Professional Documents
Culture Documents
Kallol Das
School of Management, International Institute of Information Technology, P-14
Rajiv Gandhi Infotech Park, Hinjawadi, Pune, Maharashtra, India
E-mail: getkdas@gmail.com
Jitesh Parmar
Shrimad Rajchandra Institute of Management & Computer Application
Gopal Vidyanagar, Bardoli Mahuva Road, Dist. Surat, Gujarat, India
E-mail: jiteshsp@gmail.com
Abstract
The current study explores the association between deployment of customer relationship
management (CRM) best practices and loyalty of profitable customers in Indian retail
banking sector. The study comprises two parts. The first part called the CRM best practices
survey involves the use of descriptive research design. The second part viz. case study
research involves the use of embedded customer loyalty survey. The hypothesis testing
based on literal and theoretical replication is done using the concept of pattern matching.
The findings reveal that there is no perfect bank, as yet, across the three bank types, which
has deployed all the 29 CRM best practices to the fullest extent. The results of literal and
theoretical replication done by using pattern matching technique indicates no strong
association between deployment of CRM best practices in scheduled commercial banks and
loyalty levels of both high and medium relationship value retail customers. The study
develops a list of 29 CRM best practices, which may be helpful to the organizations toward
achieving comprehensive CRM deployment. The results also imply that going for CRM
deployment may not be a profitable strategy for retail banks, particularly in the Indian
context.
1. Introduction
The current study explores the association between deployment of customer relationship management
(CRM) best practices and loyalty of profitable customers in scheduled commercial banks of India with
respect to retail banking segment. This is important because a strong positive association will act as a
significant motivator to organizations for making larger investments towards deployment of CRM best
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practices. On the other hand, a weak association will fail to provide necessary encouragement to the
same organizations for CRM deployment. The paper begins with an introduction to Indian banking
industry and delineates the scope of the study. It is followed by a literature review on CRM best
practices as well as customer loyalty. The methodology used is discussed in detail followed by the
findings and implications.
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Figure 1: Structure of Scheduled Banks in India
Scheduled Banks in
India
Surat is the ninth largest city of India in terms of population as per 2001 census (Population,
2006). The city is ranked 70th amongst the most populous cities of the world for the year 2006 with an
estimated population of 3.9 million (vom Hove, 2006). The city was ranked 131st amongst the
wealthiest cities of the world for the year 2005 and is predicted to be the 4th fastest growing city of the
world (second in the country) for the period 2006 to 2020 (vom Hove, 2006). All these facts make
Surat a very lucrative market for the banks, particularly, in the retail banking segment. This also
explains the high representation of scheduled commercial banks in the city.
2. Literature Review
CRM has been a part of marketing literature since more than a decade. Interestingly, there is still much
debate over what exactly constitutes CRM (Nevin, 1995; Parvatiyar and Sheth, 2001; Sin et al., 2005).
According to Parvatiyar and Sheth (2001), some of the themes represent a narrow functional marketing
perspective while others offer a perspective that is broad and paradigmatic in approach and orientation.
One example of a narrow perspective is to view CRM as database marketing (Peppers and Rogers,
1995) emphasizing promotional aspects of marketing by leveraging customer databases. Other
examples of a narrow approach include electronic marketing (Blattberg and Deighton, 1991) and
aftermarketing (Vavra, 1992). Electronic marketing encompasses all marketing efforts supported by
information technology while aftermarketing efforts focus on customer bonding after the sale is made.
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On a broader level, CRM may mean customer retention or partnering (Peppers and Rogers, 1993,
Vavra, 1992).
In order to develop a comprehensive list of CRM practices, it is essential to identify the key
constructs of CRM. In this direction, Sin et al. (2005) have proposed that CRM comprises the
following four constructs: Key customer focus, CRM organization, Knowledge management and
Technology-based CRM. Each of these is discussed as follows.
CRM organization
It implies organizing the whole organization around CRM, which will lead to considerations like
organizational structure, commitment of resources and human resources management (Sin et al., 2005).
Knowledge management
Key facets of this construct include learning about customer needs and wants, dissemination and
sharing of this knowledge and action (Sin et al., 2005).
