MEANING OF CRM
The need to better understand customer behavior and the interest of many
managers to focus on those customers who can deliver long-term profits has changed
now marketers view the world. Traditionally marketers have been trained to acquire
customers, either new ones who have not bought the product before or those who are
currently competitors Customers. This has required heavy doses of mass advertising
and price-oriented promotions to customers and channel member. Today, particularly
for the company‟s “best” customers the tone of the conversation has changed form
customer acquisition to retention. This requires a different mind set and a different
and new set of tools. A good thought experiment for an executive audience is to ask
them how activities. While it is difficult to an executive versus retention activities
from each other the answer is usually that acquisition dominates retention.
CRM is neither a product nor a service, But a business strategy to learn
more and mare about the customers‟ behavior them. In other words, CRM is a
comprehensive approach that provides seamless integration of every aspect of bank‟s
business that come in contact with the customer at various stages such as marketing,
service delivery after –sales –service etc. through the integration of people, process
and technology. It is a comprehensive strategy and process of acquiring, retaining and
partnering with selective customers to create supervisor value for the bank and its
The concept of customers relationship marketing (CRM) has stemmed up from this
very problem of traditional marketing. CRM recognizes the concern for both
traditional function of marketing and its scope with a goal of developing a cross
functional, coordinated focus on customers that is to reorient the entire business to
face the market.
The focus of marketing has changed from acquiring new customers to retaining old
ones. This requires a different mindset and a different and a new set of tools. A good
thought experiments for an executive audience is to ask them how much they spend or
focus on acquisition versus retention activities. While it is difficult to perfectly
distinguish the two activities from each other, the answer is usually, that acquisition
The following table suggests the evolution of Customers Relationship Marketing:
Period Focus Area
1950‟s Customer Good Marketing
1960‟s Industrial Goods Marketing
1970‟s Marketing of Non-Profit Organization or Societal
Customers Relations Marketing
In 1990‟s the concept of Relationship Marketing has emerged strongly and the focus
has been changed from Transaction Marketing to Relationship Marketing as shown
Transaction Marketing Relationship Marketing
Focus on Single sale Focus on customers retention
Orientation on product features Orientation on product benefits
Short timescale long timescale
Little emphasis on Customers Service High customer service emphasis
Limited customer commitment High customer commitment
Moderate customer contract High customers contact
Quality is primarily a concern of Quality in concern for all
A FRAMEWORK FOR CUSRTOMER RELATIONSHIP
A problem is that CRM means different things to different people. For some, CRM
means direct e-mails. For others, it is mass customization or developing products that
fit individual customers needs. For IT consultant, CRM translate into complicated
technical jargon related to terms such as OLAP (on line analytical processing) and
CICs (customer interaction centers).
What do managers need to know about their customers and how is that information
used to develop a complete CRM perspective?
It is explained with the help of following procedure:
Create a Database
A database of customer activity.
Analysis of the database.
Given the analysis, decision about which customers to target.
Tools for targeting the customers.
How to build relationship with the targeted customers.
Metrics for measuring the success of the CRM Programme.
1. CREATING A CUSTOMER DATBASE
A necessary first step to a complete CRM solution is the construction of a
customer database or information file. This is the foundation for any customer
relationship marketing activity. For web-based businesses, construction of a database
should be a relatively straightforward task as the customer transaction and contact
information is accumulated as a natural part of the interaction with customers. For
exiting companies that have not previously collected much customer contract data
form internal involve seeking historical customer contract data form internal sources
such as accounting and customer service. Ideally the database should contain
information about the following:
a. Transaction - This should include a complete purchase history with
accompanying details (Price paid, SKU, delivery date).
b. Customer Contact - Today there is an increasing number of customer contact
point from multiple channels and contexts. This should not only include sale
calls and service requests but any customer or company-initiated contact.
c. Descriptive Information - This is for segmentation and other data analysis
d. Response to Marketing Stimuli - This is part of the information file should
contain whether or not the customer responded to a direct marketing initiative,
a sales contract or any other direct contact. This data should also be
represented over time.
2. ANALYZING THE DATA
Traditionally customer database have been analyzed with intent to define
customer segments. A variety of multivariate statistical methods such as cluster and
discriminate analysis have been used to group together customers with similar
behavioral patterns and descriptive data which are then used to develop different
product offerings or direct marketing campaigns. Direct marketers have used such
techniques for many years. Their goals are to target the most profitable prospects for
catalogue mailings and to tailor the catalogues to different groups.
More recently, such segmentation approaches have been heavily criticized. Taking
a large number of customer and forming groups or segments presumes a marketing
effort towards an “average” customer in the group. Given the range of marketing tools
available that reach customer one at a time, using tailored messages designed for
small groups of customers (What has been referred to as “1-to-1” there is less need to
consider the usual market segmentation schemes designed for small groups of
customers. Rather there is increased attention being paid to understanding each „row‟
of the database-that is understanding each customers and what he or she can deliver to
the company in terms of profits and then, depending on the nature of the product or
service, addressing either customer individually or in small clusters.
As a result of new “lifetime customer value” (LCV) has been introduced into
the lexicon of marketers. The idea is that each row/customer of the database should be
analyzed in terms of current and future profitability to the firm. When a profit figure
can be assigned to each customer the marketing manager can then decide which
customers to target.
As noted a new kind of analysis born form the Internet is the click stream
analysis. In this kind of data analysis patterns of mouse “clicks” are examined from
cyber store visits and purchase in order to better understand and predict customer
behaviour. The goal is to increase conversion rates the percentage of browsing
customer to actual buyers.
3. CUSTOMER SELECTION
Given the construction and analysis of the customer information contained in the
database the next step is to consider which customers to target with the firm‟s
marketing programs. If segmentation type analyses are performed on purchasing or
related behaviour the customers in the most desired segments (e.g. highest purchasing
rates greatest brand loyalty) would normally be selected first for retention programs.
Other segment can also be chosen depending upon additional factors.
If individual customer based profitability is also available through LCV or similar
analysis it would seem to be a simple task to determine on which customers to focus.
The marketing manager can use a number or criteria such as simply choosing those
customers that are profitable (or projected to be) or imposing and ROI hurdle. The
goal is to use the customer profitability analysis to separate customers that will
provide the most long term profits from those that are currently hurting profits. This
allow the manager to fire customers that are too costly to service relative to the
revenues being produced. The 80/20 rules often holds in approximation, most of a
company‟s profits are derived form a small percentage of their customers.
Another approach would be to take the current profitability. An obvious
problem is that by not accounting for a customer‟s possible growth in purchasing, you
could be eliminating a potentially important customer. Customers with high LCV
could be chosen, as this does a better job incorporating potential purchase. However
these customers are difficult to predict and you might include a large number of
unprofitable customers in the selected group. No matter what criterion is employed
de-selected customers need to be chosen with care. Once driven away or ignored
unhappy customers can spread negative word or mouth quickly particularly in today‟s
4. TARGET THE CUSTOMERS
Mass marketing approached such as television radio of print advertising
are useful for generating awareness and achieving other communications
objective, but they are poorly suited or CRM due to their impersonal nature.
More conventional approaches for targeting selected customers include a
portfolio of direct marketing methods such as telemarketing, direct mail, and,
when the nature of the product is suitable direct sales.
In particulars the new mantra, “1 to 1” marketing has come to mean
using the Internet to facilitate individual relationship building with customer.
An extremely popular form the Internet based direct marketing in the use of
5. RELATIONSHIP PROGARMES
While customer contact through direct e-mail offerings is a useful component
of CRM, it is more of a technique for implementing CRM than a program itself.
