customer relationship management system
Content
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INTERNATIONAL SCHOOL OF BUSINESS & MEDIA PUNE
A DESSERTATION REPORT ON
“CUSTOMER RELATIONSHIP AND ITS IMPACT ON SALES A CASE STUDY ON ICICI BANK.”
In partial fulfillment of the requirements For the award of the POST GRADUATE DIPLOMA In MARKETING & FINANCE MARCH 2011
Submitted By:
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ADARSH AGARWAL PGPBM (V1114)
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CERTIFICATE
This is to certify that Adarsh Agarwal, a bonafide student of International School Of Business & Media, Pune pursuing Post Graduate programme in Marketing Management with minors in Finance, has worked under my guidance and supervision on the dissertation tiled ―Customer Relationship And its Impact On Sales A Case Study On ICICI Bank” For the purpose of dissertation work & report on the above topic, I certify that the candidate has completed the work in the prescribed period and the dissertation work in the incorporates the results of the job done by him during VIth trimester
Date: 07/03/2011
Guided by: Prof.Shibani Tyagi Bhoil ISB&M, Pune
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ACKNOWLEDGEMENT
I Adarsh Agarwal student of ISB&M, PGPBM express my sincere gratitude and thanks to the respected President of ISB&M Dr. Pramod Kumar who was really very kind in giving me the start up with this project. I would like to pay my sincere thanks to Shibani Tyagi Bhoil, my mentor who really helped me in deciding & designing this project. I am indebted to Mrs. Shibani Bhoil Tyagi (Academic Chairperson), who carefully reviewed and guided the entire project and who offered many suggestions and recommendations reflected in this research work. Sheer blessings of my parents have helped me to complete my project. They have remained a source of inspiration for me who have always prayed for my success.
Adarsh Agarwal
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Preface
India is the most attractive banking sector in the world. Banking SectorRetail of industry are getting affected by this boom, favorably as well as unfavorably. Number of Banks in India is growing at electric rate and thus the challenge or opportunity of retaining the existing customers is also growing faster. This study focuses on the need of customer retention efforts such as loyalty programs etc., which enables the Indian banking sector to be competitive and better than others existing and upcoming banks. The study of existing loyalty programs and other customer retention efforts helps in understanding the current situation and strategies better. Their analysis provides a view of the relationship between the nature of the utility offered and the customer experience cycle by using Buyer Utility Map. It was found that loyalty card programs have not worked as well as expected, but the most important benefit of having loyalty program is that bankers can quantify new customer losses and introduce programs designed to retain or encourage the most profitable customers.
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CONTENTS
1: INTRODUCTION 1 About ICICI BANK 2 CRM 2.1 Customer Relationship 2.2 Benefits of CRM 2.3 Social Media 2.4 Technology 2.5 Understanding CRM 2.6 Determinants of CRM 2.7 Stages in CRM 2.8 Functions of CRM 2.9 Role of Salesperson 3 CRM in ICICI 2 Research Methodology 1 Purpose of study 2 Objective 3 Variables 4 Hypothesis 5 Sampling and Data Collection 3 Analysis and Interpretation 4 Conclusion 5 Bibliography Annexure 8-11 12-28 12 12 12-22 22-23 23-24 24-25 25 25-26 26-28 29 30-32 30 30 31 31 32 33-36 37-38 39
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Questionnaire
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ABOUT ICICI
BANK
ICICI Bank (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) (formerly Industrial Credit and Investment Corporation of India, is a major banking and financial services organization in India. It is the second largest bank in India and the largest private sector bank in India by market capitalization. The bank also has a network of 2,016 branches (as on 31 March 2010) and about 5,219 ATMs in India and presence in 18 countrie as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank's shares are listed on the stock exchanges at BSE, NSE, Kolkata and Vadodara (formerly Baroda) ; its ADRs trade on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly owned subsidiaries, branches and representatives offices in 19 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular. ICICI reported a 1.15% rise in net profit to 1,014.21 crore on a 1.29% increase in total income to 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's CASA ratio increased to 30% in 2008 from 25% in 2007. ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Punjab National Bank and Canara Bank — its main competitors.[8]
ICICI Bank HQ at BKC Mumbai
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In 1955, The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated at the initiative of World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. In 1994, ICICI established Banking Corporation as a banking subsidiary. Formerly known as Industrial Credit and Investment Corporation of India, ICICI Banking Corporation was later renamed as 'ICICI Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit cards, car loans etc. In 2001, ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s. In 2002, The Boards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the group's financing and banking operations, both wholesale and retail, into a single entity. At the same time, ICICI started its international expansion by opening representative offices in New York and London. In India, ICICI Bank bought the Shimla and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays Bank. In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai. In 2004, ICICI opened a representative office in Bangladesh to tap the extensive trade between that country, India and South Africa. In 2005, ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a branch in Dubai International Financial Centre and in Hong Kong. In 2006, ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI opened representative offices in Bangkok, Jakarta, and Kuala Lumpur. In 2007, ICICI amalgamated Sangli Bank, which was headquartered in Sangli, in Maharashtra State, and which had 158 branches in Maharashtra and another 31 in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural areas. With respect to the international sphere, ICICI also received permission from the government of Qatar to open a branch in Doha. Also, ICICI Bank Eurasia opened a second branch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted ICICI to convert its representative office in New York into a branch. ICICI also established a branch in Frankfurt. In 2009, ICICI made huge changes in its organisation like elimination of loss making department and restreching outsourced staff or renegotiate their charges in consequent to the recession. In addition to this, ICICI adopted a massive approach aims for cost control and cost cutting. In consequent of it, compesation to staff was not increased and no bonus declared for 2008-09. On 23 May ICICI Bank announced that it would merge with Bank of Rajasthan through a shareswap in a non-cash deal that values the Bank of Rajasthan at about 3,000 crore. ICICI announced that the merger expand ICICI Bank's branch network by 25%. On 18h October 2010, ICICI will inaugurate I-Express, an instant cross-border money transfer option for Non-Resident Indians (NRIs). This service will be available through the ICICI Bank's select partners in the Gulf Cooperation Council
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a) Branch Manager’s Functions: i) Cash Section ii) Deposit Section iii) Clearing Section iv) Accounts Section v) Staff Section vi) Loans Section vii) Locker and other services
1) Reserve Banks role as Banker to Banks a. Granting loans to other banks b. Checking of accounts, payments and interest of other banks c. Granting of status of Scheduled banks 2) Role in Exchange control a. Control value of Indian Rupee b. Appointing authorized dealers c. Reduce adverse balance of payments position d. Encouraging opening of Non Resident Accounts.
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3) RBI Role vis-à-vis Urban Co-op Banks:a. To keep check on business transacted b. Check on capital c. Current Account with RBI d. Control over advances being granted e. Submitting the accounts f. Timely inspection of these banks
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ABOUT CRM
Customer relationship management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.Customer relationship management describes a company-wide business strategy including customerinterface departments as well as other departments
Benefits of CRM
The use of a CRM system will confer several advantages to a company:
Quality and efficiency Decreased costs Decision support Enterprise agility
Marketing
CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect Relationship Management (PRM) solutions which track customer behaviour and nurture them from first contact to sale, often cutting out the active sales process altogether
Social media
Social media sites like Twitter, LinkedIn and Facebook are amplifying the voice of people in the marketplace and are having profound and far-reaching effects on the ways in which people buy.
