1

CHAPTER 1
INTRODUCTION

CHAPTER 1: INTRODUCTION
BANKING IN INDIA
The first bank was established in 1923. Till today, the banking industry is
divided into 3 distinct phases:
A. 1786 to 1969- the first part
During the initial part, the development was slow and banks suffered periodic
failure thanks to lesser confidence of public. There have been around 1,100
banks and to contour their functioning and activities, the Government of India
came up with the Banking Regulation Act, 1949. The Reserve Bank of India
(RBI) was given intensive powers for the supervising of banking in India.
B. 1969 to 1991- Nationalizing banks and banking sector reforms
After Independence, the govt. implemented initiatives in banking sector. In
1955, the Imperial Bank of India was nationalized and commenced to supply
wide-ranging banking merchandise and services. The govt conjointly created
the bank of India, to handle banking transactions of the Union government and
state governments across the country.
In 1959, seven banks were nationalized and they became branches of the bank
of India. In late 90s 14 industrial banks within the country were nationalized. In
the second part of this phase, seven more banks were nationalized. With this,
80% of the banking sector in India came under the govt possession.
C. Reforms after 1991- New part of Indian banking system
As a part of the reforms method, this part introduced new products and facilities
within the banking sector. In 1991, a committee was created, under the
chairmanship of M Narasimha to figure for the relaxation of banking practices.

Efforts are being put to supply satisfaction to customers, Phone banking and
internet banking to name a couple of. The complete system became simpler and
swift with cash transactions similarly.
CUSTOMER RELATIONSHIP MANAGEMENT
Today, the banks ought to work keeping in mind the position of the monetary
market and anticipate change within the market place and prepare themselves
consequently. As a strategic weapon, they're creating new resolutions to make
additional on their own strengths to explore new avenues of customers
Relationship Management.
Retention of previous business, similarly on seek for new one- CRM is that the
solely choice. From few years, the banking establishments are noticing the
important want of putting up greater thrust on this initiative for raising their
businesses.
Banks are currently realizing one amongst their best assets for profit growth in
rural and semi-urban arrangement, is customer relationships and its retention,
particularly in a very developing country like India. However, to create best use
of this resource, the banks have to be compelled to convert their branches from
dealings process centers into customer-centric service centers. This can win
bottom line business edges by holding the customers-the Most Profitable
quality.
Branches may even be accustomed inform and educate customers regarding
alternative offerings i.e. to advise and sell new monetary instruments like
shopper loans, insurance merchandise, investment firm merchandise, etc.
There is associate increasing realization among Indian banks that it not pays to
own a "transaction-based" operative model. Active efforts are on to develop a
relationship-oriented model of operations specializing in customer-centric
services.

The biggest challenge our banks face these days is to ascertain customer
intimacy. Else, all alternative efforts towards operational excellence are
purposeless. The banks currently have to be compelled to guarantee through
their services that the purchasers stick with them as a major chunk of financial
gain for banks comes from existing customers, than from new ones.
Customer relationship management (CRM) solutions, if enforced and integrated
properly, will improve customer satisfaction levels. Information deposit will
facilitate in providing higher dealings experiences for patrons as information
deposit helps in transfer all the transactions returning from totally different
channels beneath an equivalent roof. Data processing helps banks analyses and
live customer dealings patterns and behavior. This all will facilitate plenty in up
service levels and finding new business opportunities.
IMPORTANCE OF CRM IN INDIAN BANKS
For long, Indian banks were beneath assumption, that their functioning was
centered on customers, just because that they had customers. These banks
dominated and were protected by laws that didn't permit free entry into the
world.
As one of the foremost rising market destinations, India can see foreign banks
are available in, grow and acquire. With the banking sector was gap up, they'll
endure by subsidence in quickly with the new rules of the sport, thereby posting
profits. For them came government bonds- associate sudden bonanza, during
which folks could massively invest.
Therefore, it's vital that Indian banks perceive this reality and re-focus on their
core quality the customer. Specializing in customer Relationship
Management (CRM) is that the solely approach the industry will shield its
market share and boost growth.

CRM would conjointly create Indian bankers notice that the aim of their
business is to "create associated keep a customer" and to look at the complete
business method as an integrated effort to get, create, and satisfy customer
wants.
Customer Relationship Management (CRM) within the Indian industry is key
factor in building a customer-centric organization. CRM links customer
information into one and logical customer depository. In banking, it's a key
component that permits a bank to develop its customer base and sales
capability. The target of CRM is to manage all aspects of customer interactions
in a very manner that permits banks to maximize profit from each glad
customer.
Increasing competition, liberation, and also the web have all contributed to the rise
in customer power. Customers, thus, visage with associate increasing array of
banking merchandise and services, expect a lot of from banks in terms of made-toorder offerings, engaging returns, easy accessibility, and clear dealings.

Retaining customers could be a major concern for banking establishments that

underscores the importance of CRM. Banks will flip customer relationship into
a key competitive advantage through strategic development across a large time.
CRM could be an easy philosophy that places the customer at the center of a
business processes, activities and culture to boost customers satisfaction of
service and, in turn, maximize the profits for the organization. A winning CRM
strategy aims at appreciating wants of the customer and integration them with
the organizations strategy, folks and technology and business processes.
Therefore, one in all the best ways that of launching a CRM theme, is to start
out with what the organization is doing currently and dealing out ways that to
boost its interface with its customers.

CLASIFICATION OF CUSTOMER RELATIONSHIP MANAGEMENT

(CRM) SYSTEMS
Customer Relationship Management is often classified as under:
Operational CRM
Front-office business processes, wherever direct interaction with customers
through phone, fax, e-mail, etc. takes place Operational CRM comes into play.
The main points of each interaction with customers, as well as their necessities,
preferences, topics of dialogue etc., are kept within the customers contact
history which may be late retrieved, upon demand.
Analytical CRM
To analyze customer information generated by operational CRM applications,
perceive the customers behavior, and derive their true worth to the
organization. We have a tendency to use analytical CRM. This helps to
approach the purchasers with pertinent info and proposals to satisfy their wants.
Analytical solutions provided for many firms are integrated read of customer
across all channels and applications, campaign performance analysis, customer
profit analysis, cross-selling and up merchandising. Examples are information
deposit, on-line analytical process (OLAP), and data processing systems.
Collaborative CRM
For collaboration with customers, suppliers, and business partners and, thus,
enhancing sales and customer services across all the selling channels
cooperative CRM is employed. Its major goal is to boost the standard of
services provided to the purchasers, thereby increasing the purchasers loyalty.
It conjointly permits the corporate to synchronize and manage economical,
productive interaction with customers, prospects, partners, and internal
associates across all communication channels. The customers' viewpoint is

taken care of at each dealings level therefore sanctioning higher service.

Cooperative CRM conjointly reduces net service prices by sanctioning net
collaboration. Samples of cooperative CRM applications are partner
relationship management (PRM), customer self-service and feedback, etc.

SELECTED BANKS FOR THE STUDY

Punjab National Bank
Punjab National Bank (PNB) is associate Indian monetary services company
primarily based in national capital, India. PNB is that the third largest bank in
India in terms of quality size. Established in 1895 as a personal financial
institution, it is presently the second largest state-owned depository financial
institution in India
CRM and PNB
Customer 1st PNBs CRM computer code presently employed in 1650
branches is additionally serving as their name for his or her numerous product
offerings the answer contains of modules for business prospect management,
lead management, activity management, product management, campaign
management, and business intelligence news.
Allahabad Bank
Allahabad Bank began operations in 1865; with head-quarters in urban center is
that the oldest joint stock bank in India. Supported in Allahabad in 1865 and as
of currently has over 2500 branches throughout India. Conjointly features a
branch in Hong Kong and a representative workplace in Shenzhen.