Relationships are not built and sustained with direct e-mail themselves but rather
through the type of programs that are available for which e-mail may be a delivery
The overall goal of relationship programs is to deliver a higher level of
customers satisfaction than competing firms deliver. There has been a large volume of
research in this area. Research has shown that there is a strong, positive relationship
between customer satisfactions an profits. Thus managers must constantly measure
satisfaction levels and develop programs that help to deliver performance beyond
targeted customers expectations. Sets of relationship programs that can be employed
are as follow:
Programs designed to enhance customer service are normally of tow types:
Reactive service is where the customer has a problem (product failure question about
a bill product return) and contacts the company to solve it. Most companies today
have established infrastructures of deal with reactive service situation through toll free
telephone numbers; fax back systems, e-mail addresses and a variety of other
solutions. Proactive service is a different matter; this is a situation where the manager
had decided not wait for customer prior to complaining or other behavior sparking a
Loyalty/ Frequency programs
Loyalty programs (also called frequency programs) provide rewards to
customer for repeat purchasing .There have been identified some problems
with these programs. There are expensive mistakes can be difficult to correct,
as customers see the company, as staking away benefits and perhaps most
importantly, there are large questions about whether they work to increase
loyalty or average spending behavior. A problem that can be added to this list
is that due to the ubiquity of these programs. It is increasingly difficult to gain
competitive advantage. In addition in some industries, such programs have
become a competitive necessity.
The notion of mass customization goes beyond 1-to-1 marketing as it implies
the creation of products and services for individual customers, not simply
communicating with them.
One of the major uses of the web for both online and offline businesses is to
build a networks of customers for exchanging product related information and to
create relationships between the customer and the company or brand. The goal is to
take a prospective relationship are called communities. The goal is to take a
prospective relationship with a product and turn it into something more personal. In
this way the manager can build and environment that makes it more difficult for the
customer to leave the family of the other people who also purchase from the company.
The CRM system depends upon a database of customers information and
analysis of that data for more effective targeting of marketing communication and
relationship building activities. There is an obvious tradeoff between the ability of
companies to better deliver customized products and services and the amount of
information necessary to enable this delivery. Particularly with the popularly of the
internet many customers and advocacy groups are concerned about the amount of
personal information that is contained in database and how it is being used thus the
privacy issue extends all the way through the hierarchy of steps outlines.
Involve a set of tools that companies employ to evaluate the effectiveness of
their CRM programs.
2. REALIONSHIP MARKETING STRATEGIES
There are a number of possible relationship marketing strategies to be
considered in the development of a relationship marketing plan. Five such strategies
1. Core Service Strategy
2. Relationship Customization
3. Service Augmentation
4. Relationship Pricing
5. Internal Marketing
These strategies are not totally independent of another and can be used combination.
A firm might use all five simultaneously.
1. Core Service
A key strategy in relationship marketing is the design and marketing of a `core
service‟ around which a customer relationship can be established. The ideal core
service is one that attracts new customers through its need –meeting character,
cements the business through its quality, multiple parts, and long term nature, and
provides a base for the selling of additional services over time. Core services are
directed toward central rather than peripheral target market needs.
An example of a core service is the “individual financial services” program
offered through the trust department of Wachovia bank and trust headquartered in
Winston- salem, North Carolina. In this program customers select those specific
services they wish from a package of services including tax preparation, cash analysis,
budget assistance, insurance analysis, investment analysis, purchase and safekeeping
of securities, financial record keeping, bill paying , asset management, and estate
planning. Customers pay only for those services they select. The individual financial
services program address, affluent consumer need that many banks fail to address, has
multiple parts, is long-term in nature, and offers a platform form which other financial
services can be sold.
2. Customizing the Relationship
The nature of services affords many services firm the opportunity to customize
the relationship. By learning about the specific characteristics and requirements and
individual costomers, and then capturing these data for use as needed, service firms
can more precisely tailor service to the situation at hand. In so doing they provide
their customers with an incentive to remain as customers rather than „starting over‟
with other suppliers.
The possibilities for relationship customization are considerable, especially
when personal service capabilities are combined width electronic data processing
capabilities. For example, Xerox has introduced a service system called „Field Work
Support System‟ that involves keeping the history of a customer‟s equipment in a
computerized data bank. When assistant is required, the customer calls „work support
representative‟ on a toll free number. The representative can instantly access data
concerning the customer‟s locations, equipment, and its service record. If the problem
cannot be worked out over the telephone using a computer checklist, a field service
representative is sent to the customer‟s site.
Whereas goods are manufactured, services are performed. Frequently they are
performed by people who are in the position to custom-fit the service to the
customer‟s particular requirements. If the customer receives custom service from
company A but not form Company B – and if receiving custom service is valued by
the customer – then the customer is less likely to leave company A for B than would
otherwise be the case.
3. Service Augmentation
Another relationship marketing strategy is service augmentation. Service
augmentation involves building „extras‟ into the service to differentiate it from
competitive offerings. For meaningful service differentiation to occur, the extras must
be genuine extras- that is, not readily available from competitor – that are valued by
customers. When this is the case, customer loyalty is encouraged. As Levitt writes :
„Having been offered these extras, the customer finds them beneficial and therefore
prefers doing business with the company that supply them.‟
One practitioner of service augmentation is the Fairfax Hotel in Washington,
D.C. The Fairfax attempts to differentiate itself with its upscale target market by
providing concierge service, night butler and 24-hours room service, a multi-lingual
staff, a morning newspaper delivered to all guest rooms, a mint and cognac with the
evening turn – down service, and room amenities including terry- cloth robe, linen
laundry bag and bathroom telephone. More that 60% of the Fairfax Hotel guest have
stayed there previously.
One from of service augmentation becoming more prominent is the „preferred
customer club‟. By inviting priority customers to join a company – sponsored club,
the service company augments the offer with special services and added prestige
while establishing a vehicle to stay in touch with these customers through promotional
mailings, newsletters and the like. Marriott‟s Club Marquis provides still another
example from the hotel industry. There is no membership fee to belong to Club
marquis. The qualify for membership, and individual must stay at Marriott hotels on
five separate occasion and have their visits validated. Members receive the following
Express reservation service through a toll-free number.
Reservations automatically guaranteed for late arrival.
Most deluxe accommodations in the rate category requested.
Complimentary Wall Street Journal delivered to the room each morning.
Member also receiving and identification card and personalized luggage
tags. Club Marquis memberships are honored at all Marriott properties.
The hotel examples used demonstrate the inherent flexibility of service
augmentation. The „extras‟ can be anything so long as they are valued by the
target market and not easily matched by competitors. The use of hotels
examples does not mean, however, the concept is applicable only to hotel. The
real estate company that spends a portion of land anticipated listing
commission to cosmetically upgrade a home prior to marketing it is using
service augmentation. So is the car rental company that provides time –saving
services to members of a preferred membership club and the bank that
conducts business managements seminars for its small business clients.
4. Relation Pricing
An old marketing idea – a better price for better customer – forms the basis of
relationship pricing, another strategy option available to service companies pursuing customer
loyalty. Relationship pricing mean pricing services to encourage relationships. In effect,
customers are given a price incentive to consolidate much or all of their business with one
Although the concept of quantity discounts is not new, some service companies are
applying the concept in innovative ways. The „frequent flyer‟ program of various airlines, which
offer travelers upgrades to first class seating and free trips if they fly a certain number of miles
on a given carrier, are an attempted to build brand loyalty in what many regard as a commodity
business. A poll of more than 6000 frequent flyers indicated that 77% of the respondents were
participating in an airline frequent flyer incentive program.
As with the other relationship marketing strategies presented, relationship
pricing can be implement in various ways in various service industries.
5. Internal Marketing
A pivotal relationship marketing strategy for many service firms is internal
marketing. There are several forms of internal marketing. What all forms have in
common is the „customer‟ is inside the organization. The usage in this paper is the
employee as the customer and the job as the product.
The people who buy goods and services I the role of consumer are the same
people who buy jobs. What is known in marketing about selling and reselling them
goods and services can also used in selling and reselling them jobs. The stress placed
on customer satisfaction in external marketing is Justas appropriate, just as necessary,
in internal marketing.
