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Chapter 2. Review of Literature for CRM practices

2.1. Customer Relationship Management:

According to B. C. Saraswathy (2006), Customer relationship management /

customer relationship marketing (CRM) today changed customer behavior in the

environment has become a typical marketing strategy. Late, customers are smart and

communications revolution and the explosion of the Internet have all the information

at their fingertips. They have become more cost conscious and value driven with equal

or better offers are contacted by a legion of competitors. Accordingly, reactive

marketing of basic marketing practices for marketing and relationship marketing has

shifted again. CRM, thus, repeated purchases with customers to promote profitable,

long-term relationship building process. For its successful implementation, CRM but a

mere short-term marketing tool to boost sales in the organization must be seen as

cutting a philosophy.

According to Madhu Jasola (2008), Customer relationship management in today's

competitive environment has emerged as a popular business strategy. The companies

identify their most profitable customers and enable you to target a discipline. CRM

retain existing customers, but also acquiring new customers, which not only includes

the new and advanced marketing strategies.

Semih Onut & Bora Hosver discuss that Important satisfaction dimensions and the

private bank sector specific preferences and expectations with customer groups

focused on determining the evaluation of CRM in banking sector. Data analysis and

interpretation of the methodological approach used for modeling and multi-criteria are

Modeling is based on the principles of preference disaggregation. Together noted was

the key to long-term success of the firm? It also provides social interaction and

customer relationship management, focused on long-term relationships that help

develop cooperative and profitable affiliates based on the equity in the firm.

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2.2 The retail banking business agility:

The market for retail banks and businesses to adapt quickly to changing needs sleep,

continue to seek additional revenue, and improve operational efficiency. Market

dynamics, equipment, capital expenditures, labor costs, and all staff business agility,

versatility, flexible load balancing, and through better business process management

can be controlled.

Customized customer service, improve operational efficiencies, and presents

significant technical challenges and gain more profits. To meet these demands, Service

Oriented Architecture (SOA) is a Provides retail banking technology platform that

delivers agility necessary. For retail banks, the paper includes a discussion of SOA can

help you discover how to support an agile business environment.

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Figure2.2 Business development and customer value

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2.2.1. Channel renewal and Customer Experience:

So many channels to provide a consistent customer experience and confidence of

customers for banks. Effective CRM service regardless of the channel is aware of all

trips.

Joint channel banking community renewal, with a customer-centric approach that can

provide a powerful platform for creating business strategy to better serve customers

and improve sales and marketing effectiveness to improve carcass. Customer chooses.

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Figure 2.2.1.

Excellent customer service via any channel that picks

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2.3. CRM in the Banking sector:

Embracing technological platforms and delivery systems in banks, an important aspect

is the effect this will have on the bank's customer relationships. Marketing process to

attract For new customers should be seen as an intermediate step. Similar aspects of

close relationships with these customers and to develop marketing loyalists. Another

important aspect of CRM is customer selectivity.

2.3.1. The role of service providers in the banking sector:

A commercial approach is no universally accepted definition of CRM has been widely

recognized CRM.

• Customer Acquisition

• Customer Retention

• Customer Loyalty

• Customer profitability.

2.3.2. Customer retention and customer relationships:

Customer satisfaction and loyalty are the key elements of business success and

profitability. Many customers more loyal, satisfied customers and more durable

connection. And the longer it lasts, the company stands to make more profits and

higher market share. Highly correlated to customer satisfaction and loyalty, but as two

separate constructs. Relationship with a bank customer satisfaction, loyalty is a good

basis, however, it is not guaranteed because satisfied customers switch banks. Pricing

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is an important reason for the change. Therefore, customer loyalty programs that

provide incentives to banks.

CRM measures adopted by banks to customers on how to respond to the rare literature.

The research related to CRM initiatives adopted by banks in India has attempted to

study customer perceptions. CRM strategies in the banking sector before the end of the

inquiry officer helps.

2.3.3 Data Warehouse and Data Mining:

A Data Warehouse and decision support system is the core of CRM. Model is

currently being used by banks worldwide is 400. Garanti Bank Data Warehouse stable

operating system and intermediate sources, a partial preprocessing of raw data

obtained from two populations.

