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Thesis Customer Relationship Management in Barclays bank by sjain38401

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This work will give you complete overview of CRM in banking sector with special reference to Barclays bank

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									                               EXECUTIVE SUMMARY

Banks are facing greater challenges than ever before in executing their customer management
strategies. Intensifying competition, proliferating customer contact channels, escalating attacks
on customer information, rising customer expectations and capitalizing on new market
opportunities are at the top of every bank executive’s agenda. In looking for ways to drive
growth, banks need to evaluate their customer management strategy. Do they currently have a
CRM solution that is capable of delivering:

      Consistent and cost-effective customer service?
      Customer-aligned products and services?
      Enhanced customer loyalty and long-term value?

Today, more than ever before, the ability to maximize customer loyalty through close and
durable relationships is critical to retail banks’ ability to grow their businesses. As banks strive to
create and manage customer relationships, several emerging trends affect the approach and tools
banks employ to achieve sustainable growth. These trends reflect a fundamental change in the
way banks interact with the customers they have − and those they want to acquire. To build
stronger customer loyalty, banks need improved customer knowledge to develop products and
deliver services targeted at specific market segments; resulting in more directed marketing, sales
and service tactics

                                  1. INTRODUCTION

Indian Banking sector is dominated by Public sector banks (PSBs) which accounted for 72.6% of
total advances for all SCBs as on 31st March 2008. PSBs have rapidly expanded their foot prints
after nationalization of banks in India in 1969 and further in 1980. Although there is a restrictive
entry/expansion for private and foreign banks in India, these banks have increased their presence
and business over last 5 years. Peculiar characteristic of Indian banks unlike their western
counterparts such as high share of household savings in deposits (57.4% of total deposits),
adequate capitalization, stricter regulations and lower leverage makes them less prone to
financial   crisis,   as    was     seen     in     the   western    world     in    mid     FY09.
The Scheduled Commercial Banks (SCBs) in India have shown an impressive growth from
FY04 to the mid of FY09. Total deposits, advances and net profit grew at CAGR of 19.6%,
27.4% and 20.2% respectively from FY03 to FY08. Banking sector recorded credit growth of
33.3% in FY05 which was highest in last 2 and half decades and credit growth in excess of 30%
for three consecutive years from FY04 to FY07, which is best in the banking industry so far.
Increase in economic activity and robust primary and secondary markets during this period have
helped the banks to garner larger increase in their fee based incomes. A significant improvement
in recovering the NPAs, lowest ever increase in new NPAs combined with a sharp increase in
gross advances for SCBs translated into the best asset quality ratio for banking sector in last two
decades. Gross NPAs to gross advances ratio for SCBs decreased from the high of 14% in
FY2000                     to                     2.3%                  in                   FY08.
With in the group of banks, foreign and private sector banks grew at higher rate than the industry
from FY03 to FY08 primarily because of lower base effect and rapid expansion undertaken by
these banks. In FY09, overall growth in credit and deposits was led by PSBs. However, growth
of private and foreign banks was significantly lower in FY09 due to their high exposure to
stressed sectors and problem at parent level for foreign banks. Unsecured bank credit has risen
over the years and stood at 23.3% of bank credit in FY08 as compared to just 10.9% in FY2000.
Lending to sensitive sector has also grown at CAGR of 46.1% from FY05 to FY08. In the
backdrop of the economic downturn, CARE Research feels that the excellent performance seen
in   last   five   years   ended   FY08     will   be   difficult   to   repeat   in   coming   years.
CARE Research expects that with the downturn in the economy, credit and deposit growth will
moderate in coming years. Credit growth will be led by spending on the infrastructure while
retail credit will show a moderate growth. Margin pressures due to lag effect of rate cuts between
interest rate on deposits and advances, lower treasury gains and core fee income and increasing
in provisions for NPAs is likely to put pressure in the bottom line of the banks. Going forward,
PSBs’ which are close to the required lower level of government stake and have concentrated
presence in particular region are likely to consider its merger with other PSB as an important
option if they want to sustain the growth seen in past. With the downturn in the economy, CARE
Research expects that credit and deposit growth will moderate in coming years. Credit growth
will be led by spending on the infrastructure while retail credit will show a moderate growth.
Margin pressures due to lag effect of rate cuts between interest rate on deposits and advances,
lower treasury gains and core fee income and increasing in provisions for NPAs is likely to put
pressure in the bottom line of the banks.


