On
“EFFECTIVENESS OF CUSTOMER RELATIONSHIP MANAGEMENT PROGRAMME IN STATE BANK OF INDIA”
Submitted In The Partial Fulfillment Of Degree Of MBA Batch 2006-08
SUBMITTED TO: Mrs. Riya Sharma (Project Guide)
SUBMITTED BY:Rishi Gupta Roll no. 0471483906
MAHARAJA AGRASEN INSTITUE OF TECHNOLOGY PSP AREA, SECTOR-22 ROHINI, DELHI—110085 Ph: 25489493-
WHOM SO EVER IT MAY CONCERN
This is to certify that the project on “EFFECTIVENES EFFECTIVENESS S OF CUSTOMER CUSTOMER RELATIONSHIP MANAGEMENT PROGRAMME IN STATE BANK OF INDIA ” carried out by Rishi by Rishi Gupta S/o Sh. Manmohan Lal, under my guidance is an originall researc origina research h work and has not been published published or conducted before. It is based on primary data and due care has been taken to ensure that all the source sou rces s of se secon conda dary ry da data ta an and d ref refere erenc nces es,, eit eithe herr fro from m pu publ blish ished ed or unpublished literature or from internet have been duly acknowledged.
Lect ………………… (Faculty Maharaja Agrasen Institute of technology )
ACKNOWLEDGEMENT I off offer er my sin sincer cerest est tha thanks nks and exp expres resss my dee deep p gra gratit titude ude to Mrs Mrs.Ri .Riya ya Sharma, my project guide for her immense help and guidance. I would also like to take this opportunity to thank Dr. N.K. Kakkar and all the other staff of institute for their continuous help in providing detailed information & guidance whenever needed, in project. Last but not least; I would like to thank all my friends for their continuous help whenever I was needed in project.
Rishi Gupta Roll no 0471483906
Contents 1. Executive Summary 2. Objective of study 3. Research Methodology 4. Introduction to CRM 5. Data presentation, analysis and interpretation 6. Findings 7. SWOT analysis 8. Conclusion 9. Recommendations 10.Limitations 11.Bibliography 12.Appendix
CHAPTER-1
EXECUTIVE
SUMMARY
This project is to know about the effectiveness of customer relationship management in STATE BANK OF INDIA. Today Consumers largely selected their banks based on how convenient the location of bank's 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. The pressures of competitive and dynamic markets have contributed to the growth of CUSTOMER RELATIONSHIP MANAGEMENT (CRM) in the Financial Services Sector. Here I have done survey in Delhi to know how today largest bank of India is catering the different need of the customers. Banks have abandoned traditional method of serving the customers. They are using newly method of fulfilling the need of the customers. They are giving emphasizes on maintaining the customer relation as product of all the banks are the same and in order to differentiate from others, they are targeting the customer by fulfilling their individual needs. These branches are providing every type of the facility to its customers like accounts, loans, mutual funds, insurance etc… This project is based on the data collected by the personal interview, questionnaire method and other secondary sources, mostly and covered customer of all age group and I have covered 100 respondents, who have their accounts in banks which include students, businessmen and employees. From analysis of this project I have concluded that most of the customers are satisfied from the dealings, products, services, and the facilities provided by the bank. And the SBI Bank is holding a strong customer base in DEHLI city despite of the presence of other so many private and public banks.
The bank is providing all the competitive products and services to the customers suit to their particular requirements. It has different types of Saving accounts, Current accounts, Loans, and Investment proposals etc., which are highly technical products to compete with other banks. People who are using the services of other banks are generally attracted with the highly efficient staff and services like InstaAlert etc. Majority of the people prefer to open their accounts in SBI Bank because of their wide network and
tie up with other bank’s branches and companies. Though it is in the mind of the people that public sector banks don’t give the best service but my project result is totally opposite to this. The survey shows that 88% customers are fully satisfied with the bank’s performance and their dealings. But the other side that come into light while this study is that some customers are also not satisfied with the dealings of the bank because of some reasons and Bank has to take corrective measures.
