equals high quality and vice versa.

  Satisfiers Unlike the manufacturing industry that wholly depends on the

tangibility and extrinsic factors, the service industry is totally dependent on the intrinsic and extrinsic factors, which have a close earring on the core benefits.

Customer Behavior Patterns

Which communication channel do they prefer? What would be the risk of leaving the bank to go to the

competition? What is the probability the customer will buy a service or product?

CRM Strategies Adopted in Banking Sector

One-stop financial super market: Right service is offered to right customers. Faced with growing

complexity in financial products, more and more customers are expressing a needed for a "trusted financial advisor" to help manage their financial affairs.

• The ATM can be accessed around the clock and safety is also more. The number of customer transaction is increased and it is used at any place.

• Master card Banks are replacing plain old ATM to this card which helps the customer to use even in restaurants and gas stations etc.

Increasing the number of delivery channels to the customers

Banks have realized that shifting customer access to lower cost channels can help in bring down the operating cost.

The ATM and Net Banking Services enable Non-Stop Banking -Convenience Banking -24 hrs access to cash -365 days of the year without any additional cost burden to the customer.

THREE “RS” OF THE CVM CYCLE

Right customers (acquisition) The customer value management cycle starts with acquiring the customers who will be most

valuable to the business. Who are these customers? Most often those who will do repeat business with the company for a long time. In The Loyalty Effect, Reich held cites examples of how long a customer must stay in order to pay for the cost of acquisition. In many industries the break-even period is a year or more, and rising. Companies can no longer afford to indiscriminately recruit customers without examining their long-term value.

Right relationship Even with the most well chosen customers, managers must develop the relationship. Customers who do don’t receive the right touch or get too many convicting offers lose rather than gain value

Right retention Effective retention means retaining the right customers, not every

customer. Managers need to focus their retention actions on customers with the highest lifetime value. Spending precious resources to retain marginally profitable or unprofitable customers actually hurts the overall value of the customer base, especially if these retention efforts succeed.

CRM FRAMEWORK CRM FORMATION PROCESS In this stage organization identifies class of customers with

whom relationship needs to include purpose for maintaining relationship and programs through which relationship is to be maintained.

Relational partiesThis stage involves selection of parties with whom to engage co-operative or collaborative relationship Even though company may serve all types of customer, few of them have necessary resources and commitment to establish CRM programs for all.

IMPLEMENTING A CRM STRATEGY

Customer Relationship Management is nothing new. In fact, it's been the foundation of business since the first barter ages ago. What is new are the strategies, technologies and applications that enable better management of customers, customer information and the business as a whole.Even with these latest advances, the basic fundamentals of CRM are constant. Ask any business and you'll hear the same demands: 

• "We need a 360 degree view of our customer"• "We need to track our marketing leads" • "We need to obtain more customers“ • "We need to measure our marketing return on investment“• "We need sales force automation“• "We need to increase our customer satisfaction" 

The primary CRM focus areas support the requirements of the customer-facing processes of a business: 

Marketing automation This type of information reduces wasted time and money Applications give marketers the ability to create, plan and execute

their campaigns to a targeted audience Sales force automation • Helps sales people track leads and opportunities for forecasting

and to optimize their sales across all sales channels. • SFA also helps reply target whom to call on, what to sell, and to

understand how their customers prefer to buy their goods or services

Customer service• Applications enables reply to resolve service issues throughout

multiple channels, where it be through the Web, a call center, fax or field service representative.

• Customer Service applications and Interaction Center applications enable customers to solve their own problems on a self-service model for efficient problem resolution.

UNDERSTANDING CUSTOMER FOCUSED STRATEGIES

Customer solutions profit1. products woven deeply into the fabric of customers’ operations2. highly efficient value chain linking customers to supplier3. high customer retention4. negative early cash flow Switchboard profit Indicators of a Switchboard Profit strategy are:1. increased profitability as volumes grow2. easy access to switchboard3. controls the information flow by switchboard4. standardized, high volume services (though internet-related

technology will change this).

Time profit Indicators of a Time Profit strategy are:• High prices and abundant profits for a short period of time• Constant innovation as value migrates away from its most recent

innovation• Ability to bring new products and services to market quickly.• CRM systems implications: rapid development and roll out of

systems Profit multiplier model• Investment (often huge) in creating a brand• Brand license across a broad array of products• Need to control risks of taking a brand to places where it does not

have authority with the customer Installed base profit• focus on acquiring high value customers, often at a loss• sound understanding of customer purchase life-cycle• a product/service portfolio to meet needs throughout life cycle,

including the follow on market• attempt to set the standard, achieve ubiquity and then harvest the

profits. CRM systems implications: excellent cross and up sell systems and processes

The Blueprint of CRM Structure Departments will be restructured for maximum business

efficiencies that require departments to begin sharing customer information. They will no longer exist as separate entities.

Process As departments begin to work together, they will discover ways

to interact more efficiently. Culture

Employees need to change their thinking and the way they conduct their work. They must begin to work efficiently with other departments and other divisions around the world. Additionally, many of the daily functions of a company can be shifted to the

Web - which requires a change in both procedure and attitude. Technology The final, obvious change will be in applying a new technology.

Companies will add the latest tools to help everyone get their jobs done, but also to help customers manage their business.

DATA WAREHOUSE AND DATA MINING

Banks have many and huge databases Valuable business information can be extracted from these data

stores Unfeasible to support analysis and decision making using

traditional query languages Human analysis breaks down with volume and dimensionality Traditional statistical methods do not scale and require significant

analysis expertise

APPLICATIONS OF INFORMATION TECHNOLOGY IN BANKING

SECTOR Electronic Clearing Debit and Credit Clearing System Tele Banking Mobile Banking Obstacles and Risk associated with IT applications