(1) INTRODUCTION OF CRM :-

When we look around us we see that the hand of business touches us in every walk
of life. We were faced with products and services at every single turn. How many of those
Products and services providers actually known the person who them?
MAJOR CORPORATIONS FAIL TO REALIZE THAT IT IS THE CUSTOMER
WHO IS THEIR BIGGEST ALLY :-
Their employees prefer to treat them at times with indifference, at times with
arrogance and sometimes even with anger. The customer is in reality the king, the
one who makes the difference between a companys success or failure and yet from
the corporate gaint to the small entrepreneur struggling to keep his business alive,
they are all prone to making the same mistake at some point of time.
What is this grave mistake, so often overlooked yet so profound in its impact,
making the difference between the success and failure of million dollar
enterprises ? The answer lies in a companies attitude towards its customers. This
approach is by far the most vital in any organization.
KNOW OUR BIGGEST ASSETS :-
Several million dollars are lost yearly as corporations scramble to make profits,
beat competitors, and stay ahead in the rat race. Huge amounts of money are spent
on marketing, endeavoring to gain customers, often in vain. What is it that the
lucky few or shall we say successful few organization have, that actually give
them that edge over the others ? Why is it that organizations very often find their
best customers drawn to competitors ?
Most organization have an extremely faulty customer centred system being
adopted.
They are not open to customer suggestions and more often than not they do
not provide the customer with proper avenue to vent his ideas.
This often leads to unhappy customers and eventually their loss.
(2) HISTORY :-
Customer Relationship Management originated years before the start of the first
millennium in Mesopotamia. Farmers who were eager to sell their surplus produce
became the first initiators of the customer oriented processes we are now familiar
with. With the passage of time and the first millennium an accurate record of
transactions was kept by the merchant accounting for what sold and whom it was
sold to. This list of customers provided the first comprehensive customer oriented
data and proved to be the beginning of customer oriented strategies. The advent of
the 1990s however saw a more refined customer oriented implementation taking
place, laying the ground for the CRM strategy as we now know it.
TESCOS ACHIEVEMENTS :-
Tesco was instrumental in bringing this about. Dunnhumms collaboration with it
due to the influence of Edwina Dunn and Clive proved to be the foundation for
CRM. Since these two individuals had realized the importance of knowing and
understanding their customers, they understood the supreme need for adopting the
right customer approach.
Tesco the second largest grocer in the U.K. collaborated with Dunnhumm and
implemented a customer loyalty program used in 12 of their stores. Known as the
Tesco Club Card Program it focused entirely on the customer and implemented the
necessary business activity changes with the customer in view. While doing this it
assisted in the collation of the information about customer preferences and the net
result was amazing.
Watching competitors realized that this was but right approach to adopt and that it
generated huge funds. They realized that customer retention and customer loyalty
were but a natural by-product.
CRMs Launch :-
Realization that this approach was the right one and its subsequent implementation
by Tesco was CRMs launch in the world wide market. From then on it was smooth
sailing for CRM. Hailed as the customer strategy of the decade CRM was the new
option for organization.
The history of CRM states that initially CRM focused less on big industries and far
more on small and medium industries. Since the revenue from large corporates was
higher it was felt that these industries should be the focal point. With the passing of
time this notion changed and the importance of focusing on medium and small
industries was noted.
The history of CRM has yet another page added to it as CRM in the new
millennium becomes a necessary tool for almost all industries aspiring to make
their customers their focal point of success.
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(3) DEFINITION :-
Customer Relationship Management (CRM) is an information industry term for
methodologies, software, and usually Internet capabilities that help an enterprise manage
customer relationships in an organized and efficient manner. In many cases, an enterprise
builds a database about its customers. This database describes relationships in sufficient
detail so that management, salespeople, and customer service reps can access information;
match customer needs with product plans and offerings; remind customers of service
requirements; know what other products a customer had purchased; etc.
There are three parts of application architecture of CRM.
a. Operational CRM. Operational CRM means supporting the so-called "front office"
business processes, which include customer contact (sales, marketing and service).
Tasks resulting from these processes are forwarded to employees responsible for
them, as well as the information necessary for carrying out the tasks and interfaces
to back-end applications are being provided and activities with customers are being
documented for further reference.