Technology-based CRM
Technology plays the role of enabler in CRM deployment (Das, 2004) and allows firms to achieve
greater customization and better service at lower cost (Sin et al., 2005).
A review of academic and practitioners’ literature was done to develop a comprehensive list of
CRM practices. Please refer appendix I for the practices and their respective chief sources.
Going over to customer loyalty, Oliver (1999) defined it as a deeply held commitment to re-buy
or re-patronize a preferred product or service in the future despite situation influence and marketing
efforts having the potential to cause switching behaviour. Thus, loyalty has both an attitudinal and
behavioural dimension (Day, 1969; Dick and Basu, 1994). Behavioural loyalty will include examples
like repeat purchase, word of mouth, etc while attitudinal loyalty will comprise examples like trust or
emotional attachment (Baumann et al., 2005).
Further, behavioural loyalty does not necessarily reflect attitudinal loyalty, because there might
exist other factors that prevent customers from defecting (Aldlaigan and Buttle, 2005; Liljander and
Roos, 2002; Reinartz and Kumar, 2002). Customer loyalty has been additionally related to profit levels
(Reichheld and Teal, 1996). Besides, customer loyalty is one of the key objectives of CRM (Das, 2004;
Lindgreen, 2004; Parvatiyar and Sheth, 2001; Payne, 2002; Sin et al., 2005).
3. Study Outline
The current study has two parts as mentioned below:
a. CRM best practices survey
b. Case study research
Following are the research questions associated with the current study:
1. What are the best practices with regard to CRM deployment?
2. What is the extent of deployment of the CRM best practices in the Indian retail banking
sector?
3. What is the association between deployment of CRM best practices and loyalty of
profitable retail customers in the Indian retail banking sector?
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as “strongly disagree (1)”, “disagree (2)”, “neutral (3)”, “agree (4)” and “strongly agree (5)” so as to
suggest roughly equal intervals between scale pointers, which were immediately accepted.
Regarding external validity, the findings can be generalized to the population of 49 scheduled
commercial banks located in Surat city and selected for the study and only with respect to the retail
banking segment. Further, as the practices of each of the banks are largely consistent across cities/
regions, we can safely infer that the findings can be further generalized to the larger Indian retail
banking sector.
Reliability was computed using Cronbach’s coefficient alpha for the entire set of 29 best
practice statements and was found to be 0.95, which is much higher than the threshold value of 0.65.
Therefore, the scale can be considered to be reliable (Nunnaly, 1978).
4.5. Limitations
The current survey provides for data collection from a single respondent, which, however, can affect
the findings. A more appropriate alternative would have been to collect data from more than one
employee and that too across the three management levels, namely top, middle and lower management.
The same was, however, not attempted for reasons of exorbitant cost and time. However, as mentioned
earlier, all care was taken to ensure that the responses collected are representative.
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Table 1: Deployment of CRM Best Practices - Public Sector Banks
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Table 2: Deployment of CRM Best Practices - Private Banks
Comparison of Deployment
The PBs are further bifurcated into NPBs and OPBs and their respective mean scores are computed.
The results are shown in the table 4. The OPBs are the worst performers in terms of deployment of
CRM best practices. This is followed by PSBs, NPBs and FBs respectively.
division of the bank under investigation) in relation to the “case” – the CRM best practices and the
dotted lines between the two indicate that the boundaries between the case and the context are not
likely to be sharp. Further, the case study research design comprises an embedded loyalty survey
involving the profitable retail customers of the same bank.
In the present case study research design, the method of selection of cases used is extreme or
deviant cases (Flyvbjerg, 2006), which enables the testing of propositions/ hypotheses. In the current
study, the top scorers in the CRM best practices survey, termed as ‘CRM-strong’ banks, will be
identified across PSBs and PBs for conduct of embedded customer loyalty survey. In addition, the
banks which have scored lowest in terms of deployment of CRM best practices, termed ‘CRM-weak’
banks, across PSBs and PBs will be similarly identified for the conduct of embedded survey. The FBs
did not allow the conduct of the same.
Construct validity will be achieved by use of multiple sources of evidence (Flyvberg, 2006;
Yin, 2003). This was done to further ensure that the responses given by the managers to the CRM best
practices survey are truly representative.