Internal marketing is relevant to virtually all organizations. It is especially
important, however, for labor – intensive service organizations. In these organizations,
the quality of services sold is determined in large measure by the skills and work
attitudes of the personal producing the services. To the extent that labor – intensive
service firm can use marketing to attract, keep, and motivate quality personnel, they
improve their capability to offer quality service. Offering services that consistently
meet the quality requirements of target markets is clearly an important factor in
building strong customer relationship in any service industries.
The process one thinks of as marketing – for example, marketing research,
market segmentation, product modification, and communications programming – are
juust as relevant to internal marketing as to external marketing. Just as marketing
research procedures can be used to identify needs, wants and attitudes in the external
marketplace, so can they be used for the same purposes in the internal marketiplace.
Marriott Corporaation, for instance, annually surveys employees at each of its hotels
about their jobs. Survey results are discussed with the management of the hotel
property and shared with upper management at Marriott headquarters. Minnesota
Power and Light and GEICO are among the service companies that have regularly
used small group meetings between senior management and employees to encourage
dialogue and feedback. It employee needs and wants are to be satisfied, they must first
be identified. The tools and techniques of marketing research can help.
In essence, internal marketing involves creating an organization climate in
general, and job-products in particular, that lead to the right service personnel
performing the service in the right way. In consumption circumstances in which the
performance of people is what is being sold, the marketing task is not only that of
encouraging external customers to buy but also that of encouraging internal customers
to perform. When internal customers perform, the likelihood of external customer
continuing to buy is increased.
3. “CRM – THE NEW FACE OF MARKETING” IN
THE BANKING SECTOR
With hot winds of competition blowing across the Indian banking industry,
developing a close, symbiotic relationship with customers has become highly
important than ever before. Banks have to come out with innovation measures to
satisfy the needs of their present customers, acquire new ones and at the same time
adopt procedures to win back the lost customers. This problem gets compounded as
customer expectstions for quality, service and value are increasing rapidly on a
continuous basis. Thanks to the development of IT and ?Internet, which are changing
the possibilities in terms of customer contact, service and insight, today banks can aim
at meeting this expectation by adopting a strategy that is commonly known as
Customer Relationship Management.
Banks can leverage on these new inventions of science to develop, design and
implement CRM strategies in their business processes. Most of the Indian banks are
now turning to CRM as they are increasingly realizing that the cost of acquiring new
customer is far higher than the cost of retaining existing ones. Their quest for more
effective way to woo and retain customers end with the Implementation of CRM
models in their business practices. They no longer see CRM as an optional and
expensive add-on but as a „must‟ to survive in this ever-increasing competitive
Customer Relationship: What And How?
Before discussing about the „customer‟ relationship‟ in detail, it is important to
first examine “who a customer is ?” Quite often people wrongly perceive customers as
indivuasuals who use the service of bank i.e., the end users. However, the definition
of „customer‟ is broader and covers partners, agents, third parties, employees and of
course the end customers. Put simply, a customer is any indivual eho has a
relationship with the bank from time to time.
Relationships are not built overnight. They pass through different stages namely
contact, involvement, intimacy, deterioration, repair and dissolution. A relationship
can terminate from any of these stages. It is, therefore, essential for a bank to
understand the stage at which it could better sell banking services. Cross-selling or up-
selling can be attempted at certain stages to get better results. The recent research
indicates that some of the behavioural traits such as adaptation, trust, commitment,
communication, cooperation, conflict resolution, interdependence, past satisfaction,
power equation etc., pave the way to building up relations as also to sustain them over
a long period.
„Adaptation‟ is the prime skill that banks needs to cultivate to tailor their resourses
to meet the specific needs of the individual customer. Alignment of bank‟s resourses
with customer‟s needs is directly proportional to the quantum of trust injected into the
relationship , both by the bank as well as its customer. „Commitment‟ is another
essential ingredient for cementing the relation. A bank has to necessarily be
committed towards the customer for nurturing a fruitful relationship. Secondly, it
should reflect a multidimensional approach that encompasses the dimensions of
continuance, normative components and effective components. „Continuity‟ of a
relationship is a function of the communication used in extending the cooperation,
tracing the disagreement that creeps into the business transaction and style in which
these conflicts are resolved. In the final analysis, it is the power equation – the ability
of one party to evoke a change in other partner that greatly influences the continuity
of any relationship.
As the strategy behind the management of customer relationship is basically
concerned with sustaining relationship, it moves around the management of customer
life cycle. A typical customer relationship starts with acquisition of customers through
personal visits, media advertisements or through referrals from exiting customers.
Then the cycle movers on to customer development by way of personalized
communication and offering customized products and services based on what is
mutually considered as good. Once the customer equity is built up, bank branches can
easily afford cross-selling and up-selling. But there is a danger of the customer
migrating form the relationship, but at what stage and for what reasons the customer is
migrating has to be assessed by the individual bank branches. Using the historical
database, branches can identify the underlying causes for such migration and
accordingly redraft their relationship management strategies to minimize future
A bank being an intermediary essentially collects deposits from savers and lends to
entrepreneurs at a spread. In the process it assumes the role of a repository of the
national economy. As a result its decisions need to be timely, rational and more apt in
the given context. This multidimensional goal calls for a wealth of data, of which, the
customer related data is sizeable. A bank to function with the laid down laws of the
nations has to necessarily know its customers and decision to sell a credit
product/service demands a thorough scrutiny of the customer profile. And that is
where the modem concept of CRM through IT-enabled service applies to the banking
How Does CRM Affect the Business of Banking?
CRM has a number of positive effects on the running of a bank. It provides
management with a clear picture of the business, facilitating decision-making. Using a
common architecture and data model, customer information can be shared faultlessly
between front-end staff facing the customers to deliver services and the back-office
staff who structure the deals. Front-end staff of a bank can profile a customer, create
and maintain a customer account with contacts, manage activities, and explore
business development possibilities. Similarly, a call center agent can maintain client
data/information, produce call notes, replies to customer inquiries, and address and
track customer service requests. In a nutshell, implementation of the CRM concept in
banks can result in the following advantages:
Speed and accuracy in information analysis
Foundation for organization-wide data and information
Understanding customer behaviour
Facilitating business process re-engineering
Multiple products – credit, deposits, investment, insurance etc.
Multiple distribution channels – branch, internet, call center, field sales etc.
Multiple customer groups – customers, small business, corporation etc.
4. IMPLEMENTING CRM IN INDIAN BANKS
A bank‟s success in the field of CRM fully depends in its ability to achieve
„customer intimacy‟. And „customer intimacy‟ can be achieved by understanding and
influence a customer‟s behaviour through relevant, uninterrupted, and personalized
communication. CRM‟s very motto is not only to attract new clients/customers or
hold valuable ones, but also to boost the profitability of every indivuasual
client/customer and, hence, the bank as a whole. In other words, the major goal of
CRM is to build a single, integrated, organization – wide view of the customer,
enabling the bank to maximize customer‟s experience. By integrating front – and back
– office systems to include reports of all customer contact, purchase of
services/products, requests for information and technical support, the bank can present
a single face to the customer and offer better services. Such an interface enables banks
to access the potential of customer from time to time and offer him the customized
products to augment profits.
Suffice to say, getting the CRM philosophy work in a bank is quite complex as
well as a challenging task for the strategists for it demands them to master some key
principles of CRM such as :
a. Offering Vs. Customer Classification
To start with, banks must realize that all customers are not equal. Customer
profitability varies from person to person/context to context and not all customers are
evenly desirable for the banks. Banks must differentiate their customers based on the
„value criteria‟ i.e. how valuable the customer is? Value is nothing but the profit a
customer adds to the bank‟s account. Put simply, a more profitable customer is a „high
value‟ customer and a less profitable customer is as „low value‟ customer. A bank‟s
CRM system must also capture customers‟ tastes, preferences, behaviour, living style,
age education, cultural background, and physical and psychological characteristics,
sensitivity etc., while differentiating them by the value criteria into low and high value
customers. By combining the profitability potential of a given customer and his/her
personality profile including their expectations, customers can be grouped in to four
categories as follows :
Low value/less profitable customer desiring high-grade service.
