Opportunities for improving CRM practices

CRM is an essential component of the corporate strategy of Banksthe means of

differentiating themselves from competitors in the eyes of the customer.
By taking steps to implement a truly consumer-centric approach to relationship
management, Banks will be better positioned to acquire, develop and retain high-value
customers.
The entire focus of CRM strategy of any bank should be to know your customer, reach your
customer and grow your customer. Know Your Customer is about understanding the
individual customer's value and needs. Once a dialogue begun with individual customers, it
creates a learning relationship with the customers; where each interaction becomes an
opportunity to build and extend the relationship with that customer. The more extensive
the learning relationship, the more invested the customer becomes in the relationship and
the more difficult it will be for the customer to switch to a competitor. Reach Your
Customer is about reaching the right customers with the right offer at the right time
through the right channel. Grow Your Customer refers to the company's ability to
effectively execute Marketing strategies based on its knowledge of customer share and
customer lifetime value.
With increased number of banks, products and services and practically, nil switching costs
customers are easily switching banks whenever they find better services and products.
Banks are finding it tough to get new customers, and more importantly, retain existing
customers. There are number of opportunities for improving CRM practices:

Customer complaints and feedbacks should be carefully scrutinized and special care and
steps should be taken to bring innovation in service accordingly.

Focus on new age customers by making advanced technology based system and availability
in digital world
Mobile apps and mobile wallet/ internet banking
Social media ( to share a service complaint)
Online A/c opening facility, online loan application, online information ( e.g. to
compare )
Introduce branchless banking: visit a branch 85 less (2013 <-> 2005) and give special
incentives to such customers by reduced charges and loan processing fees.
Value-added services like mobile and DTH recharge
Facilitating stop-cheque and cheque status enquiry in ATMs.

Outsourcing of CRM back offices for cost reduction and more efficient customer handling,
like providing product information, balance enquiry, status update on customer requests
and loan applications, thereby reducing the burden of front line staff.

Periodic meetings must be conducted by Banks like Customer service committees and
Customer meets in order to provide necessary information and details to the customers.
Customer relationship management strategy, functional oriented strategy, value added
services strategy are the most influencing factors adopted by the banks.

By using Business Intelligence techniques, banks can have insights into customer
preferences and their behavior patterns for customer retention, acquisition, and for
effective cross selling of their products and services.

Data mining technologies for various predictive modeling and advanced scoring initiatives
must be initiated to strengthen Banks risk management framework in the area of retail
lending. Estimating the share of wallet of potential customers should be studied with data
collection from various sources and efforts should be focused on specific customers rather
than entire customer base for cross selling or up- selling as saving cost on fruitless efforts
should also be viewed as revenue addition to the company.

Front office executives should stop looking at customers for multiple product promotion
and start focusing on making the customers feels comfortable in terms of service
consumption.

The Bank should come up with a solution to solve high waiting line problem especially
during peak time. Such operational issues should be sorted out and implemented in all
branches of Bank. Token system should be adopted by every branch to do away with long
queues and bring better service to the customers.

The Bank can offer better services within less TAT which can become a differentiating factor
and can reduce the churn rate thus improves the overall profitability of the bank.

Management should take special care that people who are trained are executing the skills
learnt and are posted in similar kind of roles to ensure that the time and cost involved in
training them does not go waste. Also feedback should be taken from employees as to how
much better equip they felt in handling situations after training and what extra areas need
to be covered.

Incorporating new emerging CRM technologies like Corporate Performance Management

(CPM) & Customer Interaction Management (CIM) will help in better interaction with

customers. These new communication channels help companies add customer-facing touch
points to create a 360-degree interaction capability and enhance customer communication.

Employee's performance should be tracked on daily basis and instant recognition should be
granted to the employees for bringing up customer delight and customer retention efforts
undertaken by them. Performance linked incentives to employees should be raised and
employee's performance should have a weightage for further promotions and career
advancement.

There should be coordination amongst various departments of Bank to keep the overall
objective of customer satisfaction and TAT intact. e.g the commitments of the sales team
and loan applications processing centers should move in accordance with each other.

Also employees should be given some leeway for taking decisions to ensure speedy service
for their high value customers and generate sense of accomplishment among employees.