The use of questionnaires is a major way of increasing the reliability of case study research
(Yin, 2003). Subsequently, for doing a multiple-case study (as has been done here), the use of the same
questionnaires in conducting the data collection will automatically help in improving the reliability of
the study.
For addressing internal validity, pattern matching has been suggested (Yin, 2003). According to
Yin (2003), the pattern matching technique comprises literal and theoretical replications, which are
useful in testing of propositions/ hypotheses. The theoretical framework needs to state the conditions
under which a particular phenomenon is likely to be found (a literal replication) as well as the
conditions when it is not likely to be found (a theoretical replication).
In the present research design, both literal and theoretical replication will be done to explore the
association between deployment of CRM best practices and loyalty of profitable retail customers. In
this direction, the loyalty levels of High and Medium Relationship Value (RV) retail customers from
three CRM-strong banks across both PSBs and PBs are measured to achieve literal replication. In order
to achieve theoretical replication, the loyalty levels of High and Medium RV retail customers of two
CRM-weak banks are measured across both PSBs and PBs.
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Figure 2: Case Study Research Design for Public Sector Banks (PSBs)
Literal Replication
Theoretical Replication
For the purpose of the current study, High RV retail customers are defined as those customers
having an average annual total business of Rs. 1 million ($1 = Rs. 47.77 as of 1st July, 2009) and more
with the bank across retail deposits, loans, credit cards, demat, mutual fund, insurance and so forth.
Similarly, Medium RV retail customers are defined as those having an average annual total business
across different products in the range of Rs. 0.05 to Rs. 0.99 million. Discussions with managers in
PSBs and PBs confirmed that these two segments fairly represented high and medium relationship
value/ size customers and having high and medium contribution respectively to the bank’s retail
segment profitability.
The deployment of best practices is supposed to lead to superior performance with respect to
profits, retention, loyalty, and so forth (Camp, 1989). The current study focuses on the impact of
deployment of CRM best practices on loyalty of profitable retail customers. Only customer loyalty was
selected amongst the various performance indicators because of difficulty in accessing data with
respect to other important measures like customer retention and profitability. Further, most of the
banks covered in the case study design do not compute profits separately for the retail banking
segment. A few banks do so but their definition of retail banking includes small business enterprises/
small and medium scale enterprises as well.
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Figure 3: Case Study Research Design for Private Banks (PBs)
Literal Replication
Theoretical Replication
According to Sin et al. (2005), the CRM efforts are targeted at the profitable customers.
Further, these efforts are intended to lead to increased customer loyalty (Das, 2004; Lindgreen, 2004;
Parvatiyar and Sheth, 2001; Sin et al., 2005). Therefore, the current study explores the association
between the deployment of CRM best practices and loyalty with respect to profitable retail customers.
Further, as discussed earlier, the profitable retail customers are classified as High and Medium RV
customers making high and medium contribution to the bank’s profitability respectively. Thus, the
study will try to explore the veracity of the following two hypotheses using pattern matching technique
consisting of literal and theoretical replication.
Hypothesis 1 (H1): There is a strong association between deployment of CRM Best Practices in
scheduled commercial banks and loyalty levels of High Relationship Value retail customers.
Null Hypothesis 1 (Ho1): There is no strong association between deployment of CRM best
practices in scheduled commercial banks and loyalty levels of High Relationship Value retail
customers.
Hypothesis 2 (H2): There is a strong association between deployment of CRM Best Practices in
scheduled commercial banks and loyalty levels of Medium Relationship Value retail customers.
Null Hypothesis 2 (Ho2): There is no strong association between deployment of CRM best
practices in scheduled commercial banks and loyalty levels of Medium Relationship Value retail
customers.
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As per the pattern matching technique, the data are matched with potential patterns (hypothesis
and null hypothesis) to identify the pattern which produces the best match and accordingly either the
hypothesis or the null hypothesis is upheld (Campbell, 1975).
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6.5. Limitations
As discussed earlier, the findings of the loyalty survey cannot be fully generalized. Second, since the
questionnaires were mostly filled by the customers in the presence of the bank managers/officials, it is
quite possible that the respondents may avoid giving negative responses fearing retaliation. It is also
possible that the bank managers might have given the questionnaires only to those customers who have
high loyalty towards the bank and that way, again, biasing the results. However, the data collection
exercise was very closely monitored to minimize possible distortions.