State Bank of India

State Bank of India (SBI) is a multinational bank services company of India. A
government-owned corporation headquartered in Mumbai, Maharashtra with
assets of US$388 billion and 16,000 branches, as well as 139 foreign offices,
makes SBI, the most important banking and monetary services company in
India. The bank traces its ancestry to British India, through the Imperial Bank
of India, to the institution in 1806 of the Bank of Kolkata, creating it the oldest
depository financial institution within the Indian landmass.
SBI is a regional banking behemoth and has 2 hundredth market share in
deposits and loans among Indian industrial banks.
Canara Bank
Canara Bank is associate Indian state-owned bank headquartered in city,
Karnataka. Established in 1906, collectively of the oldest banks within the
country, the bank features a network of 3564 branches and 4000 ATMs unfold
across India. Wide proverbial for customer centricity and established in 1906, at
Mangalore, the bank was nationalized in 1969.
Today, geographical region Bank occupies a premier position within the
concord of Indian banks with associate unbroken record of profits since its
beginning. The Bank was stratified at 816 within the Forbes world 2000 list.
Bank of Baroda
Bank of Baroda is an Indian state-owned banking and monetary services
company headquartered Vadodara. It offers a variety of banking merchandise
and monetary services to company and retail customers through its branches
and thru its specialized subsidiaries and affiliates within the areas of retail
banking, investment banking, credit cards, and quality management. With a

complete world business of 8,021 billion as of 31 March 2013, makes it the

second largest Bank in India.
In addition to its headquarters in its home state of Gujarat, it's a company
headquarters within the Bandra, Kurla complicated in metropolis. Supported
2012 information, it's stratified 715 on Forbes world 2000 list. Its a network of
4283 branches (out of those 4172 branches are in India) and offices, and over
2000 ATMs.
The bank, alongside 13 alternatives major industrial banks of India, was
nationalized by the govt of India and has is known as a profit-making public
sector unit (PSU).
CRM at Bank of Baroda
Technology-based CRM: Technology plays the role of enabler in CRM
preparation. It permits Bank of Baroda to attain larger customization and higher
service at lower price. This helps in higher customer identification and quick
and convenience services to its customers.
Customer Loyalty Programs targets to be a customer centric organization and
build a good and long run relationships with its customers. It has four loyalty
cards supported worth of the purchasers like Pt, Gold, Silver and Bronze
thereby serving to in distinguishing the foremost valuable customers and
effectively coming up with the customers wants
Syndicate Bank
Syndicate Bank is one in all the oldest and major industrial banks of India. The
bank, alongside thirteen major industrial banks of India, is currently a
nationalized bank with a beginning capital of 8000 rupees. The primary branch
of the bank started its operations in 1928 at Udupi, in Dakshin South Dravidian

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district in Mysore state. By 1937, it secured its membership as a financial

organization at metropolis.
Yes bank
Yes bank is a personal bank in India headquartered metropolis. It absolutely
was supported in 2004; Yes Bank deals in company investment services. This
involves providing monetary recommendation to customers- company or
individual. Yes Bank conjointly competes within the South Asian industrial
banking market.
Commercial banking is equivalent of retail banking for industrial entities,
however is costlier and accounts yield less interest as company corporations do
not regard earning interest as a serious element of their want for banking
services. As of currently the bank had 430 branches and 951 ATMs with a
record size of agency 991 billion.
IndusInd Bank
Established in 1994, IndusInd Bank restricted could be a metropolis primarily
based Indian new generation bank. The bank offers industrial, transactional and
electronic banking merchandise and services. because the 1st among the newgeneration personal banks in India with its operations and a capital quantity of
Rs.100 large integer (Rs.60 large integer was given by the Indian Residents and
Rs.40 large integer was raised by the Non-Resident Indians), the bank has
specialized in retail banking services.
The Bank upgrades its support systems by introducing newer technologies like
CRM on its ever increasing network of branches all across the country thereby
meeting the worldwide benchmark.

11

With 441 branches, and 796 ATMs unfold across the country with two
representative offices, in London and port, IndusInd Bank has metropolis with
the utmost variety of bank branches followed by national capital and Chennai.
Kotak Mahindra Bank
Established in 1985, it absolutely was antecedently called Kotak Mahindra
Finance restricted, a non-banking monetary company. In 2003, Kotak Mahindra
Finance Ltd, tally approved the license to hold on banking business. Its the
primary company within the Indian banking history to convert to a bank.
Currently, it's over five hundred branches, over 1,000 ATMs and a consolidated
record of approx. US$ 2.9 billion. The Bank has its registered workplace at
Nariman point, Mumbai.

RATIONALE OF THE STUDY

Indian banking has come back an extended approach from tiny banks in hand
and managed by choose industrial homes to modern-day professionally
managed banks with customer centricity each publicly and personal sector.
With the arrival of latest age banks like HDFC & ICICI banks in Nineties,
public sector banks with their typical lack-luster ways that of functioning, felt a
brand new threat to their existence.
Private sector banks led to a paradigm shift within the approach, customers
were repaired by introduction of computer code primarily based customer
relationship management (CRM). As a result, public sector banks were forced
to follow the suite by taking CRM initiatives. Therefore CRM has become one
in all the foremost talked regarding tools for customer acquisition and retention.
There are divergent views regarding seriousness with that Indian public sector
banks have enforced the CRM initiatives.

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This study aims to seek out the customer perception regarding the CRM in
select public sector and select personal sector banks and its effectiveness in
customer acquisition and retention.

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CHAPTER 2

REVIEW OF LITERATURE

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CHAPTER 2: REVIEW OF LITERATURE

The numerous analysis papers and articles studied for the report highlighted the
subsequent problems associated with the customer relationship management
being practiced at various organizations:
1. CRM- A strategic tool
The study of the literature on the market raised several problems associated with
CRM; however the foremost necessary issue is that the treatment of CRM as a
strategic tool which will be useful in formulation of policies associated with the
purchasers. Dr. Nishikant Jha And Prof. (Mrs.) Shraddha Mayuresh Bhome
(May 2013), have done "A Study Of CRM-As A Strategic Tool Adopted By
Banks With reference to Axis Bank In Thane city." The study was conducted
through survey questionnaires that were filled by the customers of the Axis Bank.
The study of the paper showed that the purchasers of the bank were pleased with
the type of services provided by the Axis Bank at Thane town and conjointly that
the staff of the bank knew their job well. Within the finish few suggestions are
provided by the researchers to create operating of the bank less difficult and
satisfying for the purchasers. The result was diagrammatically shown through piecharts and bar-graphs. Similarly, Dr. Richa Raghuvanshi And Rashmi Tripathi
(2012) in their analysis paper Customer Relationship Management As A
Strategic Tool in the Indian Banking Sector: A Case Study Of Axis Bank At
Lucknow aforementioned that Indian Banks are realizing that for attaining success
in a very competitive setting, they need to specialize in maintaining relationships
with customers. The most purpose of this study is to research whether or not banks
are extremely CRM as a way of securing competitive advantage or not. These results
were mentioned associated analyzed get an insight of however so much CRM is
strategically used to secure competitive advantage. The analysis style of this study is
exploratory research and totally different

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aspects with regards to CRM within the banking sector are extracted from
literature review.
2. CRM- influential in selecting banks in India
The second most significant issue that was identified was the influence CRM has
on people whereas selecting banks in India. Ajit Kumar Sahoo And Rashmita
Sahoo (April 2013), studied the role of "CRM In Indian Banking Sector",
through co relational analysis. They studied six different banks namely: SBI,
ANDHRA, ICICI, IDBI, CITI and HDFC. They conducted a study in accordance
with the subsequent hypothesis:
Ho: there's no vital influence on somebody within the selection of bank.
H1: there's vital influence on somebody persons within the selection of bank
According to the study, that followed, there happened to be 3 major factors that
had influence on an individual's mind while selecting the bank. Those 3 factors
were: quality service, effectiveness of selling program and convenience in
dealings.
Quality of service emerged because the 1st issue for choice of bank brands by the
respondents of SBI, Andhra Bank and CITI Bank,
Effectiveness of selling Program emerged as the issue the choice of the bank by
the respondents of IDBI and HDFC Bank.
Conveniently of dealings emerged because the most significant issue for the
choice of bank employed by the respondents of ICICI Bank.
3. Classification of CRM and managing CRM
Yatish Joshi And Ehtesham Ahmad (June 2013) in their paper "Customer
Relationship Management In Banks", have studied CRM through secondary
information provided by numerous researchers. They need talked regarding the

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varied styles of CRM: Operation, Analytical and collaborative. They need

conjointly mentioned regarding the requirement of CRM in managing the
customers, however will CRM be useful to the banking industry and also the
numerous success factors of CRM. They have explained however will the
methods of CRM be enforced and integrated with success within the banking
selling management. Some points from the paper are as follows:
Motivate customers for generating contacts and increasing revenue.
Understand customers wants.
Increase customer retention by increasing customers satisfaction.
Use technology to boost customers service. This will increase customer
differentiation and helps to deliver distinctive customer interaction.
Use CRM to create operating, customer-employee friendly.
Ensure that all staff is collecting the data on the CRM system.
4. CRM- Boundary-less organization- Relationship for banking
Dr. Shirmila Stanley (November 2012), in her paper, "New perspectives in the
Banking Sector-The CRM Way" studied the banks as boundary less
organization operating 24*7. She conjointly told that the banks of these days trust
more on the merits of "relationship for banking" for achievement. in step with her
study, CRM has become a brand new tool in service management, that is each
relationship primarily based & info intensive.
Banks are compelled to differentiate themselves by giving added service and
building long-term relationships with their customers. The CRM program should
be embraced and promoted by top management and supported with robust CRM
ensure guarantee organization wide success.