Low value/less profitable customer with potential to become high value in
High value/more profitable customer desiring high-grade service.
High value/more profitable customer desiring low-grade service.
Once the banks differentiate their customer vis-à-vis the profitability and their other
traits, it becomes easy for banks to customize their services and offerings to maximize
the overall value of their customer portfolio.
b. Sticking to Exiting Clients
According to a research by a software company (Magic Software
Enterprises), “it is five to ten times cheaper to retain present client/customers than to
acquire new ones”. Understanding the needs and imperatives of every individual
exiting client is at the heart of CRM. A customer has only a single relationship with
the bank when he purchases products and services, and so understands the bank.
Banks, on the contrary, have thousands and millions of customer relationships in their
portfolio. Hence, it is practically impossible to satisfy the subsequent needs of each
and every exiting customer to the same level what he/she had enjoyed at the beginning
to the relationship. Thus, retention of customer becomes a challenging task. But as
acquiring a new customer is costlier than retaining the exiting one, banks must always
try to retain their exiting customers to the extent possible by thoroughly and regularly
meeting their needs. It, however does not mean that the banks should not add new
customers to their portfolio. Rather, they must acquire new customers while keeping
their present customers satisfied.
c. How to Retain a Customer
A customer can be retaining by boosting his loyalty. Loyalty can be defined
as “making a customers bank again and again with the same bank.” Banks must keep
their customers serviced and happy so that they keep transacting with them. Customer
loyalty can be differentiated into two categories: active loyalty and passive loyalty.
Active loyalty means “repeat purchases and contracts made within an appropriate time
period.” Similarly,” Passive loyalty is a term used to describe customer who have not
transacted with the bank in the absence of a better alternative. ”Unfortunately most of
the Indian banks fail to distinguish between active loyalty and passive loyalty. They
make the mistake of assuming that customer satisfaction is present in case of passive
loyalty and in this process they fail to retain their customer. To boost customer
loyalty, banks must have a clear understanding of their customers‟ unfulfilled needs
and must come out with products/services that will satisfy those needs. Banks must
have the ability to promote an individual from being a suspect to become an advertise.
They have to innovate to meet every need of their customers so that they become their
active advertiser while remaining on the loyalty arc. Turning a suspect into an active
advertiser will definitely boost the „referral sales‟ that are otherwise know as „low cost
+ high margin sales.
d. Information needed for an Effective CRM Solution
Bankers planning to implement CRM would require a large amount of
information about their bank and customer base covering the following:
1. Information about the bank
2. Market information
3. Demographic distribution of present segment of customers by:
o Level of income
o Marital status
4. About bank‟s valuable/best customers:
o Products/services they purchase for
o The segment they belong to
o Their habits, tastes, preferences
o Their businesses and future prospects
5. Customer information at the individual level:
o Personal information (name, address, family background, qualification
o The customer group/segment to which the individual belongs
o Present and past behaviour record
o Interests, disinterests, habits and preference
Current Technology Options and Availability of CRM Suites
Though integration of CRM platform is not a difficult concept, its plotting and
deployment can cause headaches to bankers. One of the major requirements is to have
a single view of the customer. This is so because multiple views of customers are
accumulated in different databases and repositories with a bank. Some customer
information is stood in several customer touch such as deposits, credits, forex,
remittances departments besides new outfits like call cetters, e-business channels,
direct sales departments etc. while other customer information is stored in back-office
systems that handle tasks such as safe custody, lockers, bill collection, cash
management etc. If these systems are made by different vendors, they might not be
able to share information, and splitting them out would be costly. However, this
problem could be overcome by using CRM suits and traditional data warehousing and
mining products and thereby ensure the display of a „single view‟ of every customer at
any given point of time.
Future application possibility will employ the open standards of J2EE, XML, NET
as well as C++ and customer-context servers. Nowadays, CRM suites are available
from various vendors across the globe including some Indian vendors. However,
suites offered by vedor like Oracle, PeopleSoft, SAP or Siebel are often preferred as
they can integrate with back office functions.
Is it necessary to set up a Specialized CRM division?
To be successful, the philosophy of CRM calls for an organization-wide approach.
There is no need to set up a specialized CRM division. However, data understanding,
warehousing and mining must be made available to everybody, so that they
understand the value/profit that each individual customer adds to the bank and how
his/ her future needs will vary form the present needs. It also helps in identifying what
additionally needs to be done to keep the customer satisfied all the times.
Responsibility of Bank Staff in the Successful Implementation of CRM
like other applications and programs, the success of CRM programs too depends on
cooperate management and vision. CRM needs the bank culture to shift from being
“task –oriented to result – oriented”. This change must be initiated by the top
management, and must allow the participation of lower-level staff members. Over the
years, many CRM programs have failed primarily dew to inadequate staff support.
5. NEED OF THE STUDY
In today‟s world of cut throat competition every business unit wants to survive and
earn profits. In banking industry, public and private sector is competing to gain more
marketing share shares. So, the fact is how to retain the old customers rather than to
attract new customer. At this point, building relations with customers and providing
them the best is very important.
The customer is king today and dictates his on terms to get the best services form
the bank he deals with. So to maintain long term relations with customers and make
him satisfied with services is another very important factor.
Now a days customer wants zero-defect products or services and in such a case
their complaints have to be rectified frequently, especially in service sector. The study
to be conducted hold its importance as it revels to the banks that customers may
switch over to another bank if complaint are not removed or services are not up to
The study holds its importance for all the banks as it acts as a feed back from
customers regarding relationship building and customer satisfactions.
As a management student, the study is important as it brings out the importance of
CRM in today‟s service sector.
6. RESEARCH OBJECTIVES
The entire project is concentrated upon following objectives:
a. To study the level of satisfaction of customers of HDFC, ICICI, IDBI
Bank and Bank of Punjab.
b. To make a comparative analysis as to which bank is excelling in
customer relationship marketing in the city of Patiala.
c. To know how frequently complaints made by customers are rectified or
suggestions given are brought in practice.
d. To know brand loyalty of the customer of the bank.
e. To understand the factors contributing to the image formation of the
7. PROFILE OF BANKS
1. HDFC Bank
The Bank was incorporated on 30th August, 1994. A new private sector Bank
promoted by Housing Development Corporation Ltd. (HDFC) , a premier housing
finance company. The bank is the first of its kind of receive an in principle approval
from the RBI for establishment of a bank in the private sector. Certificate of
commitment of business was received on 10th October,1994 from RBI as of December
31, 2006, the bank had a India network of 583 branches in 263 cities in India and over 1471
ATM's. .The bank transacts both traditional commercial banking as well as investment banking.
HDFC, the promoter of the bank has entered into an agreement with National West minister
Bank Pc. and its subsidiaries (Natwest Group) for subscribers 20% of the banks issued
capital and providing technical assistant in relation to the banks proposed banking
business. The authorized capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion).
The paid-up capital is Rs.311.9 crore (Rs.3.1 billion).