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Table 6: CRM Best Practices’ Deployment Vs. Customer Loyalty (High RV): CRM-Strong Public Sector
Banks
Table 7: CRM Best Practices’ Deployment Vs. Customer Loyalty (Medium RV): CRM-Strong Public Sector
Banks
Repeating the same pattern matching exercise using medium RV retail customers (see table 7)
again indicates the lack of strong association between the deployment of CRM best practices and
customer loyalty. Here again, State Bank of India and Bank of Baroda, which have lower deployment
of CRM best practices as compared to Industrial Development Bank of India, enjoy higher levels of
loyalty of their medium RV retail customers.
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Table 8: CRM Best Practices’ Deployment Vs. Customer Loyalty (High RV): CRM-Weak Public Sector
Banks
The sole purpose of studying the loyalty levels of CRM-weak PSBs is to achieve theoretical
replication. In other words, the loyalty levels of retail customers of CRM-weak PSBs should be lesser
than that of CRM-strong PSBs. However, a simple pattern matching done across tables 6 and 8 reveals
that both State Bank of Saurashtra and UCO Bank enjoy higher loyalty levels of their high RV retail
customers as compared to that of Industrial Development Bank of India, the CRM-strong PSB.
Table 9: CRM Best Practices’ Deployment Vs. Customer Loyalty (Medium RV): CRM-Weak Public Sector
Banks
Similarly, using pattern matching done across tables 7 and 9 has revealed that State Bank of
Saurashtra and UCO Bank also enjoy higher levels of loyalty of their medium RV retail customers as
compared to that of CRM-strong Industrial Development Bank of India.
Thus, like in the case of literal replication, even theoretical replication indicates the absence of
strong association between deployment of CRM best practices and customer loyalty (for the two
customer segments studied) with respect to PSBs.
Table 10: CRM Best Practices’ Deployment Vs. Customer Loyalty (High RV): CRM-Strong Private Banks
Table 11: CRM Best Practices’ Deployment Vs. Customer Loyalty (Medium RV): CRM-Strong Private Banks
Pattern matching done on table 10 reveals that as the deployment of CRM best practices
decreases from ICICI Bank (4.45) to HDFC Bank (4.41) to Kotak Mahindra Bank (4.10), the loyalty
levels of high RV retail customers do not follow the same pattern. Similarly, applying pattern matching
on table 11 for medium RV retail customers gives similar results. Thus, literal replication indicates
lack of strong association between deployment of CRM best practices and loyalty levels of both high
and medium RV retail customers for CRM-strong PBs.
Table 12: CRM Best Practices’ Deployment Vs. Customer Loyalty (High RV): CRM-Weak Private Banks
Just like in the case of PSBs, theoretical replication is attempted also in the case of PBs, which
stipulates that the loyalty levels of the CRM-weak PBs should be lower than that of CRM-strong PBs.
However, pattern matching reveals that the loyalty levels of City Union Bank are higher than that of
ICICI Bank, HDFC Bank and Kotak Mahindra Bank for high RV retail customers (see tables 10 and
12).
Similarly, comparing the patterns emerging from tables 11 and 13 (with respect to medium RV
retail customers) reveals that City Union Bank again enjoys higher levels of loyalty as compared to that
of ICICI Bank, HDFC Bank and Kotak Mahindra Bank. Further, even in the case of Catholic Syrian
Bank, the customer loyalty levels are higher than that of CRM-strong ICICI Bank and Kotak Mahindra
Bank.
Table 13: CRM Best Practices’ Deployment Versus Customer Loyalty (Medium RV): CRM-Weak Private
Banks
Based on the results of literal and theoretical replication done by using pattern matching technique
covering PSBs and PBs, we fail to reject the first null hypothesis (Ho1) which states that there is no
strong association between the deployment of CRM best practices in scheduled commercial banks and
loyalty levels of high RV retail customers.
Likewise, we also fail to reject the second null hypothesis (Ho2) which states that there is no
strong association between the deployment of CRM best practices in scheduled commercial banks and
loyalty levels of medium RV retail customers.