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She has also mentioned the seven Ps of the marketing management that are
evolving as a result of the combination of CRM within the working of the
organization. last she powerfully mentions the requirement of support from the
highest management for promoting CRM methods to achieve more customers and
provide satisfaction to the customers.
5. CRM- customer Satisfaction, customer Loyalty and customer worth
Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), in the paper,
"Customer Relationship Management And customer Loyalty: A Survey in the
Sector Of Banking," studied the CRM methods and their impact on customer loyalty
within the banking sector. They observed that a lot of glad the customer is, more is
his loyalty towards the organization and more is the revenue generated.

An advantage of a loyal customer is that with him he brings on new customers,

who if serviced satisfactorily could end up being loyal customers of tomorrow.
Throughout the study the varied findings led to the formation of the subsequent
flowchart:

Forming
databas
e

custom
er

Learning customer
needs
and complaints

solutio
Producing ns
peculiar to the
problem

Customer Relationship Management

Customer Satisfaction

Customer loyalty

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Padmaja R (2010) in her analysis paper A Study Of customer Relationship

Management In Banks With Special Reference To Bank Of India,
Hyderabad, studied these days customers' buying choices aren't primarily based
on the standard of the product however conjointly with the link they need with
the corporate.
In today's world, we have a tendency to do business with people or teams whom
we may never meet in future and hence much less is understood personally to
person sense. customer Relationship Management is regarding about the texture
of comfort during this high technical school setting. This paper focuses on the
role of customer Relationship Management in banking sector and also the want
for CRM to extend customer worth in banks with special regard to Bank of India,
Hyderabad.
6. CRM- Levels of Service Quality
G.S.Popli and D.N.Rao (2009) in their paper Customer Relationship
Management In Indian Banks talked regarding the service quality level being
provided by the banks. The study suggests that in case of the personal Sector
Banks, all the scales of service quality have scored higher values compared to the
general public Sector Banks. It conjointly shows that personal sector banks are a
lot of winning in implementing CRM methods. It conjointly points towards the
very fact that the chosen banks are ready to enhance the service quality for his or
her customers, creating them a lot of customer-oriented.
7. Influence of attitude, knowledge and skill on CRM
Monal Deshmukh (October 2012) in her analysis paper "Customer
Relationship Management In Indian commercial Banks" studied CRM
implementation on customer happiness and business performance.
A study of commercial banks of India reveals that CRM implementation is
connected with customer satisfaction and business conductance. it's unconcealed

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that frequent rate of going in touch with customers and recovery of services will
increase retention of customers. Attainment, regular contact and analysis of
customers direct towards improved customer loyalty (by repeat purchase, positive
word of mouth publicity) and employee sentiments. in an administrative purpose
of view, this analysis provides an overview of the impact of CRM efforts on the
magnitude of customer satisfaction and apparent business conductance.
8. CRM- A rising concern
Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013), researched on
"Customer Relationship Management As a corporate Strategy In Indian
Banking Sector: A Comparative Study of private And Public Sector Banks."
Their paper aims to research the aspect of criticism handling within the space of
CRM in banking sector in India. the most problems with discussion within the
paper are numerous styles of issues visaged by customers in each the public and
private banks, the frequency of making complaints and reasons for not making
complaints and also the expectation levels of customers in handling complaints.
The paper has primary information. It identifies behavioral factors that are related
to criticism problems within the banking services of public and personal sector.
The study is split into 2 parts: Pilot study and Main study. The results are
represented through bar-graphs. The study conjointly throws light on the key
areas of concern for the banking sector so as to take care of CRM as a strategic
tool:
Proper identification of activity concerns throughout a service interaction
Dealing effectively with enquiry connected system
Developing awareness tools
Training activity skills of staff
Proper development and implementation of criticism handling system.

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9. Impact of CRM on Firm Performance

Tim R. Coltman, Timothy M. Devinney, And David F. Midgley (2000) in their
analysis paper Relationship Of customer Relationship Management And

Firm Performance examined the impact of CRM on firm performance. The

strategic CRM is conceptualized as a operate of the organizations ability to guide
and enhance lower order capabilities that comprise physical assets, love it
infrastructure, and organizational capabilities, like human analytics and business
design. The results reveal a positive and vital path between a superior CRM
capability and firm performance. In turn, superior CRM capability is totally
related to human analytics and business design. However, the results counsel that
the impact of IT infrastructure on superior CRM capability is indirect and
altogether mediate by human analytics and business design. They jointly found
that CRM initiatives collectively action customer intimacy and diminution
trounce those taking a less balanced approach. Overall, this paper helped justify
why some CRM programs are additional prospering than others and what
capabilities are needed to support success. Their paper showed that customer
relationship management suffers once it's poorly understood, improperly applied,
and incorrectly measured and managed. This study exhibitionistic the mixture of
investment commitments in human, technological and business capabilities
needed to create a superior CRM capability. the precise extent of these
capabilities is existing indeterminate and can be guided by a strategic stress that
mixes shopper intimacy and operational excellence. By integration two colleges
of thought- capabilities and strategic emphasis- they have build lots of
managerially relevant theory of CRM performance that shows why CRM
programs are usually winning and what capabilities are needed to support
success.

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10. Influence of staff on CRM

C Rootman, M Tait & J Hieronymus Bosch (2007) in their paper The
Influence Of Bank Employees On Bank customer Relationship Management did
an intensive analysis in services marketing. This paper investigates the influence
of staff on the customer relationship management (CRM) of banks. the first
objective of this paper is to research the influence of elite freelance variables,
namely perspective and knowledge ability, on the CRM of banks. an empirical
investigation with a structured questionnaire was conducted. The sample
consisted of 290 banking customers within the Metropolitan area and also the
response rate was 91.03%. As a result a big positive relationship was found to
exist between each the data ability and attitude of bank staff on a bank's CRM.
These relationships imply that a lot of intensive data ability and a lot of positive
attitudes of bank staff ends up in improved, maintained relationships between a
bank and its customers.
11. CRM in Investment Banks
Fan Wang, Fang Hu And Li Yu (2010) in their paper The Application Of
customer Relationship Management In Investment Banks mentioned the
importance of CRM to the investment banks management. It compared the
appliance of CRM between domestic investment banks and also the foreign ones.
This study points out that whereas applying CRM, domestic investment banks
should clear their misunderstanding, base themselves on the purchasers center
and customers satisfaction, take economical measures to good CRM so notice the
increasing worth. They conjointly talked regarding the various CRM methods
which will be applicable in China.
12. CRM and customer Acquisition
Lawrence National Guard and Francis Buttle (2004), in their analysis paper
"Managing For winning customer Acquisition: associate Exploration studied the

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recent attention dedicated by consultants, lecturers and practitioners to customer

retention, customer acquisition. customer acquisition is of major importance and
demands attention because the 1st stage of the customer life cycle. there's a
powerful analytical, coming up with and management stress to the majority of the
up to date customer management literature. This stress is projected into analysis
hypotheses that specialize in the primary stage of the life-cycle-customer
acquisition. Especially, they examined (1) government responsibility, (2)
budgeting for customer acquisition, (3) data of the political economy of customer
acquisition and (4) the preparation of CRM technologies. In summary, 2
overarching social control implications are often drawn from this study. First,
firms are usually not very advanced in their management of the core CRM
activity of customer acquisition as indicated by the low level of adoption of
management practices like budgeting, planning, government responsibility and
also the application of CRM technologies. Second, having a buying deal set up
(or, indeed, putt a manager in charge) by itself isn't spare to get smart acquisition
outcomes. it's important to own a frenzied customer acquisition budget. The
dominant social control implication is that if senior management is actually
serious regarding customer acquisition, it ought to be mirrored in a very budget
dedicated to the task. Their analysis shows that solely then is excellence in
customer acquisition achieved.
13. CRM- issues and Challenges
Shahzeb Ali Malik and Trevor Wood-Harper (2002) within the study
"Customer Relationship Management (CRM) In The Banking Sector Of
Pakistan: Issues And Challenges found that CRM that has helped banks to
know the customers' current wants, what they did within the past, and what they
arrange to neutralize the long run to fulfill their own goals. though' most of the
banks within the developing countries such as: Islamic Republic of Pakistan,
India etc. have accomplished the importance of CRM and enforced it, the initial
investigations of the analysis show that quite variety of CRM goals doesn't turn

23

out needed results and in some cases CRM has broken customer relationships.
Therefore, this paper highlights the issues and challenges within the banking
sector of Islamic Republic of Pakistan mistreatment CRM.
GAP AREAS
The analysis papers and articles summarized higher than have talked regarding
the varied styles of CRM, its quality in banks and alternative organizations. They
need conjointly enclosed down the varied issue poignant the CRM in banks, its
customer-centric impact and its impact on corporations and also the levels of
quality of service.
Though few of the researchers have talked regarding the customer acquisition and
retention, however havent placed enough stress on these factors. These factors
hold the foremost necessary position in any organization as a result of customers,
today, have the facility to either create business successful or failure, therefore
knowing all regarding customers is of utmost importance. New customers rely
plenty on how you handle your existing customers, as a result of within the
banking sector heap many customers depend upon past customer experiences
before selecting any bank. Therefore retention of consumers is a vital issue that
has not been studied in nice detail in afore mentioned papers.