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Customers can now research companies online and then ask for recommendations through social media channels, making their buying decision without contacting the company. People also use social media to share opinions and experiences on companies, products and services. As social media is not as widely moderated or censored as mainstream media, individuals can say anything they want about a company or brand, positive or negative. Increasingly, companies are looking to gain access to these conversations and take part in the dialogue. More than a few systems are now integrating to social networking sites. Social media promoters cite a number of business advantages, such as using online communities as a source of high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies can also leverage client stated habits and preferences to "hyper-target" their sales and marketing communications. Some analysts take the view that business-to-business marketers should proceed cautiously when weaving social media into their business processes. These observers recommend careful market research to determine if and where the phenomenon can provide measurable benefits for client interactions, sales and support. It is state that people feel their interactions are peer-to-peer between them and their contacts, and resent company involvement, sometimes responding with negatives about that company
Today, small and mid-size business owners are using open source CRM software to help streamline their business processes with the expectation of generating more sales opportunities. Open source CRM solutions should be able to manage existing customers, facilitate prospecting, generate online sales leads, launch and track marketing campaigns, analyze customer needs and preferences, integrate with existing applications and provide secure access to company data from any computer with an Internet connection and a browser. Here are a few keys to selecting the right CRM solution: • Ensure the CRM software you choose has the ability to capture all relevant customer and sales related information. At a minimum, your CRM solution must be able to easily record all interactions with your customers. One of the major benefits of CRM software is in its ability to help collect, store and share data to all appropriate areas in your business — in real-time. • Before you deploy a CRM tool you must first understand your existing sales and marketing workflow. Your CRM tool must be able to integrate with your existing processes or your sales and marketing team will not use it. • It is imperative to understand the level of customization you will require. Do you have the required technical skills on staff to implement modifications? Does the CRM tool provide an API (application programming Interface) for extending the platform? Will custom changes prevent
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future upgrade options? Answering these questions in advance will save you time and money later. • Determine if the CRM tool can integrate with applications used by your staff. For example, you must know whether the CRM tool can share or exchange data with your email client (e.g. Outlook or Thunderbird). You must also know if the CRM tool provides an easy to use import or export function for data mining and other sales analysis functions. • Determine the level of support you will require. Most open source providers make their money on service and support rather than software sales. Therefore, you should investigate the various levels of support provided by the open source vendor. • Research the level and quality of third party extensions. Quite often companies are able to find free or low cost extensions and avoid the expense of internal development. Third party extensions can add needed functionality and save your business time and money. For example, third party payment modules have become a necessary component for accepting electronic payment at the point of sale
Why you need a CRM application to ensure the success of your business Today, the world of business has its axis on CRM applications. CRM applications are the need of the day for all kinds of businesses, be it small or large. They ensure better productivity and profit by bringing about a marked improvement in the performance of the business via customer centric services. The fulcrum of every CRM application is the same. It aims at creating a better relationship with the customer with the help of carefully collected data. It is the higher interactivity provided via CRM applications that make them so effective. With a CRM application in place, you can view a 360 degree view of the customers behavioral patterns with regards to the business. Benefits There are many benefits of a CRM application for any business. You can easily collaborate them with your existing applications sharing data across applications. You can collect, store and share data and access it from virtually anywhere in the world. Every CRM application can be further customized according to the needs of a business. Your marketing and sales program will never be the same again post CRM applications. It brings about a degree of precision in sales programs.
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You can now track the customers? transactions with the help of real time updated data. Most CRM applications are designed in an easy to use format and no extra training is required to impart or use the CRM tools. There is an interesting phenomenon happening in the small and medium business segment. The widespread adoption of on-demand or software as a service (saas) CRM, led by Salesforce.com, and followed by companies such as NetSuite and RightNow Technologies. Well, that’s not really new. What is new is the expanded use of saas CRM software within these mini-enterprises, whether independent businesses or smaller divisions or departments of larger corporations, as their principal business platform. Since saas CRM manages the lifeblood of the business, sales and customers, and is increasingly more user friendly and flexible, it is becoming the preferred method for companies to manage their business. As a result, it is also becoming the de facto integration hub, or SOA enabler, for the smaller enterprise. A case in point is the experience of a well-known educational products sales company. It’s parent company sells educational toys through retailers. However, it launched a division that sells education-oriented items to schools and school districts, such as a handheld screen-based interactive tool that uses story narratives to teach English proficiency to non-native English speakers. This newer division established a territory sales model, with geographically-based sales executives selling to school districts in their area. The main corporate entity has only a handful of account managers who sell to large retailers such as Wal-Mart and Toys’r'Us. Whereas it is geared towards a retail sales model and related B2B IT infrastructure, the newer division had the infrastructure needs of a territory-based direct sales model. They required a CRM application to track leads, opportunities, and closed sales, and because of the reduced bandwidth of this smaller business unit, they required the efficiency gains of an automated commission calculating application. With no dedicated IT resources (IT resources are tied to corporate and are available ―on-loan‖ to the new division), and a need to ramp-up quickly, the division chose to bring the CRM and commission calculation functionality of the on-demand model. They chose Salesforce.com and Xactly Corporation, respectively, to fulfill these functions. The one on-premise application they had access to was Oracle Financials for accounting. The missing piece was to integrate these applications together. They chose to go with a packaged integration platform, adopting their subscription-based pricing model and on-premise software. In addition to being the CRM platform for the new division, Salesforce.com is also serving as the de facto ―enterprise service bus‖ to incorporate the accounting functionality of Oracle Financials, and to trigger Xactly to do it’s job of calculating sales commissions.
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This use of Salesforce.com as a de facto on-demand ESB platform was noted in an August 2007 white paper entitled ―Busting Myths of On-Demand Integration,‖ by Peter Coffee, Director of Platform Research. ―On-demand platforms exhibit the growing capability to provide a foundation for integration,‖ he said, citing a May 2007 announcement of the Salesforce.com SOA technology that enables the exposure and consumption of web services. In the same paragraph he notes: ―This is not to say, however, that a move to a Web services protocol strategy (such as that of using a saas application such as Salesforce.com) is a prerequisite for on-demand integration…there are options available for use with the salesforce.com platform‖ such as custom coding or a third party integration platform. In other words, on-demand applications, Salesforce.com being the most prominent, are quickly establishing themselves as integration hubs the way ESB providers such as Sonic Software, IBM’s Websphere, and BEA’s Weblogic were formulated to be. These SOA solutions, however, are cost-prohibitive for smaller companies, divisions or departments, and are often managed by enterprise IT staffs who are unresponsive to the needs of the department. These smaller enterprises have to fend for themselves, and are adopting ondemand applications that require little to no IT involvement. IT typically has to get involved when it comes to integration, according to Coffee. Such was the case with the educational products company. Their IT department provided the input that the newer division needed to give the technical ―thumbs-up‖ to the integration solution. But due to human bandwidth issues they decided to go with a fully delivered integration solution as opposed to the traditional toolset that is typically sold to IT departments. Tying together Salesforce.com, Oracle Financials and Xactly Corporation was done in the span of four months and cost less than $50,000. Why did it take that long? Because they had to take a breather between deciding on an integration vendor and a commission calculation vendor. Compare that with enterprise application integration projects which typically take nine months or more and cost hundreds of thousands of dollars, and you can see why Salesforce.com, together with fully configured integration solutions, are quickly becoming the ―integration hubs‖ or systems of record for the smaller enterprise.
There is an interesting phenomenon happening in the small and medium business segment. The widespread adoption of on-demand or software as a service (saas) CRM, led by Salesforce.com, and followed by companies such as NetSuite and RightNow Technologies.