b. Analytical CRM. In analytical CRM, data gathered within operational CRM are
analyzed to segment customers or to identify cross- and up-selling potential. Data
collection and analysis is viewed as a continuing and iterative process. Ideally,
business decisions are refined over time, based on feedback from earlier analysis
and decisions. Business Intelligence offers some more functionality as separate
application software.
3. Collaborative CRM. Collaborative CRM facilitates interactions with customers
through all channels (personal, letter, fax, phone, web, e-mail) and supports co-
ordination of employee teams and channels. It is a solution that brings people,
processes and data together so companies can better serve and retain their
customers. The data/activities can be structured, unstructured, conversational, and/or
transactional in nature.
Collaborative CRM provides the following benefits:
Enables efficient productive customer interactions across all communications
channels.
Enables web collaboration to reduce customer service costs.
Integrates call centers enabling multi-channel personal customer interaction.
Integrates view of the customer while interaction at the transaction level.
(4) IMPORTANCE OF CRM :-
 CRM (Customer Relationship Management) software aids in increasing efficiency,
serves to aid the sales department in all of its efforts, manages to boost sales, and
fundamentally contributes to the overall development of the company. It also
manages to work towards organizational goals. This is achieved through a concise
study of potential customers.
Their preferences are taken into consideration and used to coordinate and
implement a customer centric business strategy that focuses primarily on the
customer, yields to recording the importance of his ideas and suggestions and
results in increased customer retention.
CRM solution helps to reduce the time required for sales cycles while
hanging onto potential sales leads.
Customer relation is also maximized.
Sales orders and sales revenues increase as a mater of increased
organization.
Growth.
CRM facilitates growth in that it aids the reduction of costs and increased
availability of information to the organization that can be used according to
customer information requirements.
This information is increasingly important to an organization and can prove
to make the difference between success and failure.
CRM helps in integrating all the essential information available in the Organization
itself and from outside resources and serves to assimilate Information about
SALES, MARKET TRENDS, EMPLOYEES, CUSTOMER ATTITUDE,
CUSTOMER RETENTION etc. CRM raises the market share by keeping a keen
eye on the various market segments and adopting strategies accordingly.
NEED FOR CRM :-
Nowadays in a tough competition in the market, many organization are
realizing that in the even increasing competition in the marketplace
customers are much more informed and demanding than even before.
So basic approach of dealing with customers is changing, not only in the
marketing and sales function of the business organization but across the
board covering all the functional areas like manufacturing, materials,
research and development.
 Business organizations are realizing that the cost of regaining a lost
customer is substantially higher than the cost of gaining a new customer.
In this situation organization have to make specific concentrated efforts to
manage the relationship with product and services that meet and exceed
their expectations.
For this, MIS has a very important role. First, MIS can help in managing
relationship with the existing and future customers properly. Secondly, it
can help in ensuring that appropriate products and services are make
available to customers at the right time and place which would exceed the
customers expectation.
The main reason for the interest in CRM as a new concept is the impact of
Information Revolution. The impact of Information Revolution is being
felt in different walks of life.
(5) CONCEPT OF CRM :-
Understanding and meeting the customers requirements is the basic purpose for
which the organization exists.
CRM AS AN ENTERPRISE SOLUTION:-
CRM can be considered as an enterprise solution and not only the software
that meets the functional requirements of sales and marketing.
It has to be integrated with the organization wide ERP or similar systems
and procedures that cut across the functional boundaries within the
organization.
This allows the organization to become more customer focused.
CRM is expected to have tight integration with information systems that
deal with customer order processing, order processing, financial
accounting, production planning and scheduling, procurement, materials,
delivery and logistics.
(6) MISCONCEPTION OF CRM:-
CRM is basically information technology solution & its implementation can
be done only by the Information Systems Department.
Automating the customer may bring in quick response and efficient ways of
working. So, information technology driven initiatives in one form or the other for
CRM, the basic business still remains dealing with customers.
 Understanding & meeting the customers expectations remains as a basic premise.
Marketing & Sales team members who are constantly dealing with the customers
are in a better position to understand customer expectations. So, there is a need to
be taking the lead in implementing the CRM solution.
CRM solutions started providing expected business benefits when the marketing &