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CHAPTER 3

RESEARCH METHODOLOGY

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CHAPTER 3: RESEARCH METHODOLOGY

Research Problem
Today, customers are a very important factor in companies business
development, with the power of changing the fate of short term or long term
goals of the company. Therefore enough knowledge of their expectations and
desire is very necessary.
The researches done so far in this prospect do not focus much on the factor of
customer acquisition and retention in banks. This study deals with the impact of
CRM on customer acquisition and retention in focus. The study will describe
the objectives of CRM in customer acquisition and retention which is very
important for any bank for survival in todays competitive environment.

Purpose Of The Study

The purpose of the study is to find out the response of the customers to
customer relationship management (CRM) initiatives taken by select public
sector and private sector banks. The banks which are being considered for the
study are:1. Punjab National Bank
2. State Bank of India
3. Allahabad Bank
4. Canara Bank
5. Bank Of Baroda
6. Syndicate Bank
7. Yes Bank

26

8. IndusInd Bank
9. Kotak Mahindra
Research Objectives
The research objectives are as follows:
a. To find out the level of awareness in the customer of select public sector banks
about the CRM initiatives taken by these banks.
b. To find out the effectiveness of CRM in increasing the customer satisfaction
and loyalty in the select public sector banks.
c. To find out if there has been any positive impact on customer acquisition and
retention as a result of CRM initiatives taken by these banks.
Research Design
A combination of Exploratory and Descriptive research design would be used in
the research work. Exploratory research would be applied to identify the
customer preferences which attract them to opt for a bank for various services.
Research Question
Whether customer relationship management initiatives taken by select banks
has impacted their level of satisfaction or not?
Sampling Design
Sample (Participants): The sample for this research comprises of customers of
the select banks
Type of Sampling: Convenience and Snowball sampling would be used for the
study.
Sample Size: The sample size is 300 customers from six select public sector
and private sector banks.

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Data Collection
Data Type:
Data type proposed for the research is a combination of primary and secondary
data. The primary data would be collected through a detailed questionnaire,
which would be circulated in the proposed sample area and secondary data
would be collected through the thorough study of the research journals, reports,
whitepapers and cases previously published on the topic.
Research Instrument
A structured questionnaire will be used for collection of primary data. The
instrument would be tailored for the research based upon the objectives. The
instrument would be put through a pilot test for reliability testing through the
responses collected from 300 respondents.
Tools Used
The major tools used for analysis are as follows:
1. Descriptive Statistics: Bar graphs and Pie charts.
2. Correlation to find the type of relationships
3. Crosstabs to find the relation between two variables
Pilot Study
Validating Questionnaire through Pilot Testing: Pilot survey will be conducted
with the customers via internet and mails which will help to have incited to the
strength and weakness of questionnaire. The resold pilot survey suggestion
obtained from the respondents will help in making valuable and effective
changes in the questionnaire.

28

Procedures

Survey methodology seeks to identify principles about the design, collection,

processing and analysis of surveys in connection to cost and quality of survey
estimates. It focuses on improving quality within cost constraints or
alternatively, reducing costs for a level of quality. The entire study will be
conducted in three phases. In the first phase, the researcher will study the
various CRM strategies adopted by the select public sector banks in order to
acquire new customers and retain the old ones. In the second phase, the
researcher will try to find out the impact of the CRM strategies on customer
loyalty and satisfaction level and how do the customers perceive the impact. In
the third phase, the researcher will propose various ways through which the
relationship between customer and their banks can improve.
The following steps will be followed:
1. Visit to the select public sector banks.
2. Identify and select potential sample members
3. Contact sampled individuals and collect data from them
4. Evaluate and test questions
5. Tabulate the responses and performs various tests
6. Analyze the data and prepare inference out of the analysis

Limitations Of Research Methodology

1. Since the research will be conducted as an individual, a lot of money would not
be spent on the research.
2. There might be some respondents who dont fill the questionnaire or may
give leave some questions unanswered.

29

3. Time and reach will be major constraints as time will not permit to gather the
information from various types of customers from other branches of the same
bank as well as from other banks.

30

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

31

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

In order to ascertain the importance of CRM in banks, a study was conducted,

with a sample size of 352. To ensure effectiveness of the study and in order to
obtain a clear picture a questionnaire with 25 items was designed. The
responses were compiled on a data sheet and with the help of software, the
following results were drawn.
Table 4. 1 Detailed information about customers

Valid yes
no

Frequency Percent

Valid
Percent

Cumulative
Percent

280

79.5

79.5

79.5

72

20.5

20.5

100.0

100.0

100.0

Total 352

Fig 4.1 Detailed information about customers

Interpretation: From the figure we can say that 79.5 percent customers are asked
their detailed information by the banks before entering into a relationship.

32

Table 4.2 Awareness of CRM activities

Valid
Percent

Cumulative
Percent

10.8

10.8

10.8

offering
a22
product/service required

6.2

6.2

17.0

assigning a relationship 24
manager

6.8

6.8

23.9

waiver
of
fee/charges

1.4

1.4

25.3
100.0

Frequency Percent
Valid taking
feedback

periodic38

certain5

none

263

74.7

74.7

Total

352

100.0

100.0

Fig 4.2 Awareness of CRM activities

Interpretation: The table shows that 74.7 percent customers are not aware of the
listed CRM activities in their banks

33

Table 4.3 Provision of Relationship Manager

Frequency Percent

Valid
Percent

Cumulative
Percent

Valid yes

226

64.2

64.2

64.2

no

126

35.8

35.8

100.0

100.0

100.0

Total 352

Fig 4.3 Provision of Relationship Manager

Interpretation: The figure shows that 64.2% customers have been provided with
a relationship manager.

34

Table 4.4 Approached relationship manager or branch

manager for problems

Valid

Frequency Percent

Valid
Percent

Cumulative
Percent

yes

201

57.1

57.1

57.1

no

151

42.9

42.9

100.0

Total

352

100.0

100.0

Fig 4.4 Approached relationship manager or branch manager for problems

Interpretation: The table shows that 57.1 percent customers have approached
the relationship manager or bank manager when faced a problem.

35

Table 4.5 Resolution of problem or complaint

Frequency Percent

Valid
Percent

Cumulative
Percent

179

50.9

50.9

50.9

within 24 hrs

34

9.7

9.7

60.5

within 48 hrs

65

18.5

18.5

79.0

within 72 hrs

2.0

2.0

81.0

a 37

10.5

10.5

91.5
100.0

Valid immediately

morethan
week
not applicable

30

8.5

8.5

Total

352

100.0

100.0

Fig 4.5 Resolution of problem or complaint

Interpretation: The bar graph shows that 50.9 percent of the reported problems
get solved immediately.

36

Table 4.6 Bank takes feedback on resolution of problem

Valid yes
no

Frequency Percent

Valid
Percent

Cumulative
Percent

98

27.8

27.8

27.8

254

72.2

72.2

100.0

100.0

100.0

Total 352

Fig 4.6 Bank takes feedback on resolution of problem

Interpretation: 72.2 percent do not take feedback from their customers once
their problem is resolved.

37

Table 4.7 Level of satisfaction and loyalty

Frequency Percent

Valid
Percent

Cumulative
Percent

Valid yes

159

45.2

45.2

45.2

no

193

54.8

54.8

100.0

100.0

100.0

Total 352

Fig 4.7 Level of satisfaction and loyalty

Interpretation: 54.8 percent customers say that their level of satisfaction

and loyalty is not affected by the customer relationship management initiatives
taken by their bank;

38

Table 4.8 Customers recommending their banks to their

family and friends

Valid yes
no

Frequency Percent

Valid
Percent

Cumulative
Percent

325

92.3

92.3

92.3

27

7.7

7.7

100.0

100.0

100.0

Total 352

Fig 4.8 Customers recommending their banks to their family and friends

Interpretation: 92.3 percent customers will recommend their bank to their

family and friends whereas 7.7 percent customers will not recommend their
bans to their family and friends.