The evolution of the modern commercial banking industry in India can be traced to 1786 with
the establishment of Bank of Bengal in Calcutta. Three presidency banks were set up in Calcutta,
Bombay and Madras. In 1860, the limited liability concept was introduced in banking, resulting
in the establishment of joint stock banks like Allahabad Bank Limited, Barcalys Bank Limited,
Bank of Baroda Limited and Bank of India Limited. In 1921, the three presidency banks were
amalgamated to form the Imperial Bank of India, which took on the role of a commercial bank, a
bankers’ bank and a banker to the government. The establishment of the RBI as the central bank
of the country in 1935 ended the quasi-central banking role of the Imperial Bank of India. In
order to serve the economy in general and the rural sector in particular, the All India Rural Credit
Survey Committee recommended the creation of a state-partnered and state sponsored bank
taking over the Imperial Bank of India and integrating with it, the former state owned and state-
associate banks. Accordingly, the State Bank of India (“SBI”) was constituted in 1955.
Subsequently in 1959, the State Bank of India (Subsidiary Bank) Act was passed, enabling the
SBI to take over eight former state-associate banks as its subsidiaries. In 1969, 14 private banks
were nationalized followed by six private banks in 1980. Since 1991 many financial reforms
have been introduced substantially transforming the banking industry in India.

Reserve Bank of India:

The RBI is the central banking and monetary authority in India. The RBI manages the country’s
money supply and foreign exchange and also serves as a bank for the GoI and for the country’s
commercial banks. In addition to these traditional central banking roles, the RBI undertakes
certain developmental and promotional activities. The RBI issues guidelines, notifications,
circulars on various areas including exposure standards, income recognition, asset classification,
provisioning for non-performing assets, investment valuation and capital adequacy standards for
commercial banks, long-term lending institutions and non-banking finance companies. The RBI
requires these institutions to furnish information relating to their businesses to the RBI on a
regular basis.

Commercial Banks:

Commercial banks in India have traditionally focused on meeting the short-term financial needs
of industry, trade and agriculture. At the end of June 2009, there were 286 scheduled commercial
banks in the country, with a network of 67,097 branches. Scheduled commercial banks are banks
that are listed in the second schedule to the Reserve Bank of India Act, 1934, and may further be
classified as public sector banks, private sector banks and foreign banks. Industrial Development
Bank of India was converted into a banking company by the name of Industrial Development
Bank of India Ltd. with effect from October, 2008 and is a scheduled commercial bank.
Scheduled commercial banks have a presence throughout India, with nearly 70.2% of bank
branches located in rural or semi-urban areas of the country. A large number of these branches
belong to the public sector banks.
Public Sector Banks:

Public sector banks make up the largest category of banks in the Indian banking system. There
are 27 public sector banks in India. They include the SBI and its associate banks and 19
nationalized banks. Nationalized banks are governed by the Banking Companies (Acquisition
and Transfer of Undertakings) Act 1970 and 1980. The banks nationalized under the Banking
Companies (Acquisition and Transfer of Undertakings) Act 1970 are referred to as
‘corresponding new banks’. Barcalys Bank is a public sector bank nationalized in 1969 and a
corresponding new bank under the Bank Acquisition Act. At the end of June 2004, public sector
banks had 46,715 branches and accounted for 74.7% of the aggregate deposits and 70.1% of the
outstanding gross bank credit of the scheduled commercial banks.

Regional Rural Banks:

Regional rural banks were established from 1976 to 1987 jointly by the Central Government,
State Governments and sponsoring public sector commercial banks with a view to develop the
rural economy. Regional rural banks provide credit to small farmers, artisans, small
entrepreneurs and agricultural labourers. There were 196 regional rural banks at the end of June
2009 with 14,433 branches, accounting for 3.6% of aggregate deposits and 2.9% of gross bank
credit outstanding of scheduled commercial banks.