sales took the divers seat in CRM implementation & Information systems took
the enabler role.
(7) CHANGES IN ORGANIZATIONAL STRUCTURES AS A RESULT OF
CRM :-
In todays dynamic & competitive marketplace, customers are not
concerned about how the organization is structured and how many depts.
The organization has, or how the order is going to traverse through the
internal process before the order is fulfilled accurately & on time.
They just think on time & quality of response, and not the method by which
response was generated.
Customers are not willing (ready) to pay for the non-value adding
activities performed in the organization as a part of bureaucracy (official
work).
CRM aims at enhancing customer acquisition and retention (kabjo)
increasing the revenue and customer loyalty.
So, business organization have to reoriented the structure of the
organizational structure, to ensure that the company is customer focused
and adaptive to meet the customers requirements and initiate proactive
actions to acquire & retain customers.
Company needs to have complete understanding of the customers in a
better manner compared to other competitions.
It should have the ability to gather and analyze valuable information about
customers through business transactions with customers, which pass
through MIS in order to build long-term relationship.
CHANGES OF CRM IN MARKETING SETUP OF CRM :-
In organization, it is common to find that different people in the
organization deal with the same customers. For ex: A sale person would be
visiting payment. Someone from the service dept. would attend the
customers call reporting a performance problem etc..
 It is possible that the customer would be annoyed (gusse thavu) when
someone says that the customers problem was the responsibility of
someone else in some other department.
The customers expect quick & efficient response.
At times there is a communication gap among the marketing and sales
setup or with other functional areas of organization.
So when a customer calls for some information, someone has to need help
from the other dept to get the right information.
Also it is possible that information about the customers and promises made
by the field salesperson during the last call is not easily available to the
person who is visiting the customer next time. This can cause the effort
duplication, wastage of time and energy, delay in response and also give the
customer in impression of not being an important customer.
So when appropriate CRM is implemented, there is a change in this
situation.
Because, CRM uses a common information repository.
Information about the customers is stored at a common location &
everyone can access this information instantly.
Also, it is possible to assign single point of contact responsibility to
individuals to deal with the specific customers.
It is possible for the marketing setup to adopt concepts like Major
Customer Management initiatives where in all information about a major
customer is available easily.
This setup is in a position to respond to quickly to all customer queries &
calls.
Effort duplication is reduced & minimized to a great extent.
With appropriate integration with other information systems in the
organization, information updates are automated and the need for searching
is eliminated.
(8) USEFUL FOR ALL THE ORGANIZATION:-
It is not true that CRM is only useful for the large organization CRM
solutions are also available for small and medium enterprise (SME) sector
companies.
 Whether the organization is large or SME, the basic concepts of CRM
remains the same. It is not matter whether the functioning of CRM is
addressed through implementation of a readymade solution or through a
simple system is a matter of business decision about investment in IT.
The CRM concepts meeting industry specific requirements can also be
implemented with the help of component or a subsystem of CRM. For ex:
Customer portal on the web.
CRM is a concept. It can be adopted by organization of any size and
representing any industry vertical.
(9) BENEFITS OF USING A CRM SOLUTION:-
Sales force productivity improvement
Better conversion ratio / Hit ratio between inquiries to deals
Reduction in sales cycle time
Quick & Accurate Order Registration
Online availability of order status for the customers
Faster response to customer queries
Better call distribution & follow up
Improved Customer Service Levels
Improved Customer Satisfaction Index levels
Better retention and greater customer loyalty
SALES FORCE PRODUCTIVITY IMPROVEMENT:-
Productivity improvement means more output with the same input or same
output with reduced input.
The sales force is in a position to cater to more number of customers
effectively and efficiently.
BETTER CONVERSION RATIO / HIT RATIO BETWEEN INQUIRIES TO
DEALS:-
Information about prospects & quotations is instantly available, it is
possible to maintain proper follow up & coordinate the sales efforts.
It directly or indirectly improves the number of inquiries being converted
into sales.
Means it helps in improving the conversion ration (number of inquiries to
number of orders).
REDUCTION IN SALES CYCLE TIME:-
 Quick availability of information helps in reducing cycle times at different
stages of the overall sales cycle.
Means deals can be closed faster as the waiting period for fetching
required information is reduced.
QUICK & ACCURATE ORDER REGISTRATION:-
CRM module deal with the customer order registration can be configured to