39

Table 4.9 Overall satisfaction level

Frequency Percent

Valid
Percent

Cumulative
Percent

27

7.7

7.7

7.7

somewhat

67

19.0

19.0

26.7

fully
satisfied

251

71.3

71.3

98.0

very happy

2.0

2.0

100.0

Total

352

100.0

100.0

Valid not at all

Fig 4.9 Overall satisfaction level

Interpretation: Percentage of fully satisfied customers is highest (71.3) followed

by somewhat satisfied and then very happy. The percentage of not at all
satisfied in select banks is (7.7)

40

Table 4.10 Cross tab on level of satisfaction &

recommend bank to family and friends

Count
recommend

satisfaction level and

loyalty
Total

yes

no

Total

yes

159

159

no

166

27

193

325

27

352

Fig 4.10 Cross tab on satisfaction level and loyalty & name of bank

41

Fig 4.11 Cross tab on Recommend bank to family and friends & name of bank

Interpretation: The above figures study a relationship between satisfaction

level and recommendation to family and friends. The figure shows that
customers of SBI are most satisfied customers and all of them recommend their
bank to their family and friends.

4
2

Table 4.11 Cross tab on relationship manager and response to the problem
Count
if yes, what response
prompt and
sympathetic courteous
evasive

not applicable Total

provided
with yes
relationship manager
no

11

153

62

226

32

89

126

Total

11

185

151

352

Fig 4.12 Cross tab on Provision of Relationship manager & name of bank

43

Fig 4.13 Cross tab on Kind of response to the problem & name of bank

Interpretation: The relationship managers of Punjab National Bank are

prompt and courteous

44

Table 4.12 Cross tab on relationship manager & problem

resolution

Count
provided with relationship
manager
yes

no

Total

112

67

179

34

34

within 48 hrs

38

27

65

within 72 hrs

a 28

37

23

30

226

126

352

duration of problem immediately

resolved
within 24 hrs

more than
week
not applicable
Total

45

Fig 4.14 Cross tab on relationship manager & problem resolution

Interpretation: The figure shows that of the customers who have been
provided with a relationship manager have their problems solved immediately.
Fig 4.15 Detailed bank-wise provision of relationship manager

Interpretation: This figure gives detailed information on provision of a

relationship manager at each select bank

46

Fig 4.16 Detailed bank-wise duration of problem solved

Interpretation: According to the figure, customers of Punjab National bank get

their problems solved immediately, followed by State Bank of India.

47

CHAPTER 5

CONCLUSION, RECOMMENDATIONS AND LIMITATIONS

48

CHAPTER 5: CONCLUSION, RECOMMENDATIONS AND

LIMITATION

The analysis of the different variables was source to the following findings and
results.
OBJECTIVE 1: To find out the level of awareness in the customer of select
public sector banks about the CRM initiatives taken by these banks.

74.7 percent customers of all select banks are not aware of the listed CRM
activities that are being followed by their banks (Fig 4.2).

71.7 percent customers of select public sector banks are not aware of CRM
initiatives that are being followed by their bank.

97.5 percent customers of select private sector banks are not aware of CRM
initiatives that are being followed by their bank.

OBJECTIVE 2: To find out the effectiveness of CRM in increasing the

customer satisfaction and loyalty in the select public sector banks.

57.1 percent customers approach a relationship manager when they face any
problem (Fig 4.4)

71.3 percent customers are fully satisfied with their bank (Fig 4.9)

93.5 percent customers of public sector will recommend while 82.5 percent
customers of private sector will recommend.

72.1 percent customers of public sector are fully satisfied while 65 percent
customers of private sector are fully satisfied.

OBJECTIVE 3: To find out if there

customer acquisition and retention as a
these banks.

has been any positive impact on

result of CRM initiatives taken by

49

67.6 percent customers have prompt and courteous response to the problem(Fig

4.13)
92.3 percent customers will recommend their banks to their family and
friends while 7.7 percent customers will not (Fig 4.8)
Other Findings

79.5 percent customers are asked their detailed information by the banks before
entering into a relationship.(Fig 4.1)

50.9 percent of problems are solved immediately.(Fig 4.5)

RECOMMENDATIONS
Customer Relationship Management is an important factor for any banking
system to raise their profit and also to maintain long-lasting relationships with
their customers. CRM strategies also serve as a measure for customer
satisfaction level and loyalty. Here are some recommendations based on the
findings of the study that can help the banks to make their CRM stronger and
economically fruitful.
74.7 percent customers of the select public sector and private sector banks are
not aware of the CRM initiatives taken by their banks. Thus the banks should
take some steps as mentioned below to make the customer aware of it:1. Inform their customers through regular e-mails, to encourage them to invest
more in customer relationship management.
2. Send text messages to their customers, to keep them updated of any activity that
is happening or going to happen in the bank, in near future.
As the employees of the bank are not aware as to how to deal with the
customers of the bank, the bank should take some steps like conducting regular
training programs for their employees and train them as to how they should deal
with customers of the bank.

50

LIMITATIONS

The data collected for the research is related to the Delhi-NCR region and thus
is a very region specific study, thus constricting the findings only to DelhiNCR.

It was very tricky to find out the correct answers as the respondents found the
procedure of filling the questionnaire cumbersome.

The customers were not ready to reveal their personal information in

anticipation of the followed-up procedures.

51

CHAPTER 6

REFERENCES

52

CHAPTER 6: REFERENCES

1. Tim R. Coltman, Timothy M. Devinney, and David F. Midgley (2000)

Relationship Of Customer Relationship Management And Firm Performance
2. Shahzeb Ali Malik and Trevor Wood-Harper (2002) Customer Relationship
Management (CRM) In The Banking Sector Of Pakistan: Problems And
Challenges
3. Lawrence Ang and Francis Buttle (2004), Managing For Successful Customer
Acquisition: An Exploration, Journal of Marketing Management, October 2004
http://www.buttleassociates.com/pdf_files/Managing%20for%20successful%20
customer%20acquisition.pdf

4. C Rootman, M Tait & J Bosch (2007) The Influence Of Bank Employees On

Bank Customer Relationship Management
5. G.S.Popli and D.N.Rao (2009) Customer Relationship Management In
Indian Banks
6. Fan Wang, Fang Hu And Li Yu (2010) The Application Of Customer
Relationship Management In Investment Banks
7. Padmaja R (2010 A Study Of Customer Relationship Management In Banks
With Special Reference To Bank Of India, Hyderabad
8. Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), "Customer
Relationship Management And Customer Loyalty: A Survey In The Sector Of
Banking, International Journal of Business and Social Science Vol. 3 No. 3;
February 2012
http://ijbssnet.com/journals/Vol_3_No_3_February_2012/30.pdf

53

9. Dr. Richa Raghuvanshi and Rashmi Tripathi (2012) Customer Relationship

Management As A Strategic Tool In The Indian Banking Sector: A Case Study
Of Axis Bank At Lucknow
10. Dr. Shirmila Stanley (November 2012), "New Perspectives In The Banking
Sector- The CRM Way
11. Monal Deshmukh (October 2012), "Customer Relationship Management In
Indian Commercial Banks, International Journal of Science and Research
(IJSR), India, Volume 1 Issue 1, October 2012
http://www.ijsr.net/archive/v1i1/IJSR10120104.pdf
12. Ajit Kumar Sahoo and Rashmita Sahoo (April 2013), "CRM In Indian Banking
Sector, VSRD International Journal of Business and Management Research,
Vol. 3No. 4April 2013
http://www.vsrdjournals.com/MBA/Issue/2013_04_April/Web/1_Ajit_Kumar_
Sahoo_1576_Research_Article_VSRDIJBMR_April_2013.pdf
13. Dr. Nishikant Jha and Prof. (Mrs.) Shraddha Mayuresh Bhome (May 2013 ), "A
Study Of CRM-As A Strategic Tool Adopted By Banks With Reference To Axis

Bank In Thane City., Indian Journal Of Applied Research, Volume : 3 | Issue :

5 | May 2013 | ISSN - 2249-555X
http://www.theglobaljournals.com/ijar/file.php?val=MTUxNw

14. Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013) "Customer Relationship
Management as a Corporate Strategy in Indian Banking Sector: A Comparative
Study Of Private And Public Sector Banks, Journal of Business Management &
Social Sciences Research (JBM & SSR), ISSN No: 2319-5614, Volume 2, No.
3, March 2013.
http://borjournals.com/Research_papers/Mar_2013/1191M.pdf

54

15. Yatish Joshi and Ehtesham Ahmad (June 2013) "Customer Relationship
Management In Banks, VSRD International Journal of Business and
Management Research, Vol. 3 No. 6 June 2013
http://www.vsrdjournals.com/MBA/Issue/2013_06_June/Web/8_Yatish_Joshi_1
936_Research_Communication_VSRDIJBMR_June_2013.pdf

55

APPENDIX

56

QUESTIONNAIRE

1. In which of the following banks do you have your account?

a) Punjab National Bank
b) State Bank of India
c) Allahabad Bank
d) Canara Bank
e) Bank Of Baroda
f) Syndicate Bank
g) Yes Bank
h) IndusInd Bank
i) Kotak Mahindra

2. For how long have you been banking with the above bank?
a) Less than 1 year
b) 1 -2 years
c) 2 -3 years
d) More than 3 years

3. Did the bank take detailed information/data about your personal profile and
family at the time of opening the account?
a) Yes
b) No

4. What services/products are you availing from the bank?

a) Deposits
Savings account

57

Current account

Recurring deposit

Fixed deposit

Flexi deposit
(Combination of fixed deposit and a linked savings
A/c) b) Loans and advances

Home loan

Automobile loan

Personal loan

Education loan

Business loan

Any other loan

c) Other products/services

Locker

Wealth management services

Insurance products

Mutual Fund products

Any other (please specify)

58

5. Is your bank providing you some special services such as:Category

Yes

No

Pick up of checks/cash from

your residence
Delivery of cash at your
residence
Services of wealth manager at
your residence
Any other service

(please

specify)

Does the bank charge you for the above services?

a) Yes
b) No

6. Are you aware of any of the following customer relationship management

(CRM) initiatives taken by your bank to provide you service as per your
requirements?
a) Taking periodic feedback from you, about the quality of services.
b) Offering a product/ service required by you
c) Assigning a relationship manager
d) Invitation for a cinema show/ cultural event
e) Waiver of certain fee/charges

59

7. Is there any minimum balance requirement in your account?

Yes
No
If yes, what is the requirement?
8. Have you been provided a relationship manager?
a) Yes
b) No
If yes, how frequently does he/she contact you on his/her own?
a) Once in a month
b) Once in 2 months
c) Once in 3 months
d) Once in 6 months
e) Once in a year
f) Never contacts

9. Have you ever approached your relationship manager or the branch manager for
any problems faced by you in your dealings with the bank?
a) Yes
b) No
If yes, how was the response to your problem?
a. Sympathetic
b. Prompt and courteous
c. Evasive
d. No concern

60

10. How soon your problem/complaint was resolved?

a) Immediately on the spot
b) Within 24 hours
c) Within 48 hours
d) Within 72 hours
e) Within a week
f) More than a week
g) Not resolved

11. Did the bank take your feedback about your experience in connection with the
resolution of your problem/complaint?
a) Yes
b) No

12. Did you face the same problem again and you had to approach the bank for the
same?
a) Yes
b) No
If yes, after how much time?

13. For which of the following products does the bank approach you?
a) Gold coins
b) Loans
c) Credit Card
d) Mutual funds
e) Insurance policy
f)Fixed deposits
g) Any other (please specify)

61

14. Does the bank approach you for getting the feedback on your satisfaction level
with their services?
a) Yes
b) No

If yes, what is the frequency of feedback collection?

Once in a month

Once in 2 months

Once in 3 months

Once in 6 months

Once in a year
15. Has your bank introduced any reward scheme/bonus point scheme on any of its
products which you have availed?
a) Yes
b) No

16. If answer to question no. 15 is yes, has this reward scheme increased your
satisfaction level with the bank?
a) Yes
b) No

17. Did you ever switch your bank?

a) Yes
b) No
If yes, why
18. Do you think your decision to change the bank was right i.e. you never faced
the same problem with your present bank?
a) Yes, my decision was right. Im happier with my present bank

62

b) No, I am facing similar problems/some other problems with my present bank 19.
Do you think that customer relationship management (CRM) initiatives taken
by your bank has contributed to your satisfaction level and loyalty to the bank?
a) Yes
b) No

20. Have you or will you recommend your bank to your family and friends for
opening an account or availing other services?
a) Yes
b) No

21. How will you rate your bank on the following parameters
Category

Highly
Highly
Satisfied Neutral Dissatisfied
satisfied
dissatisfied

Prompt
and
courteous service
Speed
of
problem/complaint
resolution
Availability of
a
wide variety
of
products
and
services
Provision of
relationship
manager and
attitude

a
his

Technological
Innovation
Your recognition as
a valued customer

63

Any other service

(please specify)

22. How satisfied are you with the following facilities at your Banks Branch?
Highly
satisfied

Category

Satisfied Neutral Dissatisfied

Highly
dissatisfied

Clean & comfortable

environment
Personalized services
Easy availability of
information
brochures/pay
slips/forms etc
Automatic machines
for
cheques/cash
slips
in bank at
convenient locations

23. Do you

think that your bank caters all your banking needs?

Yes

No

24. Does your bank conduct any of the following activities?

a) Customer Meet
b) Customer Lunches
c) Customer Awards
d) Tickets/Invites for cultural events

25. How would you rate your overall satisfaction level with the services of the
bank?

64

a) Not at all satisfied

b) Somewhat satisfied
c) Fully satisfied
d) Very happy

26. What are your suggestions for increasing your satisfaction and loyalty towards
your present bank i.e. what extra services/facilities your bank should provide
you?

Customer Profile

Name

Age
a) 20-30
b) 31-40
c) 41-50
d) 50 above

Gender
a) Male
b) Female

Postal/email address

Telephone No.

Profession

65

1. Student
2. Self-employed
3. Government job
4. Private job
5. Retired
6. Home Maker

Income

1. 20,000 30,000 p.m.

2. 30,000 40,000 p.m.
3. 40,000 50,000 p.m.
4. 50,000 1, 00,000 p.m.
5. More than 1, 00,000 p.m.

66

SYNOPSIS

AMITY BUSINESS SCHOOL

Dissertation Synopsis
Name:

Arunima

Program:

MBA-HR

Class Roll

C-24

Srivastava
AUUP

A0102312126

Enrollment

No:

No:
Contact No:

+918527707779

Name of the

Email:

arunimasrivastav
a6@gmail.com

Prof. Ramesh Bagla

Faculty
Guide:

1. Dissertation Title
A study of the efficacy of customer relationship management in customer
acquisition and retention at select public sector and private sector banks
2. Rationale of proposed investigation
Indian banking has come a long way from small banks owned and managed by
select industrial houses to modern day professionally managed banks with
customer centricity both in public and private sector. With the advent of new age
banks such as HDFC & ICICI banks in 1990s, public sector banks with their
typical lack-luster ways of functioning, felt a new threat to their existence.

67

Private sector banks brought about a paradigm shift in the way, customers were
serviced by introduction of software based customer relationship management
(CRM). As a result, public sector banks were forced to follow the suite by taking
CRM initiatives. Thus CRM has become one of the most talked about tools for
customer acquisition and retention. There are divergent views about seriousness
with which Indian public sector banks have implemented the CRM initiatives.
This study aims to find out the customer perception about the CRM in select
public sector and select private sector banks and its efficacy in customer
acquisition.

3. Review of work already done on the subject/Literature Review

1. CRM- A strategic tool
The study of the literatures available today, raised many issues and concerns
related to CRM. The most important concern is the treatment of CRM as a
strategic tool. Dr. Nishikant Jha And Prof. (Mrs.) Shraddha Mayuresh
Bhome (May 2013 ), have done "A Study Of CRM-As A Strategic Tool
Adopted By Banks With Reference To Axis Bank In Thane City." The study
used survey questionnaires, which were filled by the customers of the Axis Bank.
The result of the paper showed that the customers of the bank were happy with
the kind of services provided by the Axis Bank and also that the employees of
the bank knew their job well. In the end few suggestions were provided by the
researchers to make working of the bank more easy and satisfying for the
customers. The result was depicted through pie-charts and bar-graphs. Similarly,
Dr. Richa Raghuvanshi And Rashmi Tripathi (2012) in their research paper
Customer Relationship Management As A Strategic Tool In The Indian
Banking Sector: A Case Study Of Axis Bank At Lucknow said that Indian
Banks are realizing that the magical formula for attaining success in a
competitive environment is to focus on maintaining relationship with customers.