Private Sector Banks:

After the first phase of bank nationalization was completed in 1969, the majority of Indian banks
were public sector banks. Some of the existing private sector banks, which showed signs of an
eventual default, were merged with state-owned banks. In July 1993, as part of the banking
reform process and as a measure to induce competition in the banking sector, the RBI permitted

entry by the private sector into the banking system. This resulted in the introduction of nine
private sector banks. These banks are collectively known as the ‘‘new’’ private sector banks.
There are nine “new” private sector banks operating at present.

Foreign Banks:

At the end of June 2009, there were around 33 foreign banks with 200 branches operating in
India, accounting for 4.7% of aggregate deposits and 7.3% of outstanding gross bank credit of
scheduled commercial banks. The Government of India permits foreign banks to operate through
(i) branches; (ii) a wholly owned subsidiary or (iii) a subsidiary with aggregate foreign
investment of up to 74% in a private bank. The primary activity of most foreign banks in India
has been in the corporate segment. However, some of the larger foreign banks have made
consumer financing a significant part of their portfolios. These banks offer products such as
automobile finance, home loans, credit cards and household consumer finance. The GoI in 2008
announced that wholly owned subsidiaries of foreign banks would be permitted to incorporate
wholly-owned subsidiaries in India. Subsidiaries of foreign banks will have to adhere to all
banking regulations, including priority sector lending norms, applicable to domestic banks. In
March 2008, the Ministry of Commerce and Industry, GoI announced that the foreign direct
investment limit in private sector banks has been raised to 74% from the existing 49% under the
automatic route including investment by FIIs. The announcement also stated that the aggregate
of foreign investment in a private bank from all sources would be allowed up to a maximum of
74% of the paid up capital of the bank. The RBI notification increasing the limit to 74% is
however still awaited.

Cooperative Banks:

Cooperative banks cater to the financing needs of agriculture, small industry and self-employed
businessmen in urban and semi-urban areas of India. The state land development banks and the
primary land development banks provide long-term credit for agriculture. In light of the liquidity
and insolvency problems experienced by some cooperative banks in fiscal 2006, the RBI
undertook several interim measures to address the issues, pending formal legislative changes,
including measures related to lending against shares, borrowings in the call market and term
deposits placed with other urban cooperative banks. The RBI is currently responsible for
supervision and regulation of urban co-operative societies, the National Bank for Agriculture and
Rural Development, state co-operative banks and district central co-operative banks. The
Banking Regulation (Amendment) and Miscellaneous Provisions Bill, 2007, which was
introduced in the Parliament in 2007, proposed the regulation of all co-operative banks by the
RBI. The Bill has not yet been ratified by the Indian Parliament and is not in force.

Term Lending Institutions:

Term lending institutions were established to provide medium-term and long-term financial
assistance to various industries for setting up new projects and for the expansion and
modernization of existing facilities. These institutions provide fund-based and non-fund based
assistance to industry in the form of loans, underwriting, and direct subscription to shares,
debentures and guarantees. The primary long-term lending institutions include Industrial
Development Bank of India (converted into a banking company with effect from October, 2008),
IFCI Ltd., Infrastructure Development Finance Company Limited, and Industrial Investment
Bank of India and Industrial Credit Corporation of India Limited (prior to its amalgamation).

Banking Sector Reforms:

In the wake of the last decade of financial reforms, the banking industry in India has undergone a
significant transformation, which has covered almost all important facets of the industry. Most
large banks in India were nationalized in 1969 and thereafter were subject to a high degree of
control until reform began in 1991. In addition to controlling interest rates and entry into the
banking sector, the regulations also channeled lending into priority sectors. Banks were required
to fund the public sector through the mandatory acquisition of low interest-bearing government
securities or statutory liquidity ratio bonds to fulfill statutory liquidity requirements. As a result,
bank profitability was low, non-performing assets were comparatively high, capital adequacy
was diminished, and operational flexibility was hindered.

                               2. COMPANY PROFILE

About Barclays Bank:

Barclays PLC is a leading British financial firm that provides financial services to its customers.
Barclays Bank India is among one of the most respected foreign bank in the country providing
services to over 9 lakh clients. Globally, Barclays PLC has been ranked as the 25th largest
company by Forbes Magazine. Datamonitor ranked Barclays as the largest financial services
provider globally with $3.7 trillion in terms of market share. Barclays has extensive international
presence in more than 50 countries in Europe, USA, Asia and Africa. Barclays Bank PLC in the
United Kingdom is the sponsor of English Professional League Football known as the Barclays
Premier League.