contain appropriate checks & controls without compromising on response
time; customer orders can be registered faster & in accurate manner.
ONLINE AVAILABILITY OF ORDER STATUS FOR THE CUSTOMERS:-
Customers can get the accurate status about their orders without waiting &
without manual intervention (involvement).
For ex: transport companies allow their customers to track their
consignments by entering the waybill number at the customer portal.
FASTER RESPONSE TO CUSTOMER QUERIES:-
CRM can be configured to set alarms & reminders. Using this functionality,
a sales person can set a reminder to call up a prospect after a given number
of days.
The CRM permits the sales person to use the reminder functionality to
ensure that follow up call made after the particular day.
Using call distribution functionality, service calls coming from customers
in specific geographical area can be forwarded to the service person that is
nearest and can move quickly to attend the call.
IMPROVED CUSTOMER SERVICE LEVELS:-
It is possible to improve customer service levels by understanding the
customer service levels in a better manner.
For ex: An automobile dealer who has sold a car can know when the first
and second mandatory service would be due & proactively remind
customers about the servicing their car.
Service facility can improve customer service as well as their capacity
utilization by avoiding the peak loads.
IMPROVED CUSTOMER SATISFACTION INDEX LEVELS:-
It ensures that the expectations of the customers are met & even exceed to
improve in the customer satisfaction index.
BETTER RETENTION & GREATER CUSTOMER LOYALTY:-
 When customers are satisfied & delighted (happy) there is a better
chances of retaining (holding) such customers.
Also there is a chance for creating loyal customers where individual
customers feel that they are getting special treatment.
(10) IMPLEMENTATION OF CRM:-
It is not necessary that, after implementation of CRM solution, it assures
effective sales or increase in a market share.
Also it cannot assure improvement in profitability of the enterprise unless
all the customer facing business processes of the organization are well
aligned from the customers viewpoint instead of focusing on product
alignment or functional departments.
The implementation of the CRM software has to be accomplished by the
approach of how to make it more convenient for the customers to buy the
product.
Implementing CRM solutions is to be considered as an activity pertaining
to achievement of strategic goals and needs to be given appropriate
importance.
Pre-requisites in order to ensure successful implementation of CRM.
1. Clear understanding of the customers, their expectations, needs &
requirements, likes & dislikes.
2. Clear understanding of the companys competencies (capability)
and capabilities to deliver and the commitment to quality of its
service.
3. Selection of appropriate IT tools with investment requirements that
can be justified either through return on investment method or
through cost benefit analysis.
4. Selecting the right people to implement CRM solution who have a
broad vision of market environment & customer interactions instead
of myopic (narrow-minded) IT view.
PITFALLS IN CRM:-
There are a few pitfalls to CRM as described below:
TECHNOLOGY PITFALL:-
 CRM is considered as an IT solution. It is a readymade CRM suite is
acquired (obtained) at a price without looking at hidden costs associated
with customizing & implementing.
But in reality it is not a pure IT solution. But all customer-facing processes
need to be reviewed, and whichever IT solution is providing the most
accurate solution is to be identified.
It should be given the least priority when it comes to CRM implementation.
The first priority must be the customer and their expectations.
Meeting & exceeding customer expectations should be given the maximum
priority.
When the expectations are understood & the entire organization is
transformed into a customer centric purpose, then IT will play its enabling
role.
IT WORKS FOR OTHER COMPANIES:-
It is not possible that the CRM suite, which was implemented successfully
in other organization, can also work in your organization.
Because every organization is different and CRM requirements would be
organization specific.
Functional manager should guide selection of CRM tools, not by IT
professionals.
Because he would be in a better position to map the organization specific
requirements into a CRM suite. So estimation would be proper.
Though this may involve additional cost & time, the CRM evaluations
would be better & possibilities of failure would be reduced.
TOP MANAGEMENT COMMITMENT:-
CRM is not only delegated with the IT team & third party partners.
The top management must show the commitment by way of sparing time to
participate in strategy formulation, business process mapping and periodic
review throughout CRM implementation.
Because presence of top management during review meetings ensures that
conflicts are resolved quickly & the required resources are made available
for ensuring the success of the project.
(11) CRM PROCESS WORKS:-
 The CRM process is the most influential customer oriented strategy of the decade.
Despite its humble origins it has evolved into a relatively complex strategy. The
essentials of a CRM program include focus, commitment to CRM goals and above
all a desire to be customer focused. Heres how the CRM process actually works in
an organization.
A LOOK AT THE STEPS IN THE CRM PROCESS:-