68

The main purpose behind this study is to analyze whether banks are really
implementing the whole concept and philosophy of CRM as a means of securing
competitive advantage. These results were discussed and analyzed so as to get an
indication of how far CRM is strategically implanted to secure competitive
advantage. The research design in this study consisted of exploratory research
whereby different aspects with regards to CRM in the banking sector have been
extracted from literature review and tested on a sample size of both employees
and customers.
2. CRM- Influential in choosing banks in India
The second most important factor that was identified was the influence CRM has
on people while choosing banks in India. Ajit Kumar Sahoo And Rashmita
Sahoo (April 2013), studied the role of "CRM In Indian Banking Sector",
through factor analysis. They studied six different banks namely: SBI,
ANDHRA, ICICI, IDBI, CITI and HDFC. They conducted a study in
accordance with the following hypothesis:
Ho: There is no significant influence on any person in the choice of bank.
H1: There is significant influence on different persons in the choice of bank
According to the study, that followed, there happened to be three major factors
that had influence on a person's mind while choosing the bank. Those three
factors were: quality service, effectiveness of marketing program and
convenience in transaction.
Quality of service emerged as the first factor for selection of bank brands by the
respondents of SBI, Andhra Bank and CITI Bank,
Effectiveness of Marketing Program emerged as the factor the selection of the
bank by the respondents of IDBI and HDFC Bank.

69

Conveniently of transaction emerged as the most important factor for the

selection of bank used by the respondents of ICICI Bank.
3. Various types of CRM and need of managing CRM
Yatish Joshi And Ehtesham Ahmad (June 2013) in their paper "Customer
Relationship Management In Banks", have studied CRM through secondary
data provided by various researchers. They have discussed about the various
types of CRM: Operation, Analytical and Collaborative. They have also
discussed about the need of CRM in managing the customers, how can CRM be
beneficial to the banking industry. They have also discussed the various success
factors of CRM, how can the strategies of CRM be implemented and integrated
successfully in the banking marketing management.
Some points from the paper are as follows:
SUCCESS FACTORS FOR CRM
It is quite necessary to consider the following factors for successful
implementation of CRM in banking industry
To motivate customers to initiate revenue generating contacts.
To understand customers needs even before themselves. To decrease customer
churn by increasing customers satisfaction.
To use technology to improve customers service enables a greater degree of
customer differentiation in order to deliver unique customer interaction.
To make working customer friendly, through CRM.
To ensure that employees at all levels are accurately collecting the information
of the CRM system.
4. CRM- Boundary-less organization- Relationship for banking

70

Dr. Shirmila Stanley (November 2012), in her paper, "New Perspectives In

The Banking Sector- The CRM Way" studied the banks as boundary less
organization working 24*7. She also told that the banks of today are relying
more on the merits of "relationship for banking" as a factor for success.
According to her study, CRM has become a new mantra in service management,
which is both relationship based & information intensive. Banks need to
differentiate themselves by offering value-added service and building long-term
relationships with their customers. The CRM program must be embraced and
promoted by top management and supported with a comprehensive annual CRM
plan to ensure organization wide success. She has also discussed the 7 Ps of the
marketing management that are also evolving because of the integration of CRM
in the working of the organization. In the end she mentions a stress on the
support of the top management for promoting CRM strategies to gain more
customers and provide satisfaction to the present customers.
5. CRM- Customer Satisfaction, Customer Loyalty and Customer Value
Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), in the paper,
"Customer Relationship Management And Customer Loyalty: A Survey In
The Sector Of Banking, "studied the relation of CRM strategies and the impact
of these strategies on customer loyalty in the sector of banking. They found out
that more satisfied the customer more is customers loyalty towards the
organization and more the revenue generated. A benefit of a loyal customer is
that with him he brings along new customers, who if serviced satisfactorily may
turn out to be loyal customers of tomorrow. During the study the various findings
led to the formation of the following flowchart:

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Forming
customer

Learning customer
needs

database

and complaints

Producing solutions
peculiar to the
problem

Customer Relationship Management

Customer Satisfaction

Customer loyalty

Padmaja R (2010) in her research paper A Study Of Customer Relationship

Management In Banks With Special Reference To Bank Of India,
Hyderabad, studied today's customers buying decisions that are not based
simply on the quality of the product but with the relationship they have with the
company. She also said that it is the responsibility of the organizations to provide
what they need so that they can do their job properly. In today's world, we do
business with individuals or groups with whom we may never meet and hence
much less known in person to person sense. Customer Relationship Management
is about creating the feel of comfort in this high tech environment. This paper
focuses the role of Customer Relationship Management in banking sector and
the need for Customer Relationship Management to increase customer value and
Customer Relationship Management in Banks with special reference to Bank of
India, Hyderabad.

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6. CRM- Levels of Service Quality

G.S.Popli and D.N.Rao (2009) in their paper Customer Relationship
Management In Indian Banks talked about the findings of the service quality
level being provided by these banks. These suggest that in case of the Private
Sector Banks, all the five dimensions of service quality have scored higher
values when compared to the Public Sector Banks. It also points towards the
same fact that these banks have been able to enhance the service quality levels
for their customers making them more customer-oriented.
7. Influence of attitude, knowledge and ability on CRM
Monal Deshmukh (October 2012) in her research paper "Customer
Relationship Management In Indian Commercial Banks" studied to
determine the usefulness of CRM implementation on customer contentment and
perceived business performance. Various references in respective field conclude
that successful CRM implementation requires complete efforts for the
development of the three segments, i.e. attainment, enhancement and service
recovery phases. A survey on commercial banks in India reveals that CRM
implementation is absolutely linked with customer satisfaction and apparent
business conductance. Moreover it is revealed that frequent rate of getting in
touch with customers and recovery of services facilitates in retention of
customers. Leaking bucket theory also suggests that retention of customers is 10
percent more profitable then attracting new customers every time. Attainment,
regular contact and evaluation of customers direct towards improved customer
loyalty (by repeat purchase, positive word of mouth publicity) and employee
sentiments. In an administrative point of view, this research provides an outline
of the impact of CRM efforts on the magnitude of customer satisfaction and
apparent business conductance.

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8. CRM- A rising concern

Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013), researched on
"Customer Relationship Management As A Corporate Strategy In Indian
Banking Sector: A Comparative Study Of Private And Public Sector
Banks." Their paper aims to analyze the aspect of Complaint Handling in the
area of Customer Relationship Management in banking sector in India. The
various types of problems faced by customers in Banking services in both the
public and private sectors, the frequency of making complaints and reasons for
not making complaints and the expectation levels of customers regarding the
ability of the customer service provider in handling complaints are the main
issues of discussion in the paper. The paper is based on primary data. The paper
identifies certain behavioral factors that are associated with complaint issues in
the banking services of public and private sector. The study was divided into two
parts: Pilot study and Main study. In accordance with the results of pilot study
the questionnaire was modified and then the main study was conducted. The
results are depicted through bar-graphs. The study also throws light on the major
areas of concern for the banking sector in order to maintain CRM as a strategic
tool. The areas of concern are as follows:
Proper identification of Behavioral considerations during a service interaction
Dealing effectively with enquiry related system
Developing awareness tools
Training behavioral skills of employees
Proper development and implementation of complaint handling system.
9. Effect of CRM on Firm Performance
Tim R. Coltman, Timothy M. Devinney, And David F. Midgley (2000) in
their research paper Relationship Of Customer Relationship Management
And Firm Performance examined the impact of customer relationship
management (CRM) on firm performance using a hierarchical construct model.