Barclays Bank India:

The clients of Barclays Bank India consist of individuals, multi national companies, public sector
companies and a large number of small and medium enterprises. Services consisting of payment
and cash management services, trade, finance, loans, deposits and treasury solutions are offered
to clients. The consumer banking division of Barclays Bank India that was launched in 2007
offers customers an increasing suite of products and services that are relevant both to the
emerging markets and the current market needs as well. Barclays recently launched The Latitude
Club, a global commercial banking proposition that helps corporate customers to identify
international prospective business partners.

Barclays Bank India: Commercial Banking

All the customers of Barclays Commercial Banking have a dedicated Relationship Manager to
help them manage their funds in the best possible way. The Relationship Managers have specific
industry expertise and experience to understand the financial requirements of the clients; they
also provide access to Sales Financing Managers and International Trade Managers as required.
Some of the commercial banking products of Barclays include trade & finance, deposits, treasury
solutions, payment & cash management, loans and financing.


This bank traces its origins back to 1690 when John Freame and Thomas Gould started trading as
goldsmith bankers in Lombard Street, London. The name "Barclays" became associated with the
business in 1736, when James Barclay, son-in-law of John Freame, one of the founders, became
a partner in the business. In 1728, the bank moved to 54 Lombard Street, which was identified by
the 'Sign of the Black Spread Eagle, over the years becoming a core part of the bank's identity.

In 1776 the firm was styled "Barclay, Bevan and Bening" and so remained until 1785, when
another partner, John Tritton, who had married a Barclay, was admitted, and the business then
became "Barclay, Bevan, Barclay and Tritton".

In 1896 several banks in London and the English provinces, notably Backhouse's Bank of
Darlington and Gurney's Bank of Norwich, united under the banner of Barclays and Co., a joint-
stock bank. Between 1905 and 1916 Barclays extended its branch network by making
acquisitions of small English banks.

Further expansion followed in 1918 when Barclays amalgamated with the London, Provincial
and South Western Bank and in 1919 when the British Linen Bank was acquired by Barclays
Bank, although the British Linen Bank retained a separate board of directors and continued to
issue its own bank notes. Then in 1924 the planned takeover of National Bank of Kingston
reached near-completion but was halted three days before finalization.

The new millennium:

The year 2000 saw the acquisition of Woolwich plc (formerly the Woolwich Building Society).
Then in 2001 Barclays closed 171 branches in the UK, many of them in rural communities:
Barclays called itself "THE BIG BANK" but this name was quickly given a low profile after a
series of embarrassing PR stunts. In 2003 Barclays bought the American credit card company
Juniper Bank from CIBC, re-branding it as "Barclays Bank Delaware". The same year saw the
acquisition of Banco Zaragozano, the 11th Spanish bank. Barclays took over sponsorship of the
Premier League from Barclaycard in 2004. In 2005 Barclays sealed a £2.6bn takeover of Absa
Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July 2005. Then
in 2006 Barclays purchased the HomEq Servicing Corporation for $469 million in cash from
Wachovia Corp. That year also saw the acquisition of the financial website Comparetheloan and
Barclays announcing plans to rebrand Woolwich branches as Barclays, migrating Woolwich
customers onto Barclays accounts and migrating back-office processes onto Barclays systems -
the Woolwich brand was to be used for Barclays mortgages.            In January 2007 Barclays
announced that it has purchased the naming rights to the Barclays Center, a proposed 18,000-seat
arena in Brooklyn, New York, where the New Jersey Nets planned to relocate.

Lehman Brothers acquisition:

On September 16, 2008, Barclays announced its agreement to purchase, subject to regulatory
approval, the investment-banking and trading divisions of Lehman Brothers, a United States
financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquire the
New York headquarters building of Lehman Brothers. On September 20, 2008, a revised version
of the deal, a $1.35 billion (£700 million) plan for Barclays plc to acquire the core business of
Lehman Brothers (mainly Lehman's $960 million Midtown Manhattan office skyscraper, with
responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge
James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the
only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall
in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing
I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to
imagine a similar emergency." Luc Despins, the creditors committee counsel, said: "The reason
we're not objecting is really based on the lack of a viable alternative. We did not support the
transaction because there had not been enough time to properly review it." In the amended
agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading
liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase
price for the real estate components of the deal would be $1.29 billion, including $960 million
for Lehman's New York headquarters and $330 million for two New Jersey data centers.
Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB
Richard Ellis this week valued it at $900 million." Further, Barclays will not acquire Lehman's

Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman
Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management
business for high net-worth individuals. Finally, Lehman will retain $20 billion of securities
assets in Lehman Brothers Inc that are not being transferred to Barclays. Barclays had a potential
liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman
employees beyond the guaranteed 90 days.