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Well, that’s not really new. What is new is the expanded use of saas CRM software within these mini-enterprises, whether independent businesses or smaller divisions or departments of larger corporations, as their principal business platform. Since saas CRM manages the lifeblood of the business, sales and customers, and is increasingly more user friendly and flexible, it is becoming the preferred method for companies to manage their business. As a result, it is also becoming the de facto integration hub, or SOA enabler, for the smaller enterprise. A case in point is the experience of a well-known educational products sales company. It’s parent company sells educational toys through retailers. However, it launched a division that sells education-oriented items to schools and school districts, such as a handheld screen-based interactive tool that uses story narratives to teach English proficiency to non-native English speakers. This newer division established a territory sales model, with geographically-based sales executives selling to school districts in their area. The main corporate entity has only a handful of account managers who sell to large retailers such as Wal-Mart and Toys’r'Us. Whereas it is geared towards a retail sales model and related B2B IT infrastructure, the newer division had the infrastructure needs of a territory-based direct sales model. They required a CRM application to track leads, opportunities, and closed sales, and because of the reduced bandwidth of this smaller business unit, they required the efficiency gains of an automated commission calculating application. With no dedicated IT resources (IT resources are tied to corporate and are available ―on-loan‖ to the new division), and a need to ramp-up quickly, the division chose to bring the CRM and commission calculation functionality of the on-demand model. They chose Salesforce.com and Xactly Corporation, respectively, to fulfill these functions. The one on-premise application they had access to was Oracle Financials for accounting. The missing piece was to integrate these applications together. They chose to go with a packaged integration platform, adopting their subscription-based pricing model and on-premise software. In addition to being the CRM platform for the new division, Salesforce.com is also serving as the de facto ―enterprise service bus‖ to incorporate the accounting functionality of Oracle Financials, and to trigger Xactly to do it’s job of calculating sales commissions. This use of Salesforce.com as a de facto on-demand ESB platform was noted in an August 2007 white paper entitled ―Busting Myths of On-Demand Integration,‖ by Peter Coffee, Director of Platform Research. ―On-demand platforms exhibit the growing capability to provide a foundation for integration,‖ he said, citing a May 2007 announcement of the Salesforce.com SOA technology that enables the exposure and consumption of web services.
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In the same paragraph he notes: ―This is not to say, however, that a move to a Web services protocol strategy (such as that of using a saas application such as Salesforce.com) is a prerequisite for on-demand integration…there are options available for use with the salesforce.com platform‖ such as custom coding or a third party integration platform. In other words, on-demand applications, Salesforce.com being the most prominent, are quickly establishing themselves as integration hubs the way ESB providers such as Sonic Software, IBM’s Websphere, and BEA’s Weblogic were formulated to be. These SOA solutions, however, are cost-prohibitive for smaller companies, divisions or departments, and are often managed by enterprise IT staffs who are unresponsive to the needs of the department. These smaller enterprises have to fend for themselves, and are adopting ondemand applications that require little to no IT involvement. IT typically has to get involved when it comes to integration, according to Coffee. Such was the case with the educational products company. Their IT department provided the input that the newer division needed to give the technical ―thumbs-up‖ to the integration solution. But due to human bandwidth issues they decided to go with a fully delivered integration solution as opposed to the traditional toolset that is typically sold to IT departments. Tying together Salesforce.com, Oracle Financials and Xactly Corporation was done in the span of four months and cost less than $50,000. Why did it take that long? Because they had to take a breather between deciding on an integration vendor and a commission calculation vendor. Compare that with enterprise application integration projects which typically take nine months or more and cost hundreds of thousands of dollars, and you can see why Salesforce.com, together with fully configured integration solutions, are quickly becoming the ―integration hubs‖ or systems of record for the smaller enterprise.
Critical to any customer relationship, are the employees who interact with the customer. If an employee is satisfied and has the ability to execute customer strategies, they can fulfill the brand promise. So when companies wish to enhance their customer relationships, they have to realize that the success of CRM initiatives relies heavily on the Human Resource strategies. The rationale is inescapable: if a person desires valued relationships with the customers, he or she needs valued relationships with the employees. (1) This approach is often referred to as Employee Resource Management (ERM). Trained and motivated staff and a superior staff appraisal system is the key to customer contentment and hence, the foundation of CRM.
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INTRODUCTION
The contemporary market environment is characterized by general variability, difficult foresee ability of the competitive situation, surplus economy, and well informed, more experienced, more fastidious, exacting and more impatient consumers and users, who cease being loyal to traditional products and brands.(2) Therefore we have a dire need for effective tools for increasing customer value and CRM is the answer to that. Several vendors now offer HR consultancy tools to their CRM software. These ad-ons provide solutions for enhanced staff productivity, end-user self-service and improved reporting capabilities. CRM STRATEGY FOR HR CONSULTANTS When planning CRM strategies for Human Resources, a company needs to provide solution to some basic issues. Some of these issues are employee grievances, inter-group conflicts, lack of career paths for ambitious employees, dissatisfaction with salary and remuneration, unclear job roles, no visible performance measures, poor recruitment policies, no induction training for new employees, critical skill shortages and management ignorance towards any of these problems (3). APPLICATION Today’s evolved consumer behavior demands a lot from companies. It is no longer a competition only among your own products. An organization is up against a multitude of astute competitors. That is why every company needs something to diversify itself from the contenders. Physical and timely accessibility of product/services is just as important as giving a customer valued service. In that scenario, the staff’s approach to managing the relation with customers is the key factor for the success of Customer Relationship Management (4). The success of CRM will depend mainly on professional work approach of employees, on their motivation and skills and knowledge, and also on systematic and consistent measurement and appraisal of their achievement. The basic workforce attributes in the context of CRM are an uncompromising concentration on customer’s needs, competitiveness and will-to-win recognition, decisiveness, skill to improvise, the ability of a team work and the ability to lead a team. The willingness and skill of continuous training and self-education are also crucial factors, and in doing so the requirements for training must primarily come from the skill recognition and staff appraisal (5).
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CRM – Customer relationship management . . . ―is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction • It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied. Marketers must be concerned with the lifetime value of the customer. Attracting, retaining and growing customers Building customer relationships and customer equity Customer value/satisfaction Perceptions are key Meeting/exceeding expectations creates satisfaction Loyalty and retention Benefits of loyalty Loyalty increases as satisfaction levels increase Delighting consumers should be the goal Growing share of customer Cross-selling
• • • • • • • • • • • •
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Customer equity
The total combined customer lifetime values of all customers
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Customer loyalty and retention programs Adding financial benefits Adding social benefits Adding structural ties
Marketing Challenges • Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes.
Major marketing developments can be grouped under the theme of Connecting
Via technology
• Advances in computers, telecommunications, video-conferencing, etc. are major forces. • Databases allow for customization of products, messages and analysis of needs.
The Internet Facilitates anytime, anywhere connections Facilitates CRM Creates marketspaces
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With customers
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Selective relationship management is key. Customer profitability analysis separates winners from losers.
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Growing ―share of customer‖ Cross-selling and up-selling are helpful.
Direct sales to buyers are growing • • With marketing partners Partner relationship management involves: • • Connecting inside the company Connecting with outside partners • • • • With the world Globalization • • • • Competition New opportunities Supply chain management Strategic alliances
Greater concern for environmental and social responsibility Increased marketing by nonprofit and public-sector entities • Social marketing campaigns
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Understanding Customer Relationship Management (CRM)?
• • • • • • • • • • • CRM is a business philosophy based on upon individual customers and customised products and services supported by open lines of communication and feedback from the participating firms that mutually benefit both buying and selling organisations. The buying and selling firms enter into a “learning relationship‖, with the customer being willing to collaborate with the seller and grow as a loyal customer. In return,, the seller works to maximize the value of the relationship for the customer’s benefit. In short, CRM provides selling organisations with the platform to obtain a competitive advantage by embracing customer needs and building value-driven long-term relationships.
Determinants of CRM
• • • • • • • • • Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms.
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Determinants of CRM
In addition to trust and value, salespeople must: Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth (must be honest); and Have a passionate interest in establishing and retaining a longterm relationship (e.g., have long-term perspective
Stages in the development of a Customer Relationship
The Pre-relationship Stage The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies’ mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized
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Stages in the Development of a Key-Account Relationship
Functions of Customer Relationship Management Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access.
The role of salespeople as relationship builders and promoters
Salespeople by: identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; encouraging the inter-organisational learning process; contributing to constructive resolution of existing conflicts; and
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leading the customer relationship development team are the individuals in any organisation who act both as relationship builders and as relationship promoters. Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customer’s needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment. Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication; and
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Work to add value and enhance mutual opportunities. Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salesperson’s job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a ―health‖ and profitable network of relationships.
Summary
CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that Of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value TO customers in an effort to turn prospects into customers, customers into loyal customers, AND loyal customers into partners.