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Following the resource-based view of the firm, strategic CRM is conceptualized

as an endogenously determined function of the organizations ability to harness
and orchestrate lower order capabilities that comprise physical assets, such as IT
infrastructure, and organizational capabilities, such as human analytics and
business architecture. Their results reveal a positive and significant path between
a superior CRM capability and firm performance. In turn, superior CRM
capability is positively associated with human analytics and business
architecture. However, their results suggest the impact of IT infrastructure on
superior CRM capability is indirect and fully mediated by human analytics and
business architecture. They also found that CRM initiatives jointly emphasizing
customer intimacy and cost reduction outperform those taking a less balanced
approach. Overall, this paper helped explain why some CRM programs are more
successful than others and what capabilities are required to support success.
Their paper showed that customer relationship management suffers when it is
poorly understood, improperly applied, and incorrectly measured and managed.
This study revealed the combination of investment commitments in human,
technological and business capabilities required to create a superior CRM
capability. The exact extent of these capabilities is extant indeterminate and
should be guided by a strategic emphasis that combines customer intimacy and
operational excellence. By integrating two schools of thought- capabilities and
strategic emphasis- they have build a more managerially relevant theory of CRM
performance that shows why CRM programs can be successful and what
capabilities are required to support success.
10. Influence of employees on CRM
C Rootman, M Tait & J Bosch (2007) in their paper The Influence Of Bank
Employees On Bank Customer Relationship Management did an extensive
research in services marketing, which is much still unknown to specific service
providers on the influence of their employees on their services. This paper
attempts to address this limitation and investigates the influence of employees on

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the customer relationship management (CRM) of banks. The primary objective

of this paper is to investigate the influence of selected independent variables,
namely attitude and knowledge ability, on the CRM of banks. An empirical
investigation was conducted with a structured questionnaire with items that
related to banks' CRM in terms of attitude and knowledge ability. The sample
consisted of 290 banking customers in the Metropolitan area and the response
rate was 91.03%. As a result a significant positive relationship was found to exist
between both the knowledge and ability, and attitude of bank employees and a
bank's CRM. These relationships imply that more extensive knowledge ability
and more positive attitudes of bank employees lead to improved, maintained
relationships between a bank and its customers. Employees play an important
role in banks' customer relationships.
11. CRM in Investment Banks
Fan Wang, Fang Hu And Li Yu (2010) in their paper The Application Of
Customer Relationship Management In Investment Banks discussed the
importance of CRM to the investment banks management, compared the
application of CRM between domestic investment banks and the foreign ones,
and points out that in applying CRM, domestic investment banks must make
clear their cognitional misunderstanding, base themselves on the customers
center and customers satisfaction, and their own status and characteristics, take
efficient measures to perfect CRM, then realize the maximizing value . They
also talked about the different CRM strategies that can be applicable in China.
12. CRM and Customer Acquisition
Lawrence Ang and Francis Buttle (2004), in their research paper Managing
For Successful Customer Acquisition: An Exploration studied the recent
attention dedicated by consultants, academics and practitioners to customer
retention, customer acquisition. Customer acquisition is of major importance and
demands attention as the first stage of the customer life cycle. There is a strong

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analytical, planning and control emphasis to the bulk of the contemporary

customer management literature. This emphasis is projected into research
hypotheses, which focus on the first stage of the life-cycle-customer acquisition.
In particular, they examined (1) executive responsibility, (2) budgeting for
customer acquisition, (3) knowledge of the economics of customer acquisition
and (4) the deployment of CRM technologies.
In summary, two overarching managerial implications can be drawn from this
study. First, companies are generally not very advanced in their management of
the core CRM activity of customer acquisition as indicated by the low level of
adoption of management practices such as budgeting, planning, executive
responsibility and the application of CRM technologies. Second, having an
acquisition plan (or, indeed, putting a manager in charge) by itself is not
sufficient to generate good acquisition outcomes. It is vital to have a dedicated
customer acquisition budget. The overriding managerial implication is that if
senior management is truly serious about customer acquisition, it should be
reflected in a budget dedicated to the task. Their research shows that only then is
excellence in customer acquisition achieved.
13. CRM- Problems and Challenges
Shahzeb Ali Malik and Trevor Wood-Harper (2002) in the study Customer
Relationship Management (Crm) In The Banking Sector Of Pakistan:
Problems And Challenges focused on CRM that has helped banks to
understand the customers' current needs, what they have done in the past, and
what they plan to do in the future to meet their own goals. Even though most of
the banks in the developing countries such as: Pakistan, India etc. have realized
the importance of CRM and implemented its applications, but the initial
investigations of the current research have shown that quite a number of CRM
goals does not produce required results and even worse, in some cases users say
that CRM has damaged customer relationships. Therefore, this paper is based on

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highlighting the problems and challenges in the banking sector of Pakistan using
CRM. Also, some of the major problems in the banking sector of Pakistan are
identified using the qualitative interviews from different bank employees and
customers and their findings are presented in this paper.

4. Objectives
The research objectives are as follows:
a. To find out the level of awareness in the customer of select public sector banks
about the CRM initiatives taken by these banks.
b. To find out the effectiveness of CRM in increasing the customer satisfaction and
loyalty in the select public sector banks.
c. To find out if there has been any positive impact on customer acquisition and
retention as a result of CRM initiatives taken by these banks.
5. Materials and Methods
Research Design
A combination of Exploratory and Descriptive research design would be used in
the research work. Exploratory research would be applied to identify the
customer preferences which attract them to opt for a bank for various services.
Sampling Design
Sample (Participants): The sample for this research comprises of customers of
the select banks
Type of Sampling: Convenience and Snowball sampling would be used for the
study.
Sample Size: The sample size is 300 customers from six select public sector
and private sector banks.

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Data Collection
Data Type:
Data type proposed for the research is a combination of primary and secondary
data. The primary data would be collected through a detailed questionnaire,
which would be circulated in the proposed sample area and secondary data
would be collected through the thorough study of the research journals, reports,
whitepapers and cases previously published on the topic.
Research Instrument
A structured questionnaire will be used for collection of primary data. The
instrument would be tailored for the research based upon the objectives. The
instrument would be put through a pilot test for reliability testing through the
responses collected from 300 respondents.
Tools Used
The major tools used for analysis are as follows:
1. Descriptive Statistics: Bar graphs and Pie charts.
2. Correlation to find the type of relationships
3. Crosstabs to find the relation between two variables

6. Tentative Chapter wise details of proposed research

Chapter 1: Introduction
Chapter 2: Review of Literature
Chapter 3: Research Methodology
Chapter 4: Data Analysis and Interpretation
Chapter 5: Conclusion and Recommendation

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7. References Cited
1. Tim R. Coltman, Timothy M. Devinney, and David F. Midgley (2000)
Relationship Of Customer Relationship Management And Firm Performance
2. Shahzeb Ali Malik and Trevor Wood-Harper (2002) Customer Relationship
Management (CRM) In The Banking Sector Of Pakistan: Problems And
Challenges
3. Lawrence Ang and Francis Buttle (2004), Managing For Successful
Customer Acquisition: An Exploration, Journal of Marketing Management,
October 2004
4. C Rootman, M Tait & J Bosch (2007) The Influence Of Bank Employees
On Bank Customer Relationship Management
5. G.S.Popli and D.N.Rao (2009) Customer Relationship Management In
Indian Banks
6. Fan Wang, Fang Hu And Li Yu (2010) The Application Of Customer
Relationship Management In Investment Banks
7. Padmaja R (2010 A Study Of Customer Relationship Management In Banks
With Special Reference To Bank Of India, Hyderabad
8. Dr. Duygu Kocoglu and Sevcan Kirmaci (February 2012), "Customer
Relationship Management And Customer Loyalty: A Survey In The Sector Of
Banking, International Journal of Business and Social Science Vol. 3 No. 3;
February 2012
9. Dr. Richa Raghuvanshi and Rashmi Tripathi (2012) Customer
Relationship Management As A Strategic Tool In The Indian Banking Sector:
A Case Study Of Axis Bank At Lucknow

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10. Dr. Shirmila Stanley (November 2012), "New Perspectives In The Banking
Sector- The CRM Way
11. Monal Deshmukh (October 2012), "Customer Relationship Management
In Indian Commercial Banks, International Journal of Science and Research
(IJSR), India, Volume 1 Issue 1, October 2012
12. Ajit Kumar Sahoo and Rashmita Sahoo (April 2013), "CRM In Indian
Banking Sector, VSRD International Journal of Business and Management
Research, Vol. 3No. 4April 2013
13. Dr. Nishikant Jha and Prof. (Mrs.) Shraddha Mayuresh Bhome (May 2013 ),
"A Study Of CRM-As A Strategic Tool Adopted By Banks With Reference

To Axis Bank In Thane City., Indian Journal Of Applied Research, Volume : 3

| Issue : 5 | May 2013 | ISSN - 2249-555X
14. Dr. Richa Sinha and Dr. Nishi Tripathi (March 2013) "Customer Relationship
Management as a Corporate Strategy in Indian Banking Sector: A Comparative
Study Of Private And Public Sector Banks, Journal of Business Management &
Social Sciences Research (JBM & SSR), ISSN No: 2319-5614, Volume 2, No.
3, March 2013.
15. Yatish Joshi and Ehtesham Ahmad (June 2013) "Customer Relationship
Management In Banks, VSRD International Journal of Business and
Management Research, Vol. 3 No. 6 June 2013

Signature of the Student

Signature if the Faculty Guide

Arunima Srivastava

Prof. Ramesh Bagla

th

Date: 11 October, 2013