Establishing CRM Goals

Educating other Departments

Assembling Customer Information

Designing the Data Model

Vendor Study

Selecting the CRM Solution

Establishing Authority & Responsibility

Pilot Projects

Communication with Customers through direct mail, electronic

Mail etc.

Customer Surveys
(12) THE CRM FASTEST SELLING STRATEGIES OF THE DECADE:-
NEW CUSTOMER APPROACH:-
Look closely and you will find that the organizations that succeed are the
organizations that have adopted the right approach towards their
customers-CRM (Customer Relationship Management).
A decade ago the traditional modes of marketing were in vogue but the last
few years have evidenced a tremendous change in this approach.
The new trend now gaining ground is slowly causing corporate heads to
turn in the direction of customer focus. They are beginning to realize that
this methodology is essential. After all, good customer relationships are at
the heart of business success.
This newly developed business strategy generally takes around 15 months
for its implementation.
 Customer Relationship Management serves to:

Increases the efficiency in a call centre

Streamlines sales

Assists remarkably in reducing costs and aiding marketing

Improves cross selling and hangs on to sales leads

Increase the market share

Endeavors to upgrade the entire marketing process

Contributes to overall organization efficiency and profitability

BOOST OUR ORGANIZATION CAPACITIES:-
The sales department makes use of the stored customer data, to assimilate and
use in sales dealings. This comprehensive data collected proves to be useful
in holding on to sales leads. CRM also boasts of doubling a companys
profits in a 5/6 year period and manages to achieve this with its customer
centric strategies. Customer loyalty and customer retention go a long way
in boosting profits as is evidenced by CRM.
Customer Relationship Management is not a technical term. CRM can be
thought of more in terms of being a process one that serves the collation
of data from within and outside the organization and serves to assimilate
and use this data in customer centered strategies.
(13) A LOOK AT THE INDUSTRIES THAT CAN ADOPT CRM :-
CRM costs approximately $500 - $750 per year for small/medium business. With
prices as low as this the earlier notion that that CRM is but only an option for large
corporates does not hold good. CRMs application includes a wide range of
industries ranging from retail to education to the health sector and areas as offbeat
as relationship marketing and knowledge management.
LIST OF INDUSTRIES THAT CAN OPT FOR CRM :-
Pharmaceuticals & Life Science:-
The Pharmaceuticals & Life Science sector is unlike any other. It requires large
amounts of data and information processing. CRM provides for this demand with
its ability to store volumes of customer data.
Financial Services :-
The Financial Services marketplace is rapidly expanding. Investment banking,
private equity and other financial institutions are trying to manage client
relationships while developing overall sales. CRM achieves this with its ability to
cut costs, increase efficiency and manage customers while retaining relationships
with them.
Health care :-
Customer Relationship Management helps hundreds of health care clients achieve
their marketing goals. CRM predicts future medical needs in the industry. It helps
greater return on investment for hospitals, employers, physicians etc.
Manufacturing :-
Normally we tend to think of large machinery, factories etc when we think of
manufacturing but this industry as well needs CRM to maximize profits. CRM
enables them to sell to customers both directly and indirectly.
Real Estate :-
Agents and property professionals face major problems with clients. With
increasing competition the real estate industry is more challenging than ever
before. CRM helps marketing, sales and service operations and helps the
organization understand and manage its clients effectively.
Retail :-
The industry is symbolic of and closer to the customer than any other industry.
CRMs knowledge of the customer, its comprehensive study of customer
preferences helps boost profits, sales and customer retention.
Travel :-
CRM enables airlines and travels minimize time and cost as it contains a
comprehensive amount of data on customers that can be used in daily dealings with
them. Implementing CRM software helps to build, manage and serve your client
base.
Banking :-
CRM enables the banking industry to maintain a customer profile. This creates a
holistic view of customers. It makes sure that the right services are offered to the
right people at the right time.
Automotive CRM :-
Automotive meets the sales, marketing and service requirements of car companies,
distributors, dealers etc. Implementing CRM enables them to use available
 customer information to manage leads, to develop marketing campaigns and
increase sales directly or through dealers.
Insurance :-
CRM is essential to enable organization offer their customer the chance to review
policy coverage information, check policy / claim status etc. It also helps in solving
customer problems.
CRMs New Areas of Expertise :-