The HDFC Group holds 22.1% of the bank's equity and about 19.4% of the equity is held by
ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). Roughly
31.3% of the equity is held by Foreign Institutional Investors (FIIs) and the bank has about
The shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange. The
bank's American Depository Shares are listed on the New York Stock Exchange (NYSE) under
2. ICICI BANK
ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89 bn (US$ 56.3
bn) at March 31, 2006 and profit after tax of Rs. 25.40 bn (US$ 569 mn) for the year ended
March 31, 2006 (Rs. 20.05 bn (US$ 449 mn) for the year ended March 31, 2005). ICICI Bank
has a network of about 614 branches and extension counters and over 2,200 ATMs. ICICI Bank
offers a wide range of banking products and financial services to corporate and
ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and
representative offices in the United States, United Arab Emirates, China, South Africa and
Bangladesh.ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and
the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are
listed on the New York Stock Exchange (NYSE).
At June 5, 2006, ICICI Bank, with free float market capitalization* of about Rs. 480.00
billion (US$ 10.8 billion) ranked third amongst all the companies listed on the Indian stock
exchanges. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary ICICI was formed in 1955 at the initiative of the
World Bank, the Government of India and representatives of Indian industry. The principal
objective was to create a development financial institution for providing medium-term and long-
term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a
development financial institution offering only project finance to a diversified financial services
group offering a wide variety of products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the NYSE. Consequent
to the merger, the ICICI group's financing and banking operations, both wholesale and retail,
have been integrated in a single entity.
Various steps taken by Bank for increasing CRM
SkyCell Communications Ltd. one of the two cellular service providers in
Chennai, has launched „Sky Banking‟, for which the Company has tied up
with ICICI Bank and HDFC Bank.
The ICICI has announced the launch the mobile banking services for its
customers, using the wireless application protocol (WAP) technology.
Ford India has tied up with ICICI Bank to introduce a scheme, enabling non-
resident Indians (NRIs) to purchase a Ford Ikon car for their friends and
relatives in India.
ICICI Bank has tied up with Chennai Telephones to provide Internet bill
payment facility to its customers.
ICICI Bank has tied up with the Siddhivinayak temple trust to enable the
bank‟s infinity (Internet banking) customers to order and pay for a pooja
online, on the occasion of “Aandaraki Chaturthi”.
The Finance portal “India Infoline” has tied up with ICICI Bank and HDFC
Bank for banking back-ends.
Tata Tele services Ltd. has tied up with ICICI Bank to enable its customers to
use Internet banking facility for the payment of telephones bills.
ICICI Bank will provide credit for online transaction over “chemb.com”, the
online trading site for chemicals and chemical products, launched by
Chembazaar online Pvt. Ltd.
ICICI become the first financial institution to go for placement of
dematerialized debt securities.
“electricmela.com”, the B2B portal for the electrical industry is entering into an
alliance with ICICI Bank for payment gateways.
Spice cell has tied up with ICICI Bank for mobile bill settlements.
ICICI Bank and UAE Exchange Centre have entered into a wire transfer
arrangement, for electronic and telex transfer of funds.
The Bank has tied up with “Munshikaka.com” to provide value added services
to its customers.
The Kerala Government has joined hands with ICICI Bank to introduce
Internet banking facility in the State‟s public sector undertakings.
ICICI Bank launched its debit card under the brand name “ICICI N-Cash”.
ICICI Bank and Deutsche Bank have entered into a long-term rupee interest
rate swap benchmarked to Government bond yields.
ICICI Bank has tied up with Advantage e-accounting to offer an on-line
taxation and personal finance services along with off-line services like filling.
The Bank has entered into a wire-transfer arrangement called „Money21India‟
with the United Arab Emirates Largest foreign exchange house for transfer of
funds to India.
ICICI Bank and BPL mobile have tied up to launch a co – branded credit card.
To be named ICICI Bank –BPL Mobile Credit Card, the card will be operation
by the end of August this year.
ICICI Bank has launched its interactive touch screen Kiosk „Sparsh‟ at its
automated teller machine (ATM)
centers and branches allowing free access to its online services.
ICICI Bank has introduced Web-based product that facilities on-line conclusion
of forex deals in the city.
Visa international and ICICI Bank on September 10, 2001announced pilot
programme for facilitating e-commerce in the country.
As parts of its drive to introduced alternate delivery channels ICICI Bank has
launched mobile banking facilities in conjunction with spice communications.
ICICI Bank and BPL Mobile have tied-up to launch a co-branded credit card.
To be named ICICI Bank BPL Mobile Credit Card.
ICICI Bank acquired Shimla in Darjeeling Branches from Slandered Charted
Grind lays Bank.
3. IDBI Bank
IDBI Bank Ltd. a premiere technology driven scheduled commercial bank,
promoted by IDBI, SIDBI. IDBI bank is constantly looking for ways and means to
serve better. This is also reflected in their corporate slogan” What can I do for you?”.
The bank was incorporated on 15th September, 1994 under the Companies Act, 1956.
The Bank was granted a „ in principle‟ license by RBI to carry on banking business in
India. IDBI bank was promoted by IDBI and SIDBI, two of India‟s premier financial
institutions. IDBI was set up as a wholly owned subsidiary of RBI to provide credit
and other facilities for the development of industry.
Various steps taken by Bank for increasing CRM
IDBI Bank singed an agreement with Gemplus and Worldwide Smart Net to
launch smart cards-based solutions and Worldwide Smart Net to deliver Multi
Application Payment Chip Operating System smart cards for its India-wide
electric pursue rollout.
IDBI Principal AMC, the 50: 50 joint venture mutual fund of IDBI and
Principal Financial Service of the US, proposes to come out with a set of
innovative schemes focusing on retirement planning.
IDBI Bank has launched „Money Home‟, a housing loan product with a fixed
rate and floating rate option.
IDBI Bank launched its pioneering “smart card” product under the brand
Money Smart at Renukoot in Uttar Pradesh.
IDBI Bank has launched Money Smart card for commercial transaction in
The Bank has kicked off its restructuring programme by setting up corporate
and retail banking divisions in addition to an e-commerce team.
IDBI Bank is to launch mobile banking as part of its retail banking initiatives.
IDBI Bank has tied up with Infosys, Reuters and Synergy Log-In to revamp its
technology platform in line with its new focus area of retail banking.
IDBI Bank, launched Money Mobile, its wireless application protocol and short
messaging service mobile banking services, simultaneously at Bangalore,
Kolkata, Delhi, Hyderabad, Indore and Mumbai.
The Bank has tied up with American Express whereby Amex cardholders can
access IDBI Bank ATMs to withdraw cash.
IDBI Bank has launched a retail investment product for the retirees and
voluntary retirement seekers.
IDBI Bank has forged an alliance with MTNL in Delhi to held the account
holders of the bank to pay their phone bill through ATMs and Internet.
4. PUNJAB NATIONAL BANK
PNB is professionally managed bank with a successful track record of over 110 years.
Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the distinction
of being the first Indian bank to have been started solely with Indian capital. The bank was
nationalized in July 1969 along with 13 other banks. From its modest beginning, the bank has
grown in size and stature to become a front-line banking institution in India at present. Punjab
National Bank is serving over 3.5 crore customers through 4520 branches including 439
extension counters - largest amongst Nationalized Banks.
The bank has been conscious of its social responsibilities by financing agriculture and allied
activities and small-scale industries (SSI). Considering the importance of small-scale industries
bank has established 31 specialized branches to finance exclusively such industries.
It has strong correspondent banking relationship which Punjab National Bank maintains with
over 200 leading international banks all over the world enhances its capabilities to handle
transactions worldwide. Besides, bank has Rupee Drawing Arrangements with 15 exchange
companies in the Gulf and one in Singapore. Bank is a member of the SWIFT and over 150
branches of the bank are connected through its computer-based terminal at Mumbai. With its
state-of-art dealing rooms and well-trained dealers, the bank offers efficient forex dealing
operations in India. Punjab National Bank India maintains relationship with more than 200
leading international banks world wide. PNB India has Rupee Drawing Arrangements with 15
exchange companies in UAE and 1 in Singapore. Punjab National Bank has its Branches in all
the 7 metropolitan and cosmopolitan cities in India namely New Delhi, Mumbai, Calcutta,
Chennai, Ban galore, Hyderabad and Ahmedabad. It even has its branches in small town in both
urban as well as rural areas. PNB is always focusing on expanding abroad and till date has
identified some emerging economies abroad. They are in few of these places.