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CRM IN ICICI BANK
Focus on ICICI Bank’s Initiatives The use of Customer Relationship Management (CRM) in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by banks in today’s competitive milieu. This has resulted in the adoption of various CRM initiatives by these banks to enable them achieve their objectives. The steps that banks follow in implementing Customer Relationship Management (CRM) are: Identifying CRM initiatives with reference to the objectives to be attained (such as increased number of customers, enhanced per-customer profitability, etc.), Setting measurable targets for each initiative in terms of growth in profits, number of customers, etc. and Evaluating and choosing the appropriate Customer Relationship Management (CRM) package that will help the company achieve its CRM goals (a comparison of pay-offs against investments could be carried out during the evaluation exercise). Customer Relationship Management (CRM) has been deployed in retail banking. The challenges in managing customer relations in retail banking are due to the multiple products being offered and the diverse channels being used for the distribution of the products. Customer expectation from banks can be summed up as: “Any time anywhere service, personalized offers, and lower payouts”. Aggressive marketing and promotions on the part of the banks have resulted in most customers happily switching loyalties to enjoy better privileges, thereby making the task of retaining them more difficult for the banks. The use of Customer Relationship Management (CRM) in banking has been essentially done for the following purposes: Targeting customers: It is necessary for banks to identify potential customers for approaching them with suitable offers. The transactional data that is generated through customer interactions and also by taking into account the profile of the customer (such as the lifecycle stage, economic background, family commitments,...
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RESEARCH METHOLODY Objectives of CRM
CRM, the technology, along with human resources of the company, enables the company to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer , relationship , and the management of relationship and the main objectives to implement CRM in the business strategy are:
To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively
Benefits
The following are the benefits of adopting CRM processes:
Develop better communication channels Collect customer related data Create detailed profiles of individual customers Increased customer satisfaction Access to customer account history, order information, and customer information at all touch points Identify new selling opportunities Increased market share and profit margin Increased revenues More effective reach and marketing Improved customer service and support Improved response time to customer requests for information Enhanced customer loyalty
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Improved ability to meet customer requirements Improved quality communication and networking Reduced costs of buying and using product and services Better stand against global competition
The purpose of this project is to understand that what is customer relationship management.Why organization want to retain there existing customers.Why organization introduce loyalty programmes to retain there existing customers. Why organizations are interested in one to one marketing.Why they want mass customization.How CR market is different from Transaction market.What is the difference between customer relationship management and relationship management.What is the role of service and technology in customer relationship marketing,What is the role of e-marketing in increasing customer satisfaction.
VARIABLES
CRM helps in retaining exsisting customers. CRM helps in generating life time value of customer. loyalty programs helps in retaining customers.
HYPOTHESIS
Customer Relationship may help in increasing profitability. Customer Relationship may help in increasing customer loyalty.
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Customer Relationship may help in increasing purchase. Customer Relationship may help reducing price sensitivity of customer.
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Sampling and Data Collection
1.Population: Branch Manager of ICICI BANK 2.Sample Size: 50 Employees of ICICI BANK 3.Survey and Questionnaire(one to one) 4.Discussion with heads 5.Also interacting with other intermediaries
35
Analysis and Interpretation
Analysis on the basis of customer profitability
CRM PROFIT 100
NON CRM 20
1 Series1, 0
2
Series1, 100
Analysis on the basis of customer loyalty
CRM CUSTOMER LOYALTY NON CRM
100
0
36
1
2
Series1, 20 Series1, 50
Analysis on the basis of purchase
1
2
Series1, 20 Series1, 50
37
CRM PURCHASE 50
NON CRM 20
Analysis on the basis of price sensitivity
CRM PRICE SENSITIVITY 20 NON CRM 80
1
2
Series1, 20 Series1, 80
INTERPRETATION
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1.It is found that customer is more profitable while applying CRM and less profitable while not applying CRM. 2.It is found that when we build relationship with customer,customer purchases more and purchases less when we donot build relationship.
3.Customer is more price sensitive when CRM is not there and less price sensitive when CRM is there.
4. While applying relationship component of CRM customer is more loyal towards the organization and less loyal when we donot build any relationship with him.
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Conclusion
Customer Relationship Management (or CRM) is a way for businesses to connect with their customer, increase profits, and provide better customer service. CRM is one very important factor in an effective overall business strategy and should not be overlooked. The following are some tips to keep in mind in developing a CRM strategy for your business and finding the CRM vendor(s) that is right for you. 1. It is all about the customer. It is easy to get caught up in flashy programs and elaborate IT techniques and lose focus of the bigger picture. All CRM is about enhancing customer satisfaction. Keep this in mind when selecting vendors and software applications. 2. Choose On-Demand. Whereas traditional CRM programs and services require companies to hire new IT people and demand extensive resources to implement elaborate programs, Ondemand CRM software comes with support. Vendors that offer On-demand solutions are especially great for small to medium size businesses, as well as those just getting into the CRM market. Choosing On-Demand will allow your business to focus its attention in expanding in other areas and is therefore the way to go for the twenty-first century company. 3. It’s not just software. This fits into the first point. Customer Relationship Management is not simply about implementing the right software packages. It is continual process of learning your customers’ needs, desires, and expectation and being able to respond in an effective manner. The right software applications, strategies, and methods will allow you to access, analyze and learn from customer data. But you still have to use that information to develop lasting relationships with customers. Therefore, it is important to know the reason behind each CRM application you use. 4. Know your options. It is important to understand that there are literally hundreds of CRM vendors competing for your business. Many will make unsubstantiated or completely meaningless claims. There are countless vendors who all claim to be ―number one.‖ It is essential that you spend the time investigating the vendors and the services they offer, comparing them to one another. This way you will be able to find the one that offers the services you need at a price that is fair. Remember that flash is not everything, and sometimes the company with the most effective CRM solutions will be the most unassuming. Start with the established vendors such as Siebel, Salesforce.com, NetSuite, IBM, Microsoft, and SAP. 5. Stay on top of the tech curve. This is not contradicting points one and three. The end is always customer service, but it is a fast paced world and you have to keep up. Major vendors are always updating their software and improving their services. To get the most out of your CRM applications, you need the most up-to-date technology. This does not mean buying into every tech fad. You should carefully consider whether a new technology is going to improve your customer relations, or just be a drain on resources.
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Properly implemented, customer relationship management will greatly improve your business. Satisfied customers will be more willing to do repeat business and refer more customers to you. It is worth the investment to help you learn from customers and respond to their needs. In selecting the right CRM solutions for your business, always keep the customer in mind, look for a reliable vendor, and stay on top of the latest technologies. These tips will help you run a more effective CRM campaign and improve your overall business
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BIBLIOGRAPHY
HANDBOOK OF RELATIONSHIP MARKETING BY JAGDISH N SHETH & ATUL PARVATIYAR,INDIAN EDITIONo
RELATIONSHIP MARKETING-TEXT AND CASES BY S.SHAJAHAN
CUSTOMER RELATIONSHIP MANAGEMENT—CONCEPT AND APPLICATION BY ALOK KUMAR,CHHABI SINHA,RAKESH SHARMA PUBLISHES BY BIZTANTRA
KOTLER,KELLER,JHA & KOSHY.MARKETING MANAGEMENT,PRENTICE HALL,13TH ED
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ANNEXURE
NAME____________ MOBILE NO_______________
QUESTIONNAIRE
DO YOU THINK CUSTOMER RELATIONSHIP IS IMPORTANT FOR SELLING PRODUCTS?
YES
NO
DON’T KNOW
DOES CUSTOMER RELATIONSHIP IMPROVES SALES ?
YES
NO
DON’T KNOW
DO YOU THINK BANKS SHOULD FOLLOW THIS STRAREGY?
YES
NO
DON’T KNOW
WHAT PERCENTAGE SHOULD BE CUSTOMER RELATION IN SALES?
YES
NO
DON’T KNOW
DO YOU THINKS IN BANKS CUSTOMER RELATION IMPROVES SALES?