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Appendix I
CRM Practices Developed From Chief Source
Academic and Practitioners’ Literature
1. My bank has a clearly defined mission and business strategy, driven by customer needs and (Das, 2004)
the performance of customer relationships.
2. Our top management team provides leadership for building and maintaining customer (Sin et al., 2005)
relationships as a major goal of my bank.
3. The top management shows by its actions that everything begins and ends with customers. (Whiteley, 1995)
4. Our top management team spends much time with key customers. (Hiebeler et al., 1998)
5. Our bank’s culture emphasizes the values of honesty, transparency and fairness. (Zeithaml and Bitner,
2003)
6. We do not make promises to customers that we cannot deliver. (Gronroos, 2006)
7. Our Core Values are emphatic about Relationship Building. (Das, 2004)
8. Our bank’s structure is meticulously designed around our customers. (Daffy, 1999)
9. Our business objective is primarily driven by customer relationships. (Whiteley, 1995)
10. My bank has established clear business goals related to customer acquisition, development, (Parvatiyar and Sheth,
retention and reactivation. 2001)
11. Our board meetings give a high priority to non-financial success factors such as customer (Parvatiyar and Sheth,
satisfaction, employee satisfaction, etc. 2001)
12. Customer metrics are used to facilitate strategy formulation and decision-making. (Hiebeler et al., 1998)
13. Our competitive advantage is based on building and maintaining long-term customer (Hiebeler et al., 1998)
relationships.
14. My bank is well organized and integrated internally to suit the needs of our customers. (Hiebeler et al., 1998)
15. Customer relationships are the crux of our existence. (Daffy, 1999)
16. My bank embraces CRM for mutual benefits.
17. We do customer segmentation using Customer Lifetime Value (CLV)/ related metrics. (Cokins, 2002)
18. Customer Lifetime Value (CLV) is the essential criterion for key customer selection. (Cokins, 2002)
19. My bank regularly assesses the lifetime value of each customer. (Daffy, 1999)
20. Investments in customer relationships are based on the lifetime value of each customer of (Cokins, 2002)
my bank.
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21. We regularly track our investments in customers using metrics like Return on Relationship (Peppers & Rogers,
(RoR) /Return on Customer (RoC) 1995); (Gummesson,
2004)
22. We have a Loyalty program to enhance the Lifetime Value of our Customers. (Cooper et al., 2005)
23. We provide increased customer convenience using a variety of distribution channels. (Hiebeler et al., 1998)
24. We regularly do customer service audit using mystery shoppers, customer comments and (Daffy, 1999)
surveys.
25. We welcome complaints from customers. (Daffy, 1999)
26. We have formal complaint systems, which cover both written and verbal complaints, and (Daffy, 1999)
inform customers of the progress of the complaint.
27. We have effective customer recovery strategies including guarantees for service failures. (Zeithaml & Bitner,
2003)
28. We believe that customers are the purpose of all our activities and keep communicating the (Daffy, 1999)
same to all our employees and suppliers
29. Our senior managers are expected to spend time in customer-contact areas, both observing (Daffy, 1999)
and working in customer service jobs.
30. Customers can expect exactly when services will be performed. (Sin et al., 2005)
31. My bank has the service resources and excellence to succeed in CRM. (Sin et al., 2005)
32. Our top management is actively involved in understanding, interacting with and marketing (Hiebeler et al., 1998)
to customers and asking them for feedback and ideas.
33. A team comprising representatives from various groups / departments goes out regularly to (Hiebeler et al., 1998)
meet with customers.
34. My bank understands individual customer's character, needs and preferences and behaviors (Sin et al., 2005)
through past interactions with us.
35. We regularly measure and monitor employee satisfaction, loyalty, and commitment. (Daffy, 1999)
36. We regularly measure and monitor customer satisfaction, loyalty, and commitment. (Hiebeler et al., 1998)
37. We use information from customers to design or improve our products or services. (Hiebeler et al., 1998)
38. We never get tired of asking customers for feedback about our performance through as (Whiteley, 1995)
many means as possible.
39. Customers are offered quick, tangible rewards for completing surveys or requests for (Hiebeler et al., 1998)
information.