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Figure2.3.3.The process of Relational Marketing

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Demographic data of customers, Product proprietary data and transaction data or, more

generally, risk and profitability, as well as data on product usage data. Today was the

recent historical data monthly average depth is 36 months starting 12/31/2001 to

01/01/1999. The new data are produced, they are preprocessed and an intermediate

warehouse to analyze the significance stems from Figure 2.3.3 are placed temporarily

inside, which moved into the warehouse. CRM group such as campaigns, analyzes the

results obtained and the design process advanced promotions, special marketing

initiatives, plans etc.

To reach customers through multiple channels used by the Bank are implementing

schemes. The results of the evaluation or full circle. Bank Customer Relationship

warehouse have become an integral part of the explanation of the results. OLAP (On-

Line Application Programming) Web versions are Developed through analysis of the

business object. Figure 2.3.4 shows the general structure of relational marketing

activities.

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Figure 2. 3.4

Relational marketing process supported by many software packages

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Relational marketing process multiple software packages supported by the bank's

information system is a computing infrastructure are integrated with. Analytical Data

Mart Data Warehouse will get through the next step:

1) Raw data processing:

• Data Selection

• Data Extraction

• Data verification and modification Variable

2) Data modeling and preprocessing:

variable selection, a new variable, variable data, creating variable

discretization. Based on the analysis of traditional Data processing, is

strictly dependent on the process of investigation, Creating new variable,

for example, more expressive variables contained in the raw data is

intended to aggregate information. Variables based on distribution of the

original variables discretization, better the physical reality of the problem

under investigation, expressed intended to generate categorical variables.

Customer focused and analytical data mart contains

Include the following data:

• Demographic (age, gender, cultural level, marital status, etc.)

• Bank Owned Products /Services

• Products / services utilization (balance, transactions, etc.)

• Global variables: benefits, costs, risks, assets, Liabilitis

• Bank section, portfolio, etc. With respect

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Figure 2.3.5 The marketing campaign process and software this support.

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2.4. Concept of CRM:

R.K. Mittal & Rajeev Kumra (2001) developed the concept of CRM, when viewed

in the context of e - business; it essentially deals with customer contact management

on the web, e-CRM, transformed into.

2.5. CRM processes:

According to Judy Strauss (2006), It is not a different solution may be why a CRM

application, But should integrate and optimize all processes in all departments. This

way, the bank can put these processes in the center of attention. Today, banks and

automated process-oriented, integrated and synchronized processes are running.

Enables. Operating in this way, to continuously improve customer satisfaction can be

used.

2.5.1. Customer life cycle:

The customer life cycle starts with such as:

• Your advertising, direct mail, and other marketing activities, what attracts them?

• What product benefits they are seeking to achieve?

• Product features can provide your product to them that give confidence to those who

benefit?

• Which marketing activities to attract inquiries from people buying the most

effective?

• Customer size will attract them to your company that does vary with the type of

marketing tool?

• How long awareness, education, evaluation, procurement, and re-order stages of the

life cycle stages?

• To provide customer service costs vary according to the vendor who sold the

property?

• Each customer acquisition costs of marketing, sales area, customer type, and product

type are you?

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It's not just buying a product requires understanding the needs and motivations, but the

whole customer / vendor experience. A chance visit to a potential vendor's Web site

today, when the product is an important part of evaluating and purchasing experience.

How to find a web site

2.5.2. CRM merits:

CRM merits are given below:

i. Value

ii. retention

iii. Satisfaction

iv. Loyalty

v. Cost to serve.

2.5.3. CRM Technology:

New technologies enable firms to implement CRM by:

• To provide greater insight into individual customer

• Firms to respond effectively to individual needs, allowing

• Integrating individual clients around the firm's business process

2.5.4. Practice of CRM:

Norudin Mansor (2003) discuss that with the practice of CRM it provides greater

momentum for the management to monitor interaction between customers and the

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institution. It is through CRM that allows employees to instantly extract the

information from the customer related to any transactions involved by extracting the

first hand information through proper investigation or asking them directly. For any

companies that seek for competitive advantage and maintaining their survival, effort

should be taken to define the goal of implementing CRM. Among the competitive

advantage that needed serious attention include:

• Increasing customer loyalty,

• Better service,

• Excellent information gathering,

• Formatting and share knowledge Organizational learning

• Consistent enculturation.