YES
NO
DON’T KNOW
INTERNATIONAL SCHOOL OF BUSINESS & MEDIA PUNE
A DESSERTATION REPORT ON
“CUSTOMER RELATIONSHIP AND ITS IMPACT ON SALES A CASE STUDY ON ICICI BANK.”
In partial fulfillment of the requirements For the award of the POST GRADUATE DIPLOMA In MARKETING & FINANCE MARCH 2011
Submitted By:
2
ADARSH AGARWAL PGPBM (V1114)
3
CERTIFICATE
This is to certify that Adarsh Agarwal, a bonafide student of International School Of Business & Media, Pune pursuing Post Graduate programme in Marketing Management with minors in Finance, has worked under my guidance and supervision on the dissertation tiled ―Customer Relationship And its Impact On Sales A Case Study On ICICI Bank” For the purpose of dissertation work & report on the above topic, I certify that the candidate has completed the work in the prescribed period and the dissertation work in the incorporates the results of the job done by him during VIth trimester
Date: 07/03/2011
Guided by: Prof.Shibani Tyagi Bhoil ISB&M, Pune
4
ACKNOWLEDGEMENT
I Adarsh Agarwal student of ISB&M, PGPBM express my sincere gratitude and thanks to the respected President of ISB&M Dr. Pramod Kumar who was really very kind in giving me the start up with this project. I would like to pay my sincere thanks to Shibani Tyagi Bhoil, my mentor who really helped me in deciding & designing this project. I am indebted to Mrs. Shibani Bhoil Tyagi (Academic Chairperson), who carefully reviewed and guided the entire project and who offered many suggestions and recommendations reflected in this research work. Sheer blessings of my parents have helped me to complete my project. They have remained a source of inspiration for me who have always prayed for my success.
Adarsh Agarwal
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Preface
India is the most attractive banking sector in the world. Banking SectorRetail of industry are getting affected by this boom, favorably as well as unfavorably. Number of Banks in India is growing at electric rate and thus the challenge or opportunity of retaining the existing customers is also growing faster. This study focuses on the need of customer retention efforts such as loyalty programs etc., which enables the Indian banking sector to be competitive and better than others existing and upcoming banks. The study of existing loyalty programs and other customer retention efforts helps in understanding the current situation and strategies better. Their analysis provides a view of the relationship between the nature of the utility offered and the customer experience cycle by using Buyer Utility Map. It was found that loyalty card programs have not worked as well as expected, but the most important benefit of having loyalty program is that bankers can quantify new customer losses and introduce programs designed to retain or encourage the most profitable customers.
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CONTENTS
1: INTRODUCTION 1 About ICICI BANK 2 CRM 2.1 Customer Relationship 2.2 Benefits of CRM 2.3 Social Media 2.4 Technology 2.5 Understanding CRM 2.6 Determinants of CRM 2.7 Stages in CRM 2.8 Functions of CRM 2.9 Role of Salesperson 3 CRM in ICICI 2 Research Methodology 1 Purpose of study 2 Objective 3 Variables 4 Hypothesis 5 Sampling and Data Collection 3 Analysis and Interpretation 4 Conclusion 5 Bibliography Annexure 8-11 12-28 12 12 12-22 22-23 23-24 24-25 25 25-26 26-28 29 30-32 30 30 31 31 32 33-36 37-38 39
7
Questionnaire
40
8
ABOUT ICICI
BANK
ICICI Bank (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) (formerly Industrial Credit and Investment Corporation of India, is a major banking and financial services organization in India. It is the second largest bank in India and the largest private sector bank in India by market capitalization. The bank also has a network of 2,016 branches (as on 31 March 2010) and about 5,219 ATMs in India and presence in 18 countrie as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank's shares are listed on the stock exchanges at BSE, NSE, Kolkata and Vadodara (formerly Baroda) ; its ADRs trade on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly owned subsidiaries, branches and representatives offices in 19 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular. ICICI reported a 1.15% rise in net profit to 1,014.21 crore on a 1.29% increase in total income to 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's CASA ratio increased to 30% in 2008 from 25% in 2007. ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Punjab National Bank and Canara Bank — its main competitors.[8]
ICICI Bank HQ at BKC Mumbai
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In 1955, The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated at the initiative of World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. In 1994, ICICI established Banking Corporation as a banking subsidiary. Formerly known as Industrial Credit and Investment Corporation of India, ICICI Banking Corporation was later renamed as 'ICICI Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit cards, car loans etc. In 2001, ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s. In 2002, The Boards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the group's financing and banking operations, both wholesale and retail, into a single entity. At the same time, ICICI started its international expansion by opening representative offices in New York and London. In India, ICICI Bank bought the Shimla and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays Bank. In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai. In 2004, ICICI opened a representative office in Bangladesh to tap the extensive trade between that country, India and South Africa. In 2005, ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a branch in Dubai International Financial Centre and in Hong Kong. In 2006, ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI opened representative offices in Bangkok, Jakarta, and Kuala Lumpur. In 2007, ICICI amalgamated Sangli Bank, which was headquartered in Sangli, in Maharashtra State, and which had 158 branches in Maharashtra and another 31 in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural areas. With respect to the international sphere, ICICI also received permission from the government of Qatar to open a branch in Doha. Also, ICICI Bank Eurasia opened a second branch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted ICICI to convert its representative office in New York into a branch. ICICI also established a branch in Frankfurt. In 2009, ICICI made huge changes in its organisation like elimination of loss making department and restreching outsourced staff or renegotiate their charges in consequent to the recession. In addition to this, ICICI adopted a massive approach aims for cost control and cost cutting. In consequent of it, compesation to staff was not increased and no bonus declared for 2008-09. On 23 May ICICI Bank announced that it would merge with Bank of Rajasthan through a shareswap in a non-cash deal that values the Bank of Rajasthan at about 3,000 crore. ICICI announced that the merger expand ICICI Bank's branch network by 25%. On 18h October 2010, ICICI will inaugurate I-Express, an instant cross-border money transfer option for Non-Resident Indians (NRIs). This service will be available through the ICICI Bank's select partners in the Gulf Cooperation Council
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a) Branch Manager’s Functions: i) Cash Section ii) Deposit Section iii) Clearing Section iv) Accounts Section v) Staff Section vi) Loans Section vii) Locker and other services
1) Reserve Banks role as Banker to Banks a. Granting loans to other banks b. Checking of accounts, payments and interest of other banks c. Granting of status of Scheduled banks 2) Role in Exchange control a. Control value of Indian Rupee b. Appointing authorized dealers c. Reduce adverse balance of payments position d. Encouraging opening of Non Resident Accounts.
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3) RBI Role vis-à-vis Urban Co-op Banks:a. To keep check on business transacted b. Check on capital c. Current Account with RBI d. Control over advances being granted e. Submitting the accounts f. Timely inspection of these banks
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ABOUT CRM
Customer relationship management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.Customer relationship management describes a company-wide business strategy including customerinterface departments as well as other departments
Benefits of CRM
The use of a CRM system will confer several advantages to a company:
Quality and efficiency Decreased costs Decision support Enterprise agility
Marketing
CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect Relationship Management (PRM) solutions which track customer behaviour and nurture them from first contact to sale, often cutting out the active sales process altogether
Social media
Social media sites like Twitter, LinkedIn and Facebook are amplifying the voice of people in the marketplace and are having profound and far-reaching effects on the ways in which people buy.