40. We take customer feedback seriously and reply to them. (Whiteley, 1995)
41. Customer and employee feedback is taken using a variety of direct and indirect measures. (Daffy, 1999)
42. Customer feedback is used to create strategies conducive to positive customer perceptions. (Sin et al., 2005)
43. When my bank finds that customers would like to modify a product/service, the (Hiebeler et al., 1998)
departments involved make concerted efforts to do so.
44. Any changes or actions deemed necessary would be implemented to the benefits of our (Sin et al., 2005)
customers.
45. We broadcast to the employees the feedback given by our customers. (Sin et al., 2005)
46. We measure and monitor relationship performance and satisfaction for both the bank and (Parvatiyar and Sheth,
the customer to measure either party’s propensity to continue or terminate the relationship. 2001)
47. We respond to customer enquiries and requests in real-time. (Hiebeler et al., 1998)
48. Our systems are designed to make it easy for customers to do business with us. (Hiebeler et al., 1998)
49. Our systems are flexible enough to adapt to customers’ changing needs and wants. (Hiebeler et al., 1998)
50. Our business processes are simple, transparent and well defined. (Hiebeler et al., 1998)
51. Budgets are made on the basis of periodically evaluating the performance of customer (Sin et al., 2005)
metrics.
52. We analyze the causes of customer defection through exit interviews and lost customer (Hiebeler et al., 1998)
surveys with the aim to win back those customers who have strong profit potential.
53. We have a differential reward system that rewards customers based upon their profit (Uncles et al., 2003)
/revenue contribution.
54. Our reward system is designed to prevent downward migration of key customers and to (Coyles and Gokey,
encourage upward migration of potentially big customers. 2002)
55. We use the concept of ‘Relationship Pricing’ in pricing our different products/ services. (Cram, 1996)
56. We run After-Marketing programs to enhance customer experience and increase emotional (Vavra, 1992 as cited in
bonding. Parvatiyar and Sheth,
2001)
57. We do co-branding / affinity partnering programs to provide increased value to our (Parvatiyar and Sheth,
customers. 2001)
58. We leverage the power of word of mouth by using referral marketing programs. (Parvatiyar and Sheth,
2001)
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59. We strengthen the emotional bonds with our customers by wishing them on important (Das, 2004)
occasions.
60. We do cross selling of products / services to increase customer share. (Parvatiyar and Sheth,
2001)
61. We improve customer retention through targeted outreach to customers at risk of deserting (Cokins, 2002)
/ migrating.
62. My bank has the sales and marketing expertise and resources to succeed in CRM (Sin et al., 2005)
63. Our bank uses technology to automate marketing, sales and service functions. (Gosney and Boehm,
2001)
64. My bank believes that mining data intelligently is a source of competitive advantage. (Sin et al., 2005)
65. We continuously generate Relationship data (Customer Relationship Value data / (Parvatiyar and Sheth,
Customer loyalty data, etc), Product data (Product sales), and Feedback data. 2001)
66. IT facilitates the management of customer relationships. (Xu et al., 2002)
67. My bank shares customer information across all points of contact. (Sin et al., 2005)
68. Individual customer information is available at every point of contact. (Sin et al., 2005)
69. Knowledge is shared to leverage the value of customer information. (Stefanou et al., 2003)
70. Our Knowledge Management system provides customer insight, profiles, habits, contact (Sin et al., 2005)
preferences and understanding to improve contact with the customer.
71. We have mechanisms to encode new knowledge about our customers into formal rules or (Sin et al., 2005)
policies that can be shared between bank’s participants and bank’s subunits.
72. New knowledge acquired at various touch points of our bank is codified so that the new (Sin et al., 2005)
knowledge can be disseminated and shared easily amongst all staff.
73. My bank has sound mechanisms for effective knowledge dissemination. (Sin et al., 2005)
74. We have mechanisms that transform locally acquired new knowledge into bank-level (Sin et al., 2005)
knowledge.
75. My bank continuously maintains and monitors our customer information. (Sin et al., 2005)
76. Our information systems are designed to give comprehensive data about all aspects of our (Sin et al., 2005)
customers, so that we can be responsive to them.
77. Our databases are dynamic in nature and provide comprehensive real-time information (Sin et al., 2005)
about all our customers.