Customer relationship and discuss the quality, measuring identity, as well as operation

(business) level and at the national level as the global economy presents special

problems in analyzing both. Each of the steps above usually has its own way of

dealing with them. To resolve the above issues in a way some of the dilemmas

competitive conditions, customer relations, and the link between qualities and to make

it more clear. Positioning statement on the nature and amount includes and customer

needs (demand) and wants variety and quality of security in the competitive

market.CRM process of learning in the comments and feedback on any of the services

rendered through product and customer information must be included with the

collection.

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2.6 CRM Components:

Mohammad Almotairi (2009) discuss that CRM Researchers, however, are closely

related to these different definitions have evolved detention. Is a general acceptance

among researchers classification of CRM Components. Technology, people, culture

and business relationships, and processes: CRM consists of three major components.

Contribution for CRM implementation varies according to the level of each

component.

• Technology:

Technology company, to collect, organizes, save, and demonstrates its customers

about computing capabilities allowing the use of data. Classified technology to gather

support for the CRM system to achieve its objectives, saving customers valuable data.

Allow customers with a better relationship to develop customer behavior a

comprehensive approach by providing integration technology organizations. An IT

organization, such data warehouse, software optimization, to integrate Process

automation, help desk and call center, and Internet Concepts should be addressed in

effect.

• People:

Employment and customers are an important factor for successful CRM

projects.

• Business Process:

Relationship Marketing CRM is a business strategy that has its philosophical basis.

Centered Approach - CRM Customer Success requires a change to business processes.

This way both directly and indirectly all business processes analysis and evaluation

should be interacting with customers as well. Marketing, Sales, and Service: CRM

implementation should be addressed in core business processes.

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2.6.1 Key Customer Focus:

The main element of this Dimensions, customer-centric marketing, customer lifetime

value identification, personalization and interactive marketing consist of co creation.

2.6.2 CRM organization:

Therefore, companies in view of the organizational challenges inherent in any CRM

initiative should take. CRM successfully organize the entire company around the

following key considerations are in order: resources, Organizational structure,

organization-wide commitment, and Human Resource Management.

2.6.3 Knowledge Management:

According to the organization for a knowledge-based approach, the primary argument

for the existence of a firm to build knowledge, transfer, and application. A CRM

perspective, empirical studies of consumer data that can be learned from experience or

knowledge Preevies. Knowledge and accountability of education and knowledge,

including knowledge generation, dissemination and sharing key elements.

2.6.4 Technology-based CRM:

Accurate customer data is necessary to perform a successful CRM. As a result, CRM

technology has an important role in connecting intelligence firm.

2.7 Customer Relationship Management (CRM) strategy:

Iftikhar Hussain (2009), now days, Customer relations is very important that the banks

have realized Factor for success is developed. Customer Relationship Management

(CRM), Long-lasting relationships with their customers and increase their Revenue

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and profits is a strategy that can help. CRM in the banking sector is of greater

importance. In this study, practical customer relationship management that includes all

the essential elements of the CMAT (Customer Management Assessment Tool) model

is used. Data Pakistan's three major banks (HBL, MCB, and Citibank) are collected

through questionnaires. .

CRM client for selling goods and services involves the use of knowledge acquisition

and analysis. Since the 1990s, academics and practitioners are taking keen interest in

CRM professional adoptability.

2.7.1 CRM strategic capabilities:

Izah Mohd Tahir (2011) discussed about CRM company in developing a

relationship-oriented organization and the changing role of senior manager wants to

improve his performance. Shows. CRM companies will change your perspective on

how to create a company focused on providing the best value. Today, strategic

capabilities rather than specific strategies for companies to focus on what is most

important. The first author of the best companies to adopt CRM technology, but a

balance of strategic CRM implementation approach has been developed. There are

four main CRM strategic capabilities:

• CRM technology support;

• People management skills that CRM

• Abilities and attitudes, values and corporate use and satisfaction with our

mutual customers use to search the negotiation process;

People, Technology and Knowledge Process: Four CRM capabilities are strategic.

Access key criteria for selection of bank branch locations and parking space followed

by four factors including, banking or ATM locations nearby or reputation first

technique, called Identify. The third important factor is the fees, costs, and debt is

financial gain. Bank staff friendly and welcoming staff or customer contact in the bank

example is the least important factor.