Various steps taken by Bank for increasing CRM
o Bank of Punjab has a wide area network of branches across the country.
The bank has established correspondent banking relationships across 60
o The Bank has already launched its e-banking services and mobile phone
banking for its customers as value added services.
o The Bank has put in place a 24-hour customer care centre enabling
secure Online Banking and information services.
o Bank of Punjab has made a strategic tie up with Master Card
International for its MASTERO, SWADHAN and CIRRUS
International Card Network.
o Over and above its own ATM Network the customer of Bank of Punjab
would also be able to access hundreds of ATMs of other Master Card
Member bank in India and over 5,40,000 worldwide displaying
o The Bank‟s reach is further being extended through over 5000 merchant
establishments that would be accepting the Bank‟s „e-bank” card and
the Maestro Debit Card from Master Card.
As a tribute to the memory of its founder late Dr. Inderjit Singh
and his commitment of giving the very best
employees and the world of Banking, Bank of Punjab has set up a
state-of-the-art, Dr. Inderjit Singh Institute of Banking and Insurance
Management at Gurgaon, near Delhi. The first among pear banks, the
residential institute, of truly international standards, is equipped with
comprehensive training aids, an extensive library and the latest IT
tools. The institute provides an ideal learning environment for
professionals from banking, insurance and financial sectors.
8. REVIEW OF LITERATURE
Many studies and researches have been conducted relating to CRM by various
researches and some of them have been discussed below:
Lovelock (1996) – The services sector of the economy is going through a period of
almost revolutionary properties in which established ways of doing business
continued to be shunted aside. Around he world, innovative new offering, new
standards of services succeeded in the market where established competition has
failed to please today‟s demanding customer.
As per Mc Dowell (1953), CRM has become full-fledged subject of importance
today. The Eight P‟s – Product, place, price, promotion, People, process and Physical
Evidence and Pace-helping meeting customer standards and Expectation thus
enhancing quality of Services nd Brand loyalty. Parker (1958), in his DBA
dissertation visualized the importance of Customer Services. Johanson‟s Dissertation
in 1969, asked the question “Are goods and services different? And launched the
goods versus services debate.
The Era of Pre – 1980‟s has been deifned as the “Revolution of Services” as stated
by Regan (1963). During this period the Marketing was at infant stage and lot of
things were to cleared. He expressed now the marketing through his traveled a long
distance and the concept of services marketing has come into existence. He described
the “United States” as well advance into device revolution that would significantly
change consumer behavior.
Berry (1985, 1988) suggested that the criteria used by customers are important in
moulding their expectations, precipitations and hence satisfaction, fir ten dimensions,
these are Tangibility, reliability, and responsiveness, communication, Credibility,
security, Competence, Courtesy, Understanding and access. Later the author
condensed it to five categories viz. Tangibility, Reliability, responsiveness, Assurance
and Empathy Gronross added the sixth dimension i.e. recovery.
Lewis and Smith (1989) investigated the expectation and precipitation of banks
and building society retail customers with regard to 39 elements of services divided
into 4 dimensions as Physical features, reliability, characteristics of the staff and
responsiveness towards the customers.
Ganesan (1994) suggested that long-term orientation in buyer-seller relationship is
important, as it is the function of two things: mutual dependence and trust between
them. Both these parameters help in bonding of buyer and seller thus improving their
Stewart (1998) suggested that as the customer relationship marketing or
management is given more stress in the recent past but much emphasis is required on
why customers exit? Policies, strategies are to frame in order to avoid the situation.
Seethapathi and Karuna (1999) discussed that only those banks would survive
which would give quality services to the customers and believe in the long term
Vyas (1999) is of the view that customer satisfaction is the core competence tool
for long-term relationship and profitability. He expressed the view that this would be
possible only if the services provided to the customers are of highest quality.
Aggarwal (2000) observed that the customer is the central figure in the
relationship marketing as his loyalty can be commanded towards the particular brand
A.Purushothaman (2002) concluded that relationship building leads to customer
loyalty, which, in turn, helps in retention of customers. Some highly successful
companies use already exiting strong relationships to cultivate and strengthen new
Chris Lawer (2004) observed that the organizations who identify opportunities for
improving customer relationships and who co-ordinate and measure change in all
customer impact zones will have a greater chance of success. A disciplined approach
to customer management will help them to:
Redefine the interior and construct new interfaces between itself, its customer
and partners (orientation and interface)
Identify new markets, new relationship opportunities, new service processes
and new customer value to create loyalty (Insight and Innovation)
9. RESEARCH METHODOLOGY
Importance Of Customer Relationship Marketing In Banking Sector (A Comparative
Study Of IDBI, ICICI, HDFC, BANK and BANK OF PUNJAB In The City Of
SCHEME OF THE STUDY
CHAPTER I It is the introductory chapter relating to the introduction to the CRM and
need, objectives of the study.
CHAPTER This chapter deals with profiles of HDFC, ICICI, IDBI, Bank and Bank OF
II Punjab .
CHATPER This chapter review of literature.
CHAPTER This chapter deals with research methodology covering statement of the
IV problem, scheme, and limitations of the study and research methodology.
CHAPTER This chapter covers analysis and interpretation of the data collected through
CHAPTER This chapter covers the findings and conclusion drawn from the study and
VI various recommendations and suggestions given.
DATA COLLECTION METHOD
The present study is based on both primary and secondary data sources.
i. Secondary Sources
1. To study the profile of banking in Patiala, the secondary data was
collected from the District Credit Planner 2002 – 2003 published by the
Punjab National Bank, the lead bank, Patiala.
2. To study the profile of banks and to carry out its swot analysis the
secondary data was collected from internet, newspapers, magazines and
information brochures of the banks.
ii. Primary Sources
To study the customer satisfaction level regarding the four banks, the primary data
was collected through a structured questionnaire having both close ended and open
RESEARCH APPROACH :
Market survey method of data collection by administering the structured
questionnaire was found suitable.
Survey approach is best suited for gathering descriptive information. This is the most
widely used method for primary data collection. Its purpose is to collect specific data
concerning the market that cannot be enumerated from the company‟s internal
records. The major advantage of survey research is its flexibility. It can be used to
obtain many different kinds of information in many different sitiations.
In sampling plan three decisions are to be taken :
I. Sampling Unit
This answers: who is to be surveyed? That is among the total population
who forms the population for the purpose of research. In this case the customers of
HDFC, ICICI, IDBI Bank and Bank Of Punjab were taken up as sampling unit.
II. Sample Size
This answers: what number is to be surveyed? It is difficult rather
impossible to survey each and every unit of the population due to certain constraints
like time and cost. The samples are drawn to be surveyed. Here the sample size taken
is 100 in total.
III. Sampling Procedure
Convenience Stamping Technique
IV. Contact Method
This answers : how the sample should be contacted? It can be done through
personal interview, telephone calls etc. For this purpose, personal interviewing
method i.e. collecting the information by personally interviewing the respondents and
filling the information in the questionnaire.
The collected data was tabulated and analysed using the simple statistical tools like
percentages and weighted average method. The formula used for weighted average
method is as follow:
Fn = No. of respondents of an attribute in a specific bank
t = No. of attributes (factors)
x = Total no. of respondents of a bank
Wn = Weight assigned to an attribute
r = Weighted average
LIMITATIONS OF THE STUDY
The project may suffer form certain limitations which are as follow:
a. The findings of the study are based in the subjective opinion of
the respondents. All though utmost care was taken to get the
accurate results, yet because of risk of ambiguities and
misinterpretations on the part of respondents, some element of
in accuracy might have crept in.
b. Area of study was Patiala and finding may not hold true for large
cross section of population.
c. The finding of the survey are based on the opinion of respondents
and there is no way of assessing the truth of the statements.
d. Although every effort has been made to include respondents
belonging to various socio-economic backgrounds even then the
sample (due to its small size) may not be truly representative of
10. DATA ANALYSIS AND INTERPRETATION
It is the important aspect of the entire market research. The result from the qutionnairre are
analysed by applying various tests like percentages,+weighted average etc. and interpretation is
made on the basis of data analysed . These results are helpful both for the user and fir the
organisation for which the researcher is conducted .