78. Our computer technology can help create customized offerings to our customers. (Sin et al., 2005)
79. Our CRM software provides for integration of touch points to obtain a single view of the (Parvatiyar and Sheth,
customer at every point of customer contact. 2001)
80. Our CRM software enables us to analyze customer feedback and improve customer (Hiebeler et al., 1998)
service.
81. Our CRM software enables us to analyze customer purchases and predict buying behavior. (Hiebeler et al., 1998)
82. Our technology enables us to route simpler calls or those from lower value customers to a (Cooper et al., 2005)
self-service system, reserving personal service for high value customers.
83. Our CRM hardware and software are scalable to meet the changing needs of the future. (Sin et al., 2005)
84. Our CRM software performs very well with regard to integration with other applications. (Sin et al., 2005)
85. We regularly monitor our CRM performance through Key Performance Indicators / (Seybold and Marshak,
Metrics. 2001)
86. My bank has the right hardware to serve our customers. (Sin et al., 2005)
87. My bank has the right software to serve our customers. (Sin et al., 2005)
88. My bank has the technical expertise and resources to succeed in CRM. (Sin et al., 2005)
89. My bank has the right technical personnel to provide technical support for the utilization of (Sin et al., 2005)
computer technology in building customer relationships.
90. We also know how much customers are willing and likely to spend for our products and (Hiebeler et al., 1998)
services.
91. We constantly track customer preferences across segments and how they change over time. (Hiebeler et al., 1998)
92. We try to educate our customers regarding proper use of our products and services. (Hiebeler et al., 1998)
93. My bank makes concerted and coordinated efforts across functions to satisfy our (Sin et al., 2005)
customers.
94. My bank commits time and resources in managing customer relationships. (Kale, 2004)
95. Customer-centric performance standards are established and monitored at all customer (Hiebeler et al., 1998)
touch points.
96. The technical/ operations people treat customers with great care. (Hiebeler et al., 1998)
97. My bank treats each key customer differently. (Cokins, 1992)
98. My bank makes an effort to find out what our key customer needs. (Cokins, 1992)
99. My bank provides customized services and products to our key customers. (Dyche´, J., 2002)
100. My bank exchanges information with our key customers frequently. (Hiebeler et al., 1998)
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101. My bank gives each key customer individual attention. (Hiebeler et al., 1998)
102. The service department gives key customers priority. (Hiebeler et al., 1998)
103. Through ongoing dialogue, we work with individual key customers to customize our (Hiebeler et al., 1998)
offerings.
104. My bank has processes to identify key customers.
105. My bank has clear objectives and strategies for key customers. (Sin et al., 2005)
106. Senior managers are tasked with ensuring that the bank is meeting key customers' needs. (Hiebeler et al., 1998)
107. We provide special privileges to our key customers. (Hiebeler et al., 1998)
108. My bank fully understands the needs of our key customers via knowledge learning. (Sin et al., 2005)
109. My bank involves our key customers in product design. (Hiebeler et al., 1998)
110. We strive to constantly surprise and delight our key customers. (Hiebeler et al., 1998)
111. My bank provides channels to enable ongoing, two-way communication with our key (Hiebeler et al., 1998)
customers and us.
112. Any new knowledge about key customers would be well received and used to provide (Sin et al., 2005)
better offerings to customers.
113. All employees in my bank understand and share the common goal of building and (Sin et al., 2005)
maintaining customer relationships.
114. CRM responsibilities of frontline employees clearly defined, assigned and understood. (Daffy, 1999)
115. Our employee training programs are designed to develop the skills required for acquiring (Daffy, 1999)
and deepening customer relationships.
116. My bank's employees are willing to help customers in a responsive manner. (Sin et al., 2005)
117. Customers can expect that my bank's employees are not too busy to respond to customer (Sin et al., 2005)
requests promptly.
118. We encourage employees to look at customers on the basis of lifetime values. (Daffy, 1999)
119. Our employees are aware of the drivers of Customer Lifetime Values (CLVs) and (Cokins, 2002)
constantly try to improve them.
120. All our customer contact points/ representatives are trained in customer care. (Sin et al., 2005)
121. Our employees at all levels are encouraged and empowered to exceed customer (Sin et al., 2005)
expectations.