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2.7.2 CRM customer value and performance:

Izah Mohammad Tahir (2011) In their study, namely Key customer focus, CRM

organization, knowledge management and technology-based CRM and CRM

identified four dimensions. price was employed five dimensions of satisfaction:

• Price fairness;

• Reliability of prices;

• Transparency of prices;

• Relative value, and

• Price-quality ratio.

Today, many automated teller machines, telephone banking, story, variety of banking

products such as banking and Internet banking.

2.7.3 Effectiveness of CRM strategies in banks:

Izah Mohammad Tahir (2011) influences On the banks of the effectiveness of CRM

strategies variables examined. These variables related to the attitude of bank

employees, were two-way communication capability and knowledge. Bank staff for

their work, response, reaction, or behavior reflects the attitude displayed. Affected

products and services to customers and banks, knowledge about the relationship

between the bank employee. The best approach to increase their knowledge workers

should be given the award as an inspiration.

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2.8 Implementing a CRM strategy:

Adele Berndt (2005), for the success of any strategy is applied to it, with which

success is determined. This is also true in the case of CRM strategies. CRM

Implementation organization and associated business processes should be in place to

facilitate Success.

2.8.1 Benefits of CRM strategy implementation:

To gain tangible and intangible benefits can be divided achieve CRM. There are

tangible benefits:

• Increase profits.

• Accelerate time to invest.

• increase in Labor productivity.

• Reduce marketing costs.

• Customer Relationship Rates

• Reduce marketing costs.

• Customer Relationship rates rise.

• Marketing to achieve higher returns on investment.

Intangible benefits are:

• To achieve customer satisfaction.

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• Increase the effectiveness of word of mouth.

• To enhance the quality of services provided to customers.

• Processes become more easily.

• The quality of the communication channel.

• Excellent customer segmentation.

• Need to better understand

• Gap, the organization provides, and reduces the customer's expectations.

• Customer satisfaction is the expected result.

2.9. Its impact on customer loyalty and customer behavior:

Now the question arises: first, customer satisfaction, customer loyalty is achieved or

what? World (WOM) was supported by.

The third hypothesis and evidence in support of acceptance forms., Customer loyalty

as well as good ratings, reviews, or testimonials can build them as motion, Friends,

family, neighbors and adding a product to show special group of customers by offering

a great service to loyal customers, favorable word-of-mouth (WOM) promotion.

He (Marx and organization), too, because loyal customers, brands and organization

will play the role of the hidden market, have become part of your mind and memory.

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2.10 Benefits of CRM:

Successful CRM implementation is reasonable based on the following benefits:

I. Increased sales revenue

II. Increased Win Rates

III. Increased margins

iv. Improved customer satisfaction ratings

V. reduction in general sales and marketing administrative costs

CRM benefits are going to the following:

• Develop better communication channels

• Collect customer-related data

• Create detailed profiles of individual customers

• Increased customer satisfaction, customer accounts, orders and customer

information access to information on all touch points.

• Identify new sales opportunities

• Increased market share and profit margin

• Increased Revenue

• Access and More Effective Marketing

• Improved Customer Service and Support

• Improved response time to customer requests for information

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• Enhanced Customer Loyalty

• Improved ability to meet customer

Heba Sadek (2001) consider that a significant change from an industrial society to the

information being witnessed in recent decades. According to several authors, it is

derived from significant economic and social impact, the changes promoted by the

information revolution is equal to the previous revolutions. The revolution again is

important for companies to add resources. Such Equipment, raw materials, human

resources, energy, digital

Intangible resources such satisfaction, customer loyalty, market brand image, customer

revolution emphasis in the industrial revolution of knowledge, know-how, etc.,

tangible assets was at the stars. Its success guiding these assets, the company can

provide a significant competitive advantage.

2.10.1 Importance of CRM:

Improve the quality of customer service, beautiful care, lack of stress in terms of

customer benefits of CRM are money today, the price increase `CRM Customer

Empowerment ultimate solution for both the customer is becoming as , is a highly

competitive business world, organizations as well. Any organization that he loses his

clients should have a clear idea as to why. It is active and the only way to avoid or at

least will tell. CRM approach from the point of view of organizations has attached

great importance to the following:

• Reduction in customer recruitment costs

• Generation of more and more loyal customers

• Expansion of customer base

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• Lack of advertising and sales promotion expenses

• Clients benefit selectivity approach

• increase the number of profitable customers

• Easy business expansion possibilities

• Increased customer partnerships etc.