In all 100 questionnaries were analysed . Entire sample coverd respondents belonging to
different categories , depending upon the demografic characteristics. The respondents belonging
to different categories, depending upon the demografic characteristics . The respondents who
were interviewed are the existing customers of HDFC Bank, ICICI Bank, IDBI Bank and Bank
of Punjab . The respondents were to answer in all 9 questions. Each question was analysed on the
basis of relevant technique and interpreted as under:
Respondents gave brief information about their age , education ,occupation , monthly income
and their background . This information was collected so as to give respondents profile with
respect to this study.
100 respondents forming sample were categorized in the following age group:
Table 1: Age wise distribution of respondents
Age Group No. Of respondents (% age)
40-50 or above 22
Table 1 reveals the maximum % age of respondents i.e. 43% were in the age group of 20-30
years followed by 35% in 30-40 years and 22% in the age group of 40-50 years.
Occupations of respondents were categorized into four groups.
Table 2: Occupation wise distribution of Respondents
Occupation No. Of Respondents (%age)
Table 2 reveals the most of the respondents i.e. 43% were salaried followed by 25% belonging to
business class, 17% professional and 15% were students.
Respondents were segmented into three groups on the basis of qualifications.
Table 3: Qualification wise distribution of respondents
Qualification No. Of respondents (%age)
Table 3 reveals the maximum number of respondents 51% were graduates, followed by 39% as
post graduates and 10% undergraduates.
4) Monthly Family Income
Table 4: Income wise distribution of Respondents
Monthly Income (Rs.) No. of respondents (% age)
25000 and above 8
Table 4 reveals that 69% of respondents belong to the income group of Rs. 10000-15000
followed by 23% in Rs. 15000-25000 group and 8% in income Rs. 25000 and above group.
FINDINGS OF THE STUDY
Table 5: No. Of customers in various Banks
Banks No.of Respondents Percentage
HDFC 25 25%
ICICI 25 25%
IDBI 20 20%
PNB 30 30%
Table6: Length of relation (%age)
Year Less than Between 1-2 Between 2-3 Between 3-4 More than
Bank 1Year Years Years Years 4 years
HDFC 28 28 32 12 0
ICICI 20 40 24 16 0
IDBI 30 70 0 0 0
PNB 26 30 20 16 8
Table 6 reveals that most of the respondents for HDFC bank are sustaining their
relations for more than 2 years but less than 4 years. For ICICI bank the length is
more favorable towards 1-2 years and 2-3 years. As IDBI bank has been recently
opened its branch in Patiala, so most of its customers are 1-2 years old. PNB have
customers almost equally distributed over times with more concentration on 1-2 years.
Table 7: Service Accessed by Respondent (%age)
Services HDFC% ICICI% IDBI% PNB%
Deposits 100 100 100 100
Loans 60 52 40 40
Credit cards 44 36 20 33.3
ATM 100 100 100 100
Net Banking 40 28 25 26.67
Tele Banking 36 24 20 23.3
The above table shows that all the respondents from the sample of all the four banks
are accessing the deposits from the deposits and ATM. Loans and credit cards are
fairly accessed by the respondents. Net Banking and Tele banking are also showing
good levels of awareness but still in their infancy stage.
Table 8: Rating of the services (weighted Average)
Factors HDFC ICICI IDBI PNB
Employee Attitude 3.76 3.92 3.50 3.63
Wide Range Of Products 3.24 3.60 3.05 3.56
Security 3.16 3.56 3.25 3.76
Client Servicing 3.36 3.72 3.40 3.23
Teller operations 3.32 3.48 3.55 3.36
Infrastructure Facilities 3.08 3.36 3.00 3.26
Network 3.16 3.60 2.90 3.53
Location 3.44 3.84 3.30 3.76
Returns on Investment 3.72 3.64 3.75 3.83
ATM Transactions 3.96 3.88 3.75 3.96
Table 8 and figure 4 has been clearly showing information relating to rating given to
various services provided by banks. It clearly indicates that ICICI is doing the best as
compared to other three banks if all the factors are taken in a composite but still there
is scope of improvement in Teller operations and ATM transactions.
HDFC bank needs to improve on networking, client servicing, Teller operations and
security. People are satisfied with other factors as far HDFC bank is concerned.
The main factor influencing the decision of respondents regarding the choice of IDBI
Bank was its return on investment, Teller operations and ATM Transactions. Rest all
other factors are on a back seat as compared to other banks. PNB needs to improve on
client servicing, employee attitude and Teller operations. But people are more
satisfied with other factors as far as PNB is concerned. It is giving tough competition
in almost all factors to HDFC bank and in ahead in some.
Table 9: General Environment Of The Banks (weighted Average)
Factors HDFC ICICI IDBI CBOP
Convenient Working Hours 3.76 3.8 3.55 4
Proper decorum 3.64 3.56 3.25 3.7
Proper parking facility 3.08 2.84 2.65 3.03
No over crowding 2.92 2.96 2.95 3.1
Proper guidance 3.64 3.52 3.35 3.43
Documents at proper place 3.68 3.52 3.45 3.6
Proper sitting arrangements 3.56 3.48 3.3 3.7
According to table 9, it seems that respondents are not happy with the overcrowding
during working hours in HDFC Bank. Also many were of the opinion that there needs
to be improvement in proper sitting arrangements and decorum. ICICI Bank is also
facing similar kind of problems. Improvement in parking facility required. IDBI needs
to improve on all factors. PNB should provide proper guidance and parking facility to
Table 10: Total time taken for transactions of HDFC Bank (% age)
Attribute Less than 5 5-10 min. 10-20 min. More than 20
Open an account 16 20 48 16
Receipt of cash 4 44 44 8
Payment of cash 4 48 40 8
Issue/renewal of FDs 4 44 40 12
Overall services at front desk 0 40 52 8
From Table 10, the results reveal that the bank has timely completion of transactions
and generally complete the transactions with (5-20) min. time range which is quite
quick and satisfactory but 12% people going for more than 20 minutes in
issue/renewal of FDs as well as 16% going for opening an account means that there
needs to be close monitoring of these two aspects.
Table 11: Total time taken for transactions of ICICI Bank (%age)
Attribute Less than 5 5-10 min. 10-20 min. 20 min. and more
Open an account 8 16 60 16
Receipt of cash 12 28 44 16
Payment of cash 8 32 44 12
Issue/renewal of FDs 4 32 40 24
Overall services at front desk 0 32 56 12
Table 11 shows that ICICI Bank is able to complete most of its transactions in 5 to 20
minutes. Here also the process of issue/renewal of F.Ds, Receipt of cash and opening
of an account needs to be quicken up.
Table 12: Total time taken for transactions of IDBI Bank (%age)
Attribute Less than 5 5-10 min. 10-20 min. 20 min and more
Open an account 0 0 25 75
Receipt of cash 0 35 45 20
Payment of cash 0 35 45 20
Issue/renewalof F.Ds 0 15 50 35
Overall services at front desk 0 20 45 35
The results reveal that the bank has not timely completion of transactions and
generally complete the transactions using more than 10 minutes and in some cases
even more than 20 min., which is not quick and satisfactory.