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Customers can now research companies online and then ask for recommendations through social media channels, making their buying decision without contacting the company. People also use social media to share opinions and experiences on companies, products and services. As social media is not as widely moderated or censored as mainstream media, individuals can say anything they want about a company or brand, positive or negative. Increasingly, companies are looking to gain access to these conversations and take part in the dialogue. More than a few systems are now integrating to social networking sites. Social media promoters cite a number of business advantages, such as using online communities as a source of high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies can also leverage client stated habits and preferences to "hyper-target" their sales and marketing communications. Some analysts take the view that business-to-business marketers should proceed cautiously when weaving social media into their business processes. These observers recommend careful market research to determine if and where the phenomenon can provide measurable benefits for client interactions, sales and support. It is state that people feel their interactions are peer-to-peer between them and their contacts, and resent company involvement, sometimes responding with negatives about that company
Today, small and mid-size business owners are using open source CRM software to help streamline their business processes with the expectation of generating more sales opportunities. Open source CRM solutions should be able to manage existing customers, facilitate prospecting, generate online sales leads, launch and track marketing campaigns, analyze customer needs and preferences, integrate with existing applications and provide secure access to company data from any computer with an Internet connection and a browser. Here are a few keys to selecting the right CRM solution: • Ensure the CRM software you choose has the ability to capture all relevant customer and sales related information. At a minimum, your CRM solution must be able to easily record all interactions with your customers. One of the major benefits of CRM software is in its ability to help collect, store and share data to all appropriate areas in your business — in real-time. • Before you deploy a CRM tool you must first understand your existing sales and marketing workflow. Your CRM tool must be able to integrate with your existing processes or your sales and marketing team will not use it. • It is imperative to understand the level of customization you will require. Do you have the required technical skills on staff to implement modifications? Does the CRM tool provide an API (application programming Interface) for extending the platform? Will custom changes prevent
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future upgrade options? Answering these questions in advance will save you time and money later. • Determine if the CRM tool can integrate with applications used by your staff. For example, you must know whether the CRM tool can share or exchange data with your email client (e.g. Outlook or Thunderbird). You must also know if the CRM tool provides an easy to use import or export function for data mining and other sales analysis functions. • Determine the level of support you will require. Most open source providers make their money on service and support rather than software sales. Therefore, you should investigate the various levels of support provided by the open source vendor. • Research the level and quality of third party extensions. Quite often companies are able to find free or low cost extensions and avoid the expense of internal development. Third party extensions can add needed functionality and save your business time and money. For example, third party payment modules have become a necessary component for accepting electronic payment at the point of sale
Why you need a CRM application to ensure the success of your business Today, the world of business has its axis on CRM applications. CRM applications are the need of the day for all kinds of businesses, be it small or large. They ensure better productivity and profit by bringing about a marked improvement in the performance of the business via customer centric services. The fulcrum of every CRM application is the same. It aims at creating a better relationship with the customer with the help of carefully collected data. It is the higher interactivity provided via CRM applications that make them so effective. With a CRM application in place, you can view a 360 degree view of the customers behavioral patterns with regards to the business. Benefits There are many benefits of a CRM application for any business. You can easily collaborate them with your existing applications sharing data across applications. You can collect, store and share data and access it from virtually anywhere in the world. Every CRM application can be further customized according to the needs of a business. Your marketing and sales program will never be the same again post CRM applications. It brings about a degree of precision in sales programs.
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You can now track the customers? transactions with the help of real time updated data. Most CRM applications are designed in an easy to use format and no extra training is required to impart or use the CRM tools. There is an interesting phenomenon happening in the small and medium business segment. The widespread adoption of on-demand or software as a service (saas) CRM, led by Salesforce.com, and followed by companies such as NetSuite and RightNow Technologies. Well, that’s not really new. What is new is the expanded use of saas CRM software within these mini-enterprises, whether independent businesses or smaller divisions or departments of larger corporations, as their principal business platform. Since saas CRM manages the lifeblood of the business, sales and customers, and is increasingly more user friendly and flexible, it is becoming the preferred method for companies to manage their business. As a result, it is also becoming the de facto integration hub, or SOA enabler, for the smaller enterprise. A case in point is the experience of a well-known educational products sales company. It’s parent company sells educational toys through retailers. However, it launched a division that sells education-oriented items to schools and school districts, such as a handheld screen-based interactive tool that uses story narratives to teach English proficiency to non-native English speakers. This newer division established a territory sales model, with geographically-based sales executives selling to school districts in their area. The main corporate entity has only a handful of account managers who sell to large retailers such as Wal-Mart and Toys’r'Us. Whereas it is geared towards a retail sales model and related B2B IT infrastructure, the newer division had the infrastructure needs of a territory-based direct sales model. They required a CRM application to track leads, opportunities, and closed sales, and because of the reduced bandwidth of this smaller business unit, they required the efficiency gains of an automated commission calculating application. With no dedicated IT resources (IT resources are tied to corporate and are available ―on-loan‖ to the new division), and a need to ramp-up quickly, the division chose to bring the CRM and commission calculation functionality of the on-demand model. They chose Salesforce.com and Xactly Corporation, respectively, to fulfill these functions. The one on-premise application they had access to was Oracle Financials for accounting. The missing piece was to integrate these applications together. They chose to go with a packaged integration platform, adopting their subscription-based pricing model and on-premise software. In addition to being the CRM platform for the new division, Salesforce.com is also serving as the de facto ―enterprise service bus‖ to incorporate the accounting functionality of Oracle Financials, and to trigger Xactly to do it’s job of calculating sales commissions.
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This use of Salesforce.com as a de facto on-demand ESB platform was noted in an August 2007 white paper entitled ―Busting Myths of On-Demand Integration,‖ by Peter Coffee, Director of Platform Research. ―On-demand platforms exhibit the growing capability to provide a foundation for integration,‖ he said, citing a May 2007 announcement of the Salesforce.com SOA technology that enables the exposure and consumption of web services. In the same paragraph he notes: ―This is not to say, however, that a move to a Web services protocol strategy (such as that of using a saas application such as Salesforce.com) is a prerequisite for on-demand integration…there are options available for use with the salesforce.com platform‖ such as custom coding or a third party integration platform. In other words, on-demand applications, Salesforce.com being the most prominent, are quickly establishing themselves as integration hubs the way ESB providers such as Sonic Software, IBM’s Websphere, and BEA’s Weblogic were formulated to be. These SOA solutions, however, are cost-prohibitive for smaller companies, divisions or departments, and are often managed by enterprise IT staffs who are unresponsive to the needs of the department. These smaller enterprises have to fend for themselves, and are adopting ondemand applications that require little to no IT involvement. IT typically has to get involved when it comes to integration, according to Coffee. Such was the case with the educational products company. Their IT department provided the input that the newer division needed to give the technical ―thumbs-up‖ to the integration solution. But due to human bandwidth issues they decided to go with a fully delivered integration solution as opposed to the traditional toolset that is typically sold to IT departments. Tying together Salesforce.com, Oracle Financials and Xactly Corporation was done in the span of four months and cost less than $50,000. Why did it take that long? Because they had to take a breather between deciding on an integration vendor and a commission calculation vendor. Compare that with enterprise application integration projects which typically take nine months or more and cost hundreds of thousands of dollars, and you can see why Salesforce.com, together with fully configured integration solutions, are quickly becoming the ―integration hubs‖ or systems of record for the smaller enterprise.
There is an interesting phenomenon happening in the small and medium business segment. The widespread adoption of on-demand or software as a service (saas) CRM, led by Salesforce.com, and followed by companies such as NetSuite and RightNow Technologies.