Enterprise CRM

Relationship Marketing

Vertical CRM Solutions

Business Intelligence

e-Business

Content Management

Customer Analytics

Data Mining

Email Marketing

Employee Relationship Management

Enterprise Resource Planning

Knowledge Management

Partner Relationship Management

Sales Automation

Enterprise Resource Planning

Large corporate, medium industries and small business units as well can all opt to
benefit from this application. CRMs application being diverse in nature has made
it one of the fastest growing customer centric strategies of the decade. Its diverse
applicability has increased its appeal.
(14) CRM IN BANKING INDUSTRY:-
Consumers largely selected their banks based on how convenient the location of
banks branches was to their homes or offices. With the advent of new technologies
in the business of bank, such as internet banking and ATMs, now customers can
freely chose any bank for their transaction. The pressures of competitive and
dynamic have contributed to the growth of CRM in the Financial Services Sector.
5% increase in customer retention can increase profitability by 35% in banking
business, 50% in insurance and brokerage, and 125% in the consumer credit card
market. Therefore, banks are now stressing on retaining customers and increasing
market share. Private Banks have traditionally viewed themselves as exceedingly
Customer Centric offering what they believe to be highly personalized services
to the High New Worth Customers. The wealthier the customers, the more
demanding they are and the clients expect more and more from their banks, to
understand what their wants and needs are, so that the organization can be built
around serving those needs. The structured approach to CRM provides various
benefits to the bank, viz., a distinctive and consistent customer experience, clear
identification of the organizational, technological and process-related capabilities
and prioritization of these capabilities. The structure and hierarchy of the customer
experiences are discussed in the paper.
INTRODUCTION :-
Traditionally, few people changed their banks unless serious problems occurred. In
the past there was, to certain extent, a committed, often inherited relationship
between a customer and his/her bank. The philosophy, culture and organization of
financial institutions were grounded in this assumption and reflected in their
marketing policies, which were product and transaction-oriented, reactionary,
focused on discrete rather than continuous activities.
Today, financial institutions can no longer rely on these committed relationships or
established marketing techniques to attract and retain customers. As markets break
down into heterogeneous segments, a more precisely targeted marketing technique
is required, which creates a dialogue with smaller groups of customers and
identifies individual needs.
Also, before the internet revolution, consumers largely selected their banks based
on how convenient the location of banks branches was to their homes or offices.
With the advent of new technologies in the business of bank, such as internet
banking and ATMs, now customers can freely chose any bank for their
transactions. Thus, the customer base of banks has increased, and so has the
choices of customers for selecting the banks.
This situation coupled with the pressures of competitive and dynamic markets has
contributed to the growth of CRM in the Financial Services Sector.
CUSTOMER RELATIONSHIP MANAGEMENT: THE CONCEPT :-
Customer Relationship Management is the establishment, development,
maintenance and optimization of long-term mutually valuable relationships
between consumers and the organizations. Successful customer relationship
management focuses on understanding the needs and desires of the customers and
is achieved by placing these needs at the heart of the business by integrating them
with the organizations strategy, people, technology and business processes.
At the heart of a perfect CRM strategy is the creation of mutual value for all the
parties involved in the business process. It is about creating a sustainable
competitive advantage by being the best at understanding, communicating, and
delivering, and developing existing customer relationships in addition to creating
and keeping new customers. So the concept of product life cycle is giving way to
the concept of customer life cycle focusing on the development of products and
services that anticipate the future need of the existing customers and creating
additional services that extend existing customer relationships beyond transactions.
NEED OF CRM IN THE BANKING INDUSTRY :-
A Relationship-based Marketing approach has the following benefits :-
Over time, retail bank customers tend to increase their holding of the other
products from across the range of financial products / service available.