2.10.2 Scope of CRM:

Understanding customer relationship management and lack of standardization is

always a concern in the service sector. With the new concept of CRM failure to

promote learning organization in the spirit of the times has left the organization

disabilities. Through analyzing the differences are many, many demographic

indicators were tested against the implementation of CRM.

Two conditions associated with loyalty, customer retention, and there are other

customers total stake. Client creates moments of truth with customer service, and these

services should be managed by the organization encounters.

Mohammed Almotairi (2009), according to different perspectives (technical) (tactical)

is used to define the broad definition of CRM CRM, narrow definition of convergence

possible to refer to the common definition. However, in two areas of CRM, marketing

and information technology studies to define the width may be the result of the

emergence of a new concept. On the other hand, the broad definition of CRM, CRM

focuses on strategic orientation. Customer relationship management: for example, a

CRM primarily as a strategic business process that includes the following components

rather than the issue of technology.

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Therefore, integrated management of CRM Success factors and CRM components lie

in the realm of control.

2.11. Generic Strategic Framework:

customers willing leadership, differentiation and focus) to address specific customer

centric strategies within an industry or consist of small groups.

2.11.1 Challenges of Implementation of CRM:

Babin Pokharel (2002) whilst implementing CRM can be summarized as followings

many challenges banks face the discussion:

• Management is sponsoring

• Customer data quality

• Point alignment (alignment of people and processes)

• Shortage of skilled people

• Determine the exact needs of the customer

• Using customer data more intelligently

• Customer data and customer data base contains the Customer Preferences

• Use the correct technique

• Degree view of all customer channels of real-time data

Degree view of the customer (customer's own view) - 360 after the competition in

retail banking markets are saturated. To satisfy customers and quickly adapt to

changes in competition, banks are forced to find new ways. Banks are also competing

among themselves on the field is a major domestic players. CRM is one of the these

trends has been adopted by many banks. Can be attributed to the emotional link with

customer specific communications capabilities, is set. The philosophy that deals with

highly Banks organizational learning and adaptive culture.

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2:12 effectiveness of CRM in banks:

Banks increase in customer base, and so the customer has the option to select banks.

This is just the beginning of the story. Forcing Because of competition, public sector

banks and tech-savvy are becoming more customer-centric. Thus, the non-traditional

competition, market consolidation, new technology, and the proliferation of the

Internet is changing the competitive landscape of Hell retail banking industry. Today's

Retail banking sector is characterized by:

• Multiple products (deposits, credit cards, insurance, investments and securities)

• Multiple channels of distribution (call center, branch, internet and counter)

• Considered as many customer expectations groups (consumer, small business,

and corporate) that bank customers today

• Services at affordable prices

• "anytime, anywhere" Services

• Personal Service

The banks products and services and almost no increase in the number of switching

costs to find better services and products, customers are able to easily switch banks.

Banks harder To get new customers and retain existing customers and Importantly get

to.

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2.13 "customer lifetime value" and "share of wallet":

Traditionally, the Bank's customers for our clients customer equity, which means the

monetary value depends, should be fixed value. Bank and Bank of CRM strategy and

vision focused on serving the needs of customers from all CRM processes are

extracted. Through CRM, the bank better suited products and can provide customers

with Customized services. To do this, banks must know their customers and their

needs.

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Figure2.13 Traditional Banking vs. Relationship Banking

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Through the active use of CRM systems, Raiffeisenbank is Kleinwalsertal:

• To be customer-oriented rather than product-oriented

• Better compete with banks offering similar products

• Such insurance, banking industry, as players compete with the new market

segments

• Increase sales and marketing effectiveness

• Increase customer loyalty and retention

• Win new customers

Two other CRM systems rely on Microsoft CRM software before switching

Raiffeisenbank Kleinwalsertal.

Messaging and collaboration client such as Microsoft Outlook ® interoperability with

the Microsoft Office programs such as

• A familiar user interface similar to Microsoft Outlook

• Using Web services to integrate core banking Applications

• Better price performance and total cost of ownership

• Ready-to-use solution for vertical Banking

• And reducing time to deployment