18
Well, that’s not really new. What is new is the expanded use of saas CRM software within these mini-enterprises, whether independent businesses or smaller divisions or departments of larger corporations, as their principal business platform. Since saas CRM manages the lifeblood of the business, sales and customers, and is increasingly more user friendly and flexible, it is becoming the preferred method for companies to manage their business. As a result, it is also becoming the de facto integration hub, or SOA enabler, for the smaller enterprise. A case in point is the experience of a well-known educational products sales company. It’s parent company sells educational toys through retailers. However, it launched a division that sells education-oriented items to schools and school districts, such as a handheld screen-based interactive tool that uses story narratives to teach English proficiency to non-native English speakers. This newer division established a territory sales model, with geographically-based sales executives selling to school districts in their area. The main corporate entity has only a handful of account managers who sell to large retailers such as Wal-Mart and Toys’r'Us. Whereas it is geared towards a retail sales model and related B2B IT infrastructure, the newer division had the infrastructure needs of a territory-based direct sales model. They required a CRM application to track leads, opportunities, and closed sales, and because of the reduced bandwidth of this smaller business unit, they required the efficiency gains of an automated commission calculating application. With no dedicated IT resources (IT resources are tied to corporate and are available ―on-loan‖ to the new division), and a need to ramp-up quickly, the division chose to bring the CRM and commission calculation functionality of the on-demand model. They chose Salesforce.com and Xactly Corporation, respectively, to fulfill these functions. The one on-premise application they had access to was Oracle Financials for accounting. The missing piece was to integrate these applications together. They chose to go with a packaged integration platform, adopting their subscription-based pricing model and on-premise software. In addition to being the CRM platform for the new division, Salesforce.com is also serving as the de facto ―enterprise service bus‖ to incorporate the accounting functionality of Oracle Financials, and to trigger Xactly to do it’s job of calculating sales commissions. This use of Salesforce.com as a de facto on-demand ESB platform was noted in an August 2007 white paper entitled ―Busting Myths of On-Demand Integration,‖ by Peter Coffee, Director of Platform Research. ―On-demand platforms exhibit the growing capability to provide a foundation for integration,‖ he said, citing a May 2007 announcement of the Salesforce.com SOA technology that enables the exposure and consumption of web services.
19
In the same paragraph he notes: ―This is not to say, however, that a move to a Web services protocol strategy (such as that of using a saas application such as Salesforce.com) is a prerequisite for on-demand integration…there are options available for use with the salesforce.com platform‖ such as custom coding or a third party integration platform. In other words, on-demand applications, Salesforce.com being the most prominent, are quickly establishing themselves as integration hubs the way ESB providers such as Sonic Software, IBM’s Websphere, and BEA’s Weblogic were formulated to be. These SOA solutions, however, are cost-prohibitive for smaller companies, divisions or departments, and are often managed by enterprise IT staffs who are unresponsive to the needs of the department. These smaller enterprises have to fend for themselves, and are adopting ondemand applications that require little to no IT involvement. IT typically has to get involved when it comes to integration, according to Coffee. Such was the case with the educational products company. Their IT department provided the input that the newer division needed to give the technical ―thumbs-up‖ to the integration solution. But due to human bandwidth issues they decided to go with a fully delivered integration solution as opposed to the traditional toolset that is typically sold to IT departments. Tying together Salesforce.com, Oracle Financials and Xactly Corporation was done in the span of four months and cost less than $50,000. Why did it take that long? Because they had to take a breather between deciding on an integration vendor and a commission calculation vendor. Compare that with enterprise application integration projects which typically take nine months or more and cost hundreds of thousands of dollars, and you can see why Salesforce.com, together with fully configured integration solutions, are quickly becoming the ―integration hubs‖ or systems of record for the smaller enterprise.
Critical to any customer relationship, are the employees who interact with the customer. If an employee is satisfied and has the ability to execute customer strategies, they can fulfill the brand promise. So when companies wish to enhance their customer relationships, they have to realize that the success of CRM initiatives relies heavily on the Human Resource strategies. The rationale is inescapable: if a person desires valued relationships with the customers, he or she needs valued relationships with the employees. (1) This approach is often referred to as Employee Resource Management (ERM). Trained and motivated staff and a superior staff appraisal system is the key to customer contentment and hence, the foundation of CRM.
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INTRODUCTION
The contemporary market environment is characterized by general variability, difficult foresee ability of the competitive situation, surplus economy, and well informed, more experienced, more fastidious, exacting and more impatient consumers and users, who cease being loyal to traditional products and brands.(2) Therefore we have a dire need for effective tools for increasing customer value and CRM is the answer to that. Several vendors now offer HR consultancy tools to their CRM software. These ad-ons provide solutions for enhanced staff productivity, end-user self-service and improved reporting capabilities. CRM STRATEGY FOR HR CONSULTANTS When planning CRM strategies for Human Resources, a company needs to provide solution to some basic issues. Some of these issues are employee grievances, inter-group conflicts, lack of career paths for ambitious employees, dissatisfaction with salary and remuneration, unclear job roles, no visible performance measures, poor recruitment policies, no induction training for new employees, critical skill shortages and management ignorance towards any of these problems (3). APPLICATION Today’s evolved consumer behavior demands a lot from companies. It is no longer a competition only among your own products. An organization is up against a multitude of astute competitors. That is why every company needs something to diversify itself from the contenders. Physical and timely accessibility of product/services is just as important as giving a customer valued service. In that scenario, the staff’s approach to managing the relation with customers is the key factor for the success of Customer Relationship Management (4). The success of CRM will depend mainly on professional work approach of employees, on their motivation and skills and knowledge, and also on systematic and consistent measurement and appraisal of their achievement. The basic workforce attributes in the context of CRM are an uncompromising concentration on customer’s needs, competitiveness and will-to-win recognition, decisiveness, skill to improvise, the ability of a team work and the ability to lead a team. The willingness and skill of continuous training and self-education are also crucial factors, and in doing so the requirements for training must primarily come from the skill recognition and staff appraisal (5).
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CRM – Customer relationship management . . . ―is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction • It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied. Marketers must be concerned with the lifetime value of the customer. Attracting, retaining and growing customers Building customer relationships and customer equity Customer value/satisfaction Perceptions are key Meeting/exceeding expectations creates satisfaction Loyalty and retention Benefits of loyalty Loyalty increases as satisfaction levels increase Delighting consumers should be the goal Growing share of customer Cross-selling
• • • • • • • • • • • •
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•
Customer equity
The total combined customer lifetime values of all customers
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Customer loyalty and retention programs Adding financial benefits Adding social benefits Adding structural ties
Marketing Challenges • Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes.
Major marketing developments can be grouped under the theme of Connecting
Via technology
• Advances in computers, telecommunications, video-conferencing, etc. are major forces. • Databases allow for customization of products, messages and analysis of needs.
The Internet Facilitates anytime, anywhere connections Facilitates CRM Creates marketspaces
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With customers
_______________________________________________________________
•
Selective relationship management is key. Customer profitability analysis separates winners from losers.
•
Growing ―share of customer‖ Cross-selling and up-selling are helpful.
Direct sales to buyers are growing • • With marketing partners Partner relationship management involves: • • Connecting inside the company Connecting with outside partners • • • • With the world Globalization • • • • Competition New opportunities Supply chain management Strategic alliances
Greater concern for environmental and social responsibility Increased marketing by nonprofit and public-sector entities • Social marketing campaigns
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Understanding Customer Relationship Management (CRM)?
• • • • • • • • • • • CRM is a business philosophy based on upon individual customers and customised products and services supported by open lines of communication and feedback from the participating firms that mutually benefit both buying and selling organisations. The buying and selling firms enter into a “learning relationship‖, with the customer being willing to collaborate with the seller and grow as a loyal customer. In return,, the seller works to maximize the value of the relationship for the customer’s benefit. In short, CRM provides selling organisations with the platform to obtain a competitive advantage by embracing customer needs and building value-driven long-term relationships.
Determinants of CRM
• • • • • • • • • Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms.
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Determinants of CRM
In addition to trust and value, salespeople must: Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth (must be honest); and Have a passionate interest in establishing and retaining a longterm relationship (e.g., have long-term perspective
Stages in the development of a Customer Relationship
The Pre-relationship Stage The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies’ mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized
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Stages in the Development of a Key-Account Relationship
Functions of Customer Relationship Management Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access.
The role of salespeople as relationship builders and promoters
Salespeople by: identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; encouraging the inter-organisational learning process; contributing to constructive resolution of existing conflicts; and
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leading the customer relationship development team are the individuals in any organisation who act both as relationship builders and as relationship promoters. Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customer’s needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment. Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication; and
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Work to add value and enhance mutual opportunities. Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salesperson’s job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a ―health‖ and profitable network of relationships.
Summary
CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that Of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value TO customers in an effort to turn prospects into customers, customers into loyal customers, AND loyal customers into partners.