Long-term customers are more likely to become a referral source.
The longer a relationship continues, the better a bank can understand the
customer and his/her needs and preferences, and so greater the opportunity
to tailor products and services and cross-sell the product/service range.
Customers in long-term relationships are more comfortable with the service,
the organization, methods and procedures. This helps reduce operating cost
and costs arising out of customer error.
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.
According to a research by Reichheld and Sasser in the Harvard Business Review,
5% increase in customer retention can increase profitability by 35% in banking
business, 50% in insurance and brokerage, and 125% in the customer credit card
market. Therefore, banks are now stressing on retaining customers and increasing
market share.
PRIVATE BANKING AND CRM :-
Private Banks have traditionally viewed themselves as exceedingly Customer
Centric offering what they believe to be highly personalized services to the High
Net Worth Customers. However, changes in the customer behavior and
accumulation of wealth are resulting in the needs of HNW customers becoming
more diverse and complex in terms of the sorts of products they want, the channels
through which they want to access them and the associated range of advice.
The wealthier the customers, the more demanding they are and the clients expect
more and more from their banks. Competition for Supremely elite is increasing.
CUSTOMER EXPERIENCES :-
The first step towards successfully winning, retaining and growing the profitability
of private banking customers is to understand what their wants and needs are, so
that the organization can be built around serving those needs. Only when an
organization has done this and incorporated this into its strategy can it start to
design its value proposition and a customer experience that will enable it to
achieve a differentiated competitive position in the private banking market, and
more importantly, do so in an economically viable way.
The Basic Customer Experience

Advice and Expertise

Give me independent advice specific to my needs

High Quality Service: Personal Relationship:

Provide Consistent, High Provide me with a single
Quality, error-free service HNW adviser to Manage my
Customers affairs

Performance:
-Provide me with the best possible returns on my assets
The Basic HNW Customer Experience: Rohita Perera & Tamsin Brew CRM in
F.S.
There is a basic generic customer experience that many private banking
customers are seeking. To be a credible player in the market, a private bank must
be able to deliver this base experience. This represents a common set of needs
that are shared by most HNW customers. Therefore, the private bank must have the
capabilities required to meet these needs for the majority of its customer base.
All customers, regarding of wealth levels, have similar emotional needs, which
drive their need for advice and their purchase of products. Different wealth levels
impose different priorities on meeting these needs and open up new avenues for
doing so.
Take a simple example, HNW customers can afford on it to fund their retirement,
so their priorities may be associated with growing wealth, rather than preserving it,
allowing them to choose a product option with a higher risk / reward ratio.
If this is true, it means all HNW customers start with a basic, common set of what
they want and need from a bank, which might include :-
Personal, long-term relationship
Advice combining industry expertise and knowledge of personal circumstances
High quality, consistent quality
Security, privacy, confidential
At this basic level, grouping together these core wants and needs produces a set of
generic characteristics that an HNW individual seeks from an organization before
he or she will even consider placing any of his or her wealth with it.
Underlying these generic characteristics is a set of capabilities covering
organization, process and technology, which the private bank must process to
operate in the high net worth market.
The Segment Specific Experience
To build this base experience, private banks also need to consider the segment-
specific needs of their target customers. This in itself requires a capability to
identify and justify target customers and understand their needs beyond banking, to
ensure that their emotional needs are met. It is here that the customer is made to
feel like an individual, but it is also at this point that costs and infrastructure spiral,
as customers needs start to diverge.
Flexibility: - Advice and Expertise:
Cope with my Give me independent advice
unconventional specific to my needs
Lifestyle, and my Expertise in dealing with
fluctuating needs people in my situation