Recent developments:

Reuters later reported that the British government would inject £40 billion ($69 billion) into
three banks including Barclays, which might seek over £7 billion. Barclays later confirmed that it
rejected the Government’s offer and would instead raise £6.5 billion of new capital (£2 billion by
cancellation of dividend and £4.5 billion from private investors).

In January 2009 the press reported that further capital may be required and that while the
government might be willing to fund this, it may be unable to do so because the previous capital
investment from the Qatari state was subject to a proviso that no third party might put in further
money without the Qataris receiving compensation at the value the shares had commanded in
October 2008.

In March 2009 it was reported that in 2008, Barclays received billions of dollars from its
insurance arrangements with AIG, including $8.5bn from funds provided by the United States
taxpayers to bail out AIG. On 12 June 2009, Barclays sold its Global Investors unit, which
includes its exchange traded fund business, iShares, to BlackRock for $13.5bn. Standard Life
sold Standard Life Bank plc to Barclays plc in October 2009. The sale completed on 1 January
2010. On 11 November 2009, Barclays and First Data, a global technology provider of
information commerce, have entered into a agreement according to which Barclays will migrate
a range of card portfolios to First Data's issuing and consumer finance platform. On February 13,
2010 Barclays announced it would pay more than £2 billion in bonuses

Organizational structure:

Barclays is headed by Marcus Agius, the Group Chairman, who joined the Board on 1
September 2006 and succeeded Matthew Barrett as Chairman from 1 January 2007. Agius is also
the senior executive Director of the BBC and was formerly Chairman of BAA PLC, Chairman of
Lazard in London and a Deputy Chairman of Lazard LLC until 31 December 2006. Reporting
directly to the Group Chairman is John Varley, the Group Chief Executive, who is responsible
for the strategic direction and planning of all Barclays operations. Varley was appointed to the
role in September 2004 prior to which he served as Deputy Chief Executive (January-September
2004) and Group Finance Director (2000–2003). The operating units of Barclays are grouped
under two umbrellas; Corporate, Investment Banking and Investment Management (IB&IM) and
Global Retail Banking (GRCB). IB&IM oversees three core operating units: Barclays Capital,
Barclays Corporate and Barclays Wealth.

GRCB oversees multiple operating units. Principally it has responsibility for UK Retail Banking
(UKRB), Barclaycard and International Retail Banking.

Board of Directors:

Barclays is headed by Group Chief Executive John Varley. Within the Group CEO's office are
housed the central corporate functions of Human Resources, General Counsel, Corporate Affairs,
Internal Audit and Group Chief of Staff. The company has no COO or CIO. Paul Idzik, the
former COO, completed an organisational redesign that saw IT functions devolved to the core
business divisions - Global Retail & Commercial Banking and Investment Banking - and,
following completion Idzik resigned from his post.

Serving alongside Mr. Varley on the Group's ExCo are:

      Chris Lucas - Group Finance Director
      Bob Diamond - President, Barclays PLC; CEO, Investment Management & Investment

Also reporting to Mr. Varley and thus part of the senior management team:

      Group HR Director - Cathy Turner (also responsible for Group Corporate Affairs)
      Group General Counsel - Mark Harding
      Group Chief of Staff - Matt Hammerstein
      Director of Internal Audit - Mark Carawan

The key business units and their CEOs are:

      UK Retail Banking - Deanna Oppenheimer
      UK Commercial Banking - Eduardo Eguren
      Barclaycard - Antony Jenkins
      Western Europe - Leo Salom
      Emerging Markets - Vinit Chandra
      Wealth Management - Tom Kalaris
      Capital - Jerry del Missier

The Board Members are:

      Marcus Agius - Chairman
      David Booth - Non Executive Director
      Sir Richard Broadbent - Senior Independent Director
      Leigh Clifford - Non Executive Director
      Fulvio Conti - Non Executive Director
      Professor Sir Andrew Likierman - Non Executive Director
      Sir Michael Rake - Non Executive Director
      Stephen Russell - Non Executive Director
      Sir John Sunderland - Non Executive Director
      Patience Wheatcroft - Non Executive Director
      Simon Fraser - Non Executive Director


Barclays has over 1800 UK high street branches (including former Woolwich branches) and it
has also joined up with the Post Office Ltd to provide personal banking services to customers
who live near a Post Office branch and those who need financial services such as secured or
unsecured loans. Worldwide, Barclays has over 4,750 branches in over 50 countries. Most
Barclays branches have 24/7 Cash machines. Barclays' customers and customers of many other
banks can use Barclays ATMs free of charge. Barclays Capital is a strong investment arm owned
by Barclays Bank PLC. Barclays Capital had created an investment funds business that handles
billions of pounds daily, iShares. After much debate, Barclays president Bob Diamond, along
with other Barclays bosses chose to sell the iShares business to further boost capital. The
preliminary price for the business is £3billion, although Barclays has the flexibility to sell at a
higher price, should a bidder show interest before the selling deadline. Barclays is a member of
the Global ATM Alliance.


Since 2004, Barclays has sponsored the Premier League and, from 2006, the Churchill Cup.
Barclays also sponsored the Football League from 1987 until 1993, succeeding Today newspaper
and being replaced by Endsleigh Insurance. It also sponsored the 2008 Dubai Tennis
Championships. In 2009 it was the official sponsor of the Tennis Masters Cup. Barclays is a
major sponsor of professional golf tournaments worldwide, the Barclays Scottish Open on the
European Tour at Loch Lomond since 2002, the Barclays Classic on the PGA Tour from 2005–
2006, which became The Barclays in 2007, the first of four playoff tournaments for the FedEx
Cup, and since 2006 Barclays has been title sponsor to the Singapore Open, the richest national
open in Asia, and since 2009 has been co-sanctioned with the European Tour. Barclays also
sponsors PGA TOUR star Phil Mickelson.

                        3. RESEARCH METHODOLOGY

Research Methodology:

Sampling Design: - Sampling design consists of:
a) Sampling unit: - Customers of Barclays Bank.
b) Sample Size: - It was taken sample size of 100.
c) Sampling Procedure: - Stratified Random sampling procedure was followed.
d) Sampling Method: - Data were collected by the questionnaire

Methods of Data Collection:

Primary Data

Primary Data Collection: - Primary data is collected by Survey. Here, only survey method of
data collection is preferred which is very suitable to reach the researchers motto.
Research Instrument: - Printed questionnaire was used as the research instrument to collect the
required information.

Secondary Data:
Secondary data was collected by different mediums like colleagues, different company websites
and data provided by company officials to carry out study.

                             4. LITERATURE REVIEW

Customer Relationship Management: The Concept

Customer Relationship Management is the establishment, development, maintenance and
optimization of long-term mutually valuable relationships between consumers and the
organizations. Successful customer relationship management focuses on understanding the needs
and desires of the customers and is achieved by placing these needs at the heart of the business
by integrating them with the organization's strategy, people, technology and business processes.
At the heart of a perfect CRM strategy is the creation of mutual value for all the parties involved
in the business process. It is about creating a sustainable competitive advantage by being the best
at understanding, communicating, and delivering, and developing existing customer relationships
in addition to creating and keeping new customers. So the concept of product life cycle is giving
way to the concept of customer life cycle focusing on the development of products and services
that anticipate the future need of the existing customers and creating additional services that
extend existing customer relationships beyond transactions.

Customer Relationship Marketing is the fourth significant post-war wave. While marketers have
long viewed brands as assets, the real asset is brand loyalty. A brand is not an asset. Brand
loyalty is the asset. Without the loyalty of its customers, a brand is merely a trademark, an
ownable, identifiable symbol with little value. With the loyalty of its customers, a brand is more
than a trademark. A trademark identifies a product, a service, a corporation. A brand identifies a
promise. A strong brand is a trustworthy, relevant, distinctive promise. It is more than a
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