122. Customer-centric functions are staffed with well-trained and motivated employees. (Sin et al., 2005)
123. We train and empower (both financially and in terms of additional authority) the front- (Daffy, 1999)
line employees to resolve most complaints during the first contact.
124. We continuously monitor the training programs to make them more effective (Sin et al., 2005)
125. Customers can expect prompt service from employees of my bank. (Sin et al., 2005)
126. Our front line employees are rewarded on the basis of customer satisfaction delivered (Daffy, 1999)
and/ or related metrics.
127. Our management and staff are open to change. (Sin et al., 2005)
128. My bank vigorously channels time and resources towards achieving loyalty. (Zineldin, 2006)
129. We monitor our service quality performance and constantly strive to improve the same. (Sin et al., 2005)
130. My bank customizes customer interactions to optimize value and loyalty. (Sin et al., 2005)
131. My bank treats all customer communications seriously and views them as important. (Sin et al., 2005)
132. Our communication strategy for customized marketing campaigns includes finding out (Cooper et al., 2005)
the preferred media and frequency of communication.
133. My bank manages all customer communications so that they are consistently superior and (Sin et al., 2005)
relevant to the customer.
134. Our marketing campaigns across touch points are consistent and customized to customer (Cooper et al., 2005)
needs.
135. Our communication with customers is consistent across all marketing, sales, and service (Sin et al., 2005)
channels.
136. Our marketing, sales, and service areas co-operatively determine integrated customer (Sin et al., 2005)
contact strategies that vary by individual.
137. Policies and procedures critical to managing customer relationships are well-documented (Sin et al., 2005)
and consistent across all customer touch points.
138. We deliver a consistent customer experience across all touch points / encounters. (Masceranhas et al.,
2006)
139. My bank has a process in place to obtain and validate customers' permission to interact (Godin, 1999)
with them through various channels.
140. We have a well-developed privacy policy to ensure confidentiality of data collected from (Sin et al., 2005)
customers.
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Appendix II
Final CRM best practices scale
Key customer focus
1. My bank provides customized services and products to our key customers.
2. We strive to constantly surprise and delight our key customers.
3. We strengthen the emotional bonds with our key customers by wishing them on important
occasions.
4. We use the concept of ‘Relationship Pricing’ in pricing our different products/ services.
5. We do Co-branding / Affinity partnering programs to provide increased value to our customers.
6. We leverage the power of word of mouth by using Referral Marketing programs.
7. We do cross selling of products / services to increase customer share.
CRM organization
1. Out top management accepts and provides leadership for building and maintaining customer
relationships as a major goal of the bank.
2. My bank commits time and resources in managing customer relationships.
3. Our systems are designed to make it easy for customers to do business with us.
4. We provide increased customer convenience using a variety of distribution channels.
5. We deliver a consistent customer experience across all customer touch points / encounters.
6. Customer-centric performance standards are established and monitored at all customer touch
points.
7. CRM responsibilities of frontline employees clearly defined, assigned and understood.
8. Our employee training programs are designed to develop the skills required for acquiring and
deepening customer relationships.
9. Our frontline employees are encouraged and empowered to exceed customer expectations.
Knowledge management
1. We take customer feedback seriously and reply to them.
2. We have effective customer recovery strategies including guarantees for service failures.
3. Customer and employee feedback is taken using a variety of direct and indirect measures.
4. We broadcast to the employees the feedback given by our customers.
5. We use information from customers to design or improve our products or services.
6. We analyze the causes of customer defection through exit interviews and lost customer surveys
with the aim to win back customers who have strong profit potential.
7. We do customer segmentation using Customer Lifetime Value (CLV)/ related metrics.
8. My bank has a process in place to obtain and validate customers’ permission to interact with
them through various channels.
9. We have a well-developed privacy policy to ensure confidentiality of data collected from
customers.
10. We have a differential reward system that rewards customers based upon their profit / revenue
contribution.
Technology-based CRM
1. Our bank uses technology to automate marketing, sales, and service functions.
2. Our information systems are designed to give comprehensive data about all aspects of our
customers, so that we can be responsive to them.
3. Our CRM software provides for integration of touch points to obtain a single view of the
customer at every point of customer contact.
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Appendix III
Abbreviations
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