Table 13: Total time taken for transaction of PNB (%age)
Attribute Less than 5 5-10 min. 10-20 min. 20 min. and more
Open an account 6.67 7 56 30
Receipt of cash 0 47 47 7
Payment of cash 7 39 40 13
Issue/renewal of FDs 7 33 43 16
Overall services at front desk 0 32 37 30
The results reveal that the bank has timely completion of transactions and generally
complete the transactions within (5-20) min. time range which is quite quick and
satisfactory. Overall services at front desk and opening of account needs to be
From above tables it is clear that all the banks seem to be able to complete most of
transactions within (5-20) min. time frame except IDBI Bank. HDFC Bank has been
most successful in completing most of the tasks in 5-10 minutes with ICICI bank and
PNB closely following it.
Table 14: Response regarding the problems (%age)
Problems HDFC ICICI IDBI PNB
Yes 65 30 53 55
No 35 70 47 45
Table 14 shows that people are having less problems in HDFC Bank. Few are facing
problems in ICICI bank and CBOP but a majority of them are facing some kind of
problem in IDBI bank.
Table 15: Problems as faced by the respondents
Problems HDFC ICICI IDBI PNB
Limited Products 0 0 3 5
Time consuming Procedure 8 5 9 11
Poor Personalized Banking 5 3 10 8
Limited Network 3 1 9 7
Complicated Documentation 4 2 8 7
In HDFC bank more people were concerned about the time consuming procedure but
ICICI bank customers would love to see the personalized banking and network
improve. In IDBI except limited products, rest all aspects are proving to be problems
for respondents. In PNB more people were concerned about the time consuming
procedure and personalized banking.
Table 16: Percentage of Respondents going for each scale for banks (%age)
Rating HDFC ICICI IDBI PNB
Excellent 10 8 3 4
Very Good 20 25 10 15
Good 40 30 32 37
Average 15 24 30 30
Poor 15 13 25 14
Table shows that the respondents rate HDFC BANK highest. The respondents rate ICICI
BANK and PNB equally55 while IDBI bank is far behind of all the banks.
Table 17: Suggestions given by Respondents (%age)
Suggestions/ Complaints HDFC ICICI IDBI PNB
Yes 37 24 35 42
No 63 76 65 58
From the above table it seems that more people are ready to give suggestions or
complaints to HDFC bank and ICICI bank as compared to PNB and IDBI bank. But
people were conceived that their complaints were rectified within a week or month in
HDFC bank but respondents in IDBI bank were of the opinion that it sometimes takes
more than a month. or are never rectified .ICICI bank and PNB respondents were
saying that their complaints get rectified within a month.
The entire study conducting regarding IMPORTANCE OF RELATIONSHIP MARKETING
IN BANKING SECTOR reveals the following findings:
The result show that HDFC bank has been the o overall winner in customer
Relationship Marketing with ICICI and PNB second in the list and IDBI
closely following it.
60% of the respondents for HDFC bank have 1-3 years old relations and 28%
are having less than 1 year old relation with the bank. For ICICI Bank opened
its branch in Patiala in 2002 , so 70% respondents are customers between 1-2
The two most important factors considered by the respondents of all the banks
as important for CRM are timely and quick service and cooperation and
behavior of staff followed by others.
100% respondents from all the four banks are availing the facility of Deposits
and ATM. Loans are also fairly accessed by the respondents HDFC (60%),
ICICI (52%),IDBI(40%) and PNB (40%). Net banking and tele banking are
not so much accessed by the respondents.
HDFC Bank needs to improve on Teller Operations, ATM transactions. But
people are more than satisfied with factors like Employee Attitude, Client
ICICI is doing good too as far as ATM transactions, Employee Attitude , Client
Servicing is concerned.
The main factor influencing the decision of respondents regarding the choice of
IDBI bank was its return on investment, and TELLER Operations. Rest all
other factors are on a back seat as compared to other banks.
PNB needs to improve on client servicing, Employee Attitude and Teller
Operations. But people are more than satisfied with others factors as far as
PNB is concerned. It is giving tough competition in almost all factors to
HDFC bank and in ahead in some.
The Working Hours of PNB were found to be most convenient as the bank
have increased banking hours uptil 8 in late evening . But respondents were
also satisfied with the working hours of HDFC and icici Bank.
There is a problem of overcrowding both in HDFC and IDBI bank but PNB and
ICICI bank have been able to prevent this problem.
PNB also scores over the other banks in maintaining proper decorum during
working hours and proper sitting arrangements.
HDFC came out as winner in parking facilities and proper placing of
documents over the other banks.
All the banks seems to be able to complete most of the transactions within (5-
20) min time frame except IDBI bank.
Respondents for IDBI bank were having most problems with their bank as 55%
answered in affirmative that they have some kind of problems. The number
was far less for HDFC (32%) and PNB(43%).
Those having problems were mostly concerned about limited network for ICICI
bank & poor personalized bank in case of IDBI Bank.
HDFC Bank is ahead in rating by customers with ICICI Bank and PNB closely
following it but IDBI Bank far behind.
All the three banks are having the provision of complaints / suggestion box and
24% respondents from HDFC ,24% from ICICI , 15% from IDBI bank and
16% from PNB have given the complaints/suggestion.
But there seems to be a difference in implementation part as most of the
respondents is implemented within a month but for IDBI it takes more than a
month or never implemented.
In all the four banks, those respondents who have not given any complaint/
suggestion are of the view that services of the bank are up to mark.
1 Bank should improve their service and leap ahead in customer relationship
marketing by maintaining separate database for high valued customers. Maintain a
comprehensive and exhaustive database indicates as to how banks can use this
information to tap the customers and retain the customers.
1. Bank do not contact their customers very often. To improve upon
relationship , banks should go in for continual contract with customers.
They should go in for continual contact with customers. They should
contact their high value customers from time to time and also send
updates about latest development in their banks,
2. Although all banks have a relationship manager but objectives and role
of managers ins not clearly defined. They are being utilized for
marketing , Finance and various other purposes which distract them
from real objective of CRM.
3. All banks are not actually making an attempt to measure the
effectiveness of CRM. The tools for measuring effectiveness are not
4. The bankers who do not perceive a difference in conventional and
relationship marketing should try to change their point of view of they
want to survive through cu throat competition from other bank
5. Banks should hold a CRM training workshop with customer facing
employees to develop and instill a new attitude to creativity and
6. The bankers should do proper planning for relationship marketing.
In the prevailing market scenario, competing for what has already arrived in
common place, does not keep the company ahead of its competitors An
essential requirement for companies is to develop and retain the future
industry share . Leadership will be to develop capabilities for identifying
customers unarticulated needs and design products they want. The public does
not know what is possible what we do.
Therefore, with the multiplicity of options available to a customer
today, to quote Peter Drucker,” The only profit center is are going beyond
customer satisfaction to customer delight because customer satisfaction is
limited to meeting the minimum requirements, Where there is no limit to give
them something better than that . The companies/ banks need to develop value
oriented marketing to develop satisfaction value proposition and a value
delivery system as the customer would not be satisfied merely by being loved
but would also like to feel the comfort and warmth of that love.
In crux ,”It is useless to tell a river to stop running, the best thing is to learn
the direction it is flowing.”
To conclude it can be firmly said that there has not been a lot of difference
between the application of customer Relationship Marketing for all the four
banks. All the four banks HDFC, ICICI, IDBI, PNB are close competitors of
each other and are very well aware of the fact that in today‟s competitive
world customer is the ultimate king .There are difference in certain aspects but
on the whole HDFC is leading in CRM by a very small margin.
Further advancement in technology section particularly in
information technology sector, the communication process has become more
speedy and thus the organizations and their customers are being brought into a
very close atmosphere, Wherein the organizations are trying to have
conversations to their customers and thus give an individualized dealing to
their customers which in turn would help them to create relationship bond.
So the overall business has been shifted from making sales
of the short horizon to that of building long lasting relationship with the