High Quality Personal Relationship:-

Service:- Provide me with a single
-Provide Consistent, adviser to Manage my
High Quality, error- affairs
free service HNW -An adviser who can
-No matter where I am Customers work with my other
Or how I choose to adviser
deal with theBank

Performance: Discretion
- Provide me with the best possible -Treat my affairs with
returns on my assets the utmost discretion
- Performance that will help my -Respecting my need
irregular income for privacy at all time
The Segment Specific Customer Experience : Rohita Perera & Tamsin Brew CRM
in F.S.
The Segmentation process identifies groups of customers with similar wants and
needs, who are seeking a similar experience from the provider. Importantly, from
the organizations viewpoint, this means that they can also be served by similar sets
of capabilities.
The experience at this level is made up of:-
The channel preferences of each segment and associated channel
experience for example, a self-directed group of customers will use
internet for transacting, information gathering and even some advice,
whereas advice seekers and less financially sophisticated segments require
more access to an adviser / relationship manager and a more basic
experience over the Internet.
The product and service preferences of that segment for example, the
more sophisticated customers are more likely to demand more complex
products such as alternative investments, whilst others may prefer
discretionary portfolio management.
The new components are added to the experience and the base experiences
elements become defined in more depth, according to the specific needs of the
customer segment.
Once the segment experiences have been defined, the associated capabilities must
again be identified. The hierarchical approach to defining customer experiences
helps filter these capabilities as:-
It is possible to identify experience elements that are common to more than
one segment this will carry a higher priority for development as they will
benefit more customers;
the segmentation exercise will provide comparative sizing for the target
segments.
Capabilities required for the larger, more profitable segments take precedence over
those needed for smaller segments.
The Organization-Specific Experience.
Having identified the base and segment specific elements of HNW customer
experience, the final step is to identify how the experience that each organization
offers its customers is district from other banks. Now this would mean that one has
to distinctly identify the components of the experience that are not only associated
with a particular bank but also be the key differentiator.
This process will define:-
Elements of the organization style and culture
Products and Services to be provided
In the same way, every brand is different, so is the experience.
Flexibility: - Advice and Expertise: Brand
Cope with my Give me independent Modern Innovative
unconventional advice specific to my image that fits with my
Lifestyle, and my needs own image
fluctuating needs Expertise in dealing with
people in my situation

High Quality Personal Relationship:-

Service:- Provide me with a single
-Provide Consistent, adviser to Manage my
High Quality, error- affairs
free service HNW -An adviser who can
-No matter where I am Customers work with my other
Or how I choose to adviser
deal with theBank

Global Performance: Discretion

-Access anywhere in - Provide me with the best -Treat my affairs with
the world possible returns on my the utmost discretion
-Physical Presence in assets -Respecting my need
the countries I visit - Performance that will for privacy at all time
help my irregular income
The Segment Specific Customer Experience : Rohita Perera & Tamsin Brew
CRM in F.S.
CONCLUSION :-
Banking can be mysterious for consumers and how they interact with their finances
can be a complex matter. The challenges faced by banks and their customers are
many but the trick lies in de-mystifying complex financial relationships.
Technical solutions deployed by banks today are flexible, user-friendly and meant
to facilitate specific workflow and requirements in implementation processes. In
order to simplify lives, banks have begun to implement end-to-end technologies
through all departments with the intention of removing human error from
processes. Previously existing manual environments could not have been adequate
for future visions, growth plans and strategies.
In this day and age, customers enjoy complete luxury in terms of customized
technical solution and banks use the same to cement long-term, mutually-beneficial
relationships.