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CRM IN ICICI BANK
Focus on ICICI Bank’s Initiatives The use of Customer Relationship Management (CRM) in banking has gained importance with the aggressive strategies for customer acquisition and retention being employed by banks in today’s competitive milieu. This has resulted in the adoption of various CRM initiatives by these banks to enable them achieve their objectives. The steps that banks follow in implementing Customer Relationship Management (CRM) are: Identifying CRM initiatives with reference to the objectives to be attained (such as increased number of customers, enhanced per-customer profitability, etc.), Setting measurable targets for each initiative in terms of growth in profits, number of customers, etc. and Evaluating and choosing the appropriate Customer Relationship Management (CRM) package that will help the company achieve its CRM goals (a comparison of pay-offs against investments could be carried out during the evaluation exercise). Customer Relationship Management (CRM) has been deployed in retail banking. The challenges in managing customer relations in retail banking are due to the multiple products being offered and the diverse channels being used for the distribution of the products. Customer expectation from banks can be summed up as: “Any time anywhere service, personalized offers, and lower payouts”. Aggressive marketing and promotions on the part of the banks have resulted in most customers happily switching loyalties to enjoy better privileges, thereby making the task of retaining them more difficult for the banks. The use of Customer Relationship Management (CRM) in banking has been essentially done for the following purposes: Targeting customers: It is necessary for banks to identify potential customers for approaching them with suitable offers. The transactional data that is generated through customer interactions and also by taking into account the profile of the customer (such as the lifecycle stage, economic background, family commitments,...
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RESEARCH METHOLODY Objectives of CRM
CRM, the technology, along with human resources of the company, enables the company to analyze the behavior of customers and their value. The main areas of focus are as the name suggests: customer , relationship , and the management of relationship and the main objectives to implement CRM in the business strategy are:
To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively
Benefits
The following are the benefits of adopting CRM processes:
Develop better communication channels Collect customer related data Create detailed profiles of individual customers Increased customer satisfaction Access to customer account history, order information, and customer information at all touch points Identify new selling opportunities Increased market share and profit margin Increased revenues More effective reach and marketing Improved customer service and support Improved response time to customer requests for information Enhanced customer loyalty
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Improved ability to meet customer requirements Improved quality communication and networking Reduced costs of buying and using product and services Better stand against global competition
The purpose of this project is to understand that what is customer relationship management.Why organization want to retain there existing customers.Why organization introduce loyalty programmes to retain there existing customers. Why organizations are interested in one to one marketing.Why they want mass customization.How CR market is different from Transaction market.What is the difference between customer relationship management and relationship management.What is the role of service and technology in customer relationship marketing,What is the role of e-marketing in increasing customer satisfaction.
VARIABLES
CRM helps in retaining exsisting customers. CRM helps in generating life time value of customer. loyalty programs helps in retaining customers.
HYPOTHESIS
Customer Relationship may help in increasing profitability. Customer Relationship may help in increasing customer loyalty.
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Customer Relationship may help in increasing purchase. Customer Relationship may help reducing price sensitivity of customer.
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Sampling and Data Collection
1.Population: Branch Manager of ICICI BANK 2.Sample Size: 50 Employees of ICICI BANK 3.Survey and Questionnaire(one to one) 4.Discussion with heads 5.Also interacting with other intermediaries
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Analysis and Interpretation
Analysis on the basis of customer profitability
CRM PROFIT 100
NON CRM 20
1 Series1, 0
2
Series1, 100
Analysis on the basis of customer loyalty
CRM CUSTOMER LOYALTY NON CRM
100
0
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1
2
Series1, 20 Series1, 50
Analysis on the basis of purchase
1
2
Series1, 20 Series1, 50
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CRM PURCHASE 50
NON CRM 20
Analysis on the basis of price sensitivity
CRM PRICE SENSITIVITY 20 NON CRM 80
1
2
Series1, 20 Series1, 80
INTERPRETATION
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1.It is found that customer is more profitable while applying CRM and less profitable while not applying CRM. 2.It is found that when we build relationship with customer,customer purchases more and purchases less when we donot build relationship.
3.Customer is more price sensitive when CRM is not there and less price sensitive when CRM is there.
4. While applying relationship component of CRM customer is more loyal towards the organization and less loyal when we donot build any relationship with him.
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Conclusion
Customer Relationship Management (or CRM) is a way for businesses to connect with their customer, increase profits, and provide better customer service. CRM is one very important factor in an effective overall business strategy and should not be overlooked. The following are some tips to keep in mind in developing a CRM strategy for your business and finding the CRM vendor(s) that is right for you. 1. It is all about the customer. It is easy to get caught up in flashy programs and elaborate IT techniques and lose focus of the bigger picture. All CRM is about enhancing customer satisfaction. Keep this in mind when selecting vendors and software applications. 2. Choose On-Demand. Whereas traditional CRM programs and services require companies to hire new IT people and demand extensive resources to implement elaborate programs, Ondemand CRM software comes with support. Vendors that offer On-demand solutions are especially great for small to medium size businesses, as well as those just getting into the CRM market. Choosing On-Demand will allow your business to focus its attention in expanding in other areas and is therefore the way to go for the twenty-first century company. 3. It’s not just software. This fits into the first point. Customer Relationship Management is not simply about implementing the right software packages. It is continual process of learning your customers’ needs, desires, and expectation and being able to respond in an effective manner. The right software applications, strategies, and methods will allow you to access, analyze and learn from customer data. But you still have to use that information to develop lasting relationships with customers. Therefore, it is important to know the reason behind each CRM application you use. 4. Know your options. It is important to understand that there are literally hundreds of CRM vendors competing for your business. Many will make unsubstantiated or completely meaningless claims. There are countless vendors who all claim to be ―number one.‖ It is essential that you spend the time investigating the vendors and the services they offer, comparing them to one another. This way you will be able to find the one that offers the services you need at a price that is fair. Remember that flash is not everything, and sometimes the company with the most effective CRM solutions will be the most unassuming. Start with the established vendors such as Siebel, Salesforce.com, NetSuite, IBM, Microsoft, and SAP. 5. Stay on top of the tech curve. This is not contradicting points one and three. The end is always customer service, but it is a fast paced world and you have to keep up. Major vendors are always updating their software and improving their services. To get the most out of your CRM applications, you need the most up-to-date technology. This does not mean buying into every tech fad. You should carefully consider whether a new technology is going to improve your customer relations, or just be a drain on resources.
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Properly implemented, customer relationship management will greatly improve your business. Satisfied customers will be more willing to do repeat business and refer more customers to you. It is worth the investment to help you learn from customers and respond to their needs. In selecting the right CRM solutions for your business, always keep the customer in mind, look for a reliable vendor, and stay on top of the latest technologies. These tips will help you run a more effective CRM campaign and improve your overall business
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BIBLIOGRAPHY
HANDBOOK OF RELATIONSHIP MARKETING BY JAGDISH N SHETH & ATUL PARVATIYAR,INDIAN EDITIONo
RELATIONSHIP MARKETING-TEXT AND CASES BY S.SHAJAHAN
CUSTOMER RELATIONSHIP MANAGEMENT—CONCEPT AND APPLICATION BY ALOK KUMAR,CHHABI SINHA,RAKESH SHARMA PUBLISHES BY BIZTANTRA
KOTLER,KELLER,JHA & KOSHY.MARKETING MANAGEMENT,PRENTICE HALL,13TH ED
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ANNEXURE
NAME____________ MOBILE NO_______________
QUESTIONNAIRE
DO YOU THINK CUSTOMER RELATIONSHIP IS IMPORTANT FOR SELLING PRODUCTS?
YES
NO
DON’T KNOW
DOES CUSTOMER RELATIONSHIP IMPROVES SALES ?
YES
NO
DON’T KNOW
DO YOU THINK BANKS SHOULD FOLLOW THIS STRAREGY?
YES
NO
DON’T KNOW
WHAT PERCENTAGE SHOULD BE CUSTOMER RELATION IN SALES?
YES
NO
DON’T KNOW
DO YOU THINKS IN BANKS CUSTOMER RELATION IMPROVES SALES?
YES
NO
DON’T KNOW