CHAPTER-2
Objective Of The Study & Scope
As we know that the customer is regarded as The King. Customers are the lifelines of the business. No business can be done without them. But in the competitive market, you can get the customer but the more difficult is to retain the customers, and this can only de done if we satisfy customers from head to toe. If we will not satisfy the customers then they will leave our organization and join other. Today if the organization has the largest customer base then it may be possible it cannot provide the best services to all these customers. So I am working on the project of the effectiveness of customer relationship management in SBI bank. The main objective of my study is to determine how this bank has the largest customer base and how it is providing the best services to the customers. How it is providing the services individual to each customer irrespective of whole customers.. In last to find that the customer is satisfy from these various products and services of bank, from their dealings, their facilities provided, their behavior with the customers etc.? As to survive and to make profits, the bank has to strengthen its customer base and it can only be done through the customer satisfaction and maintaining long term relation. And for this, customer’s behaviour and customer’s demand should be analyzed and that is what I try to do in this report. And the scope of my study is not only confined to one category. But I have covered all the categories of products and services and also all the classes of customers because I have collected the data from inside the Bank, market and some friends home.
The main Scope of the study is: 1) To find out the customers’ satisfaction level.
2) To find out why customers have an account in more than one bank.
3) To find the pitfall in the services of the bank.
4) To throw light on how banks are meeting the needs of customers separately in order to maintain long relation.
5) And what bank should improve to increase its customers’ base and to compete other banks?
CHAPTER- 3
RESEARCH DESIGN & METHODOLOGY RESEARCH PROBLEM:
-“ Effectiveness of customer
relationship management in STATE BANK OF INDIA”
TYPE OF RESEARCH: - Descriptive Research Blend of Descriptive method has been used in this research for the collection of data. As the research is related to the study of consumer satisfaction, which can more effectively be studied through direct questions, personal interview and informal talks- experimental research will not much effective. Also, considering the time constraints, descriptive research leading to conclusive result is the most suitable design for this research as it is related to why anything happening. It checks the behavior features of a customer.
DATA COLLECTION METHOD: PRIMARY DATA:-Questionnaire Method The data has been collected through questionnaire method. The questionnaire was designed in such a way to cover as many aspects of consumer behavior as possible. Many questions have been asked in it for feedback from customers. In it both opened ended questions and close ended questions have been asked for study.
Secondary Data:Under this data is taken from the internet. All the data related to its profile, mission and capital structure is taken. Even data related to this study is also taken from the book which is sent to bank’s manager annually and also quarterly related to its management, mission and many other things.
SAMPLE DESIGN: - Random Sampling SAMPLE SIZE: -
100
SAMPLE UNIT: -
Individual
GEOGRAPHICAL LOCATION: - DELHI STATISTICAL TECHNIQUES USED: Percentage
Analysis
CHAPTER-4
Introduction
For a long time companies saw their customers only as transactions, focusing their efforts on everything that surrounded the customer but without ever actually getting to the customer. Every organization realizes the need to get closer to the customer to increase market share and fight competition, particularly in the fast moving turbulent environment. Thus the marketing functions are fast changing to adapt themselves to changing challenges faced at various fronts. With multiple sales channels, increasing competition and ever-reducing margins, the need to listen to the customer closely has never been greater than it is today.
Building a long lasting, mutually beneficial relationship with the customer has assumed tremendous importance in today’s business environment. Marketers now understand that retaining the customers is far more challenging though profitable than acquiring new customers in the fast moving competition. The most profitable companies are those that make the smartest decisions about investments in attracting and retaining customers. Thus the traditional transactional approach to achieve marketing goals became insufficient. This situation necessitated the emergence of new approach namely relationship building through “CUSTOMER RELATIONSHIP MANAGEMENT”. Customer Relationship Management (CRM) has now become a strategic necessity for the sales and business development professionals who continuously strive to be one up their competitors.
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 bank's 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. History of Customer Relationship Management
Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them. In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the promise of CRM is becoming a reality The evolution of CRM was gradual. The concentration at the beginning was only on consumption. Human activities were confined to consuming whatever was available within their reach. Then the concentration slowly moved towards production. Production was though in starting just for consumption on later it moved towards production for exchange. During the sales era, production was performed exclusively for sales and the attention was just on the product. Whatever was produced became saleable because of the limited supply. This made organization move towards marketing activities. It is at this stage the concentration shifted from products to customers. Understanding and meeting customers’ needs became imperative for any business survival. Thus the emergence of customer driven
organizations, keeping customers as their focal point took place. However cut throat competition made it difficult and challenging to retain customers. CRM emerged as a new approach enabling marketers with brand new tool and techniques to reach, acquire, retain and expand customer base. Through CRM companies tried to re-personalize their customer relationships by installing sales technology - sales contact management, Web personalization of e-sales messages, and sophisticated segmenting and predictive modeling tools for more tailored sales messages.
In the beginning…
The 1980’s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers. In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didn’t provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do. However database marketing was too costly, too difficult and didn’t pay out on the bottom line, except in the case of business-to-business key account marketing. A little database marketing went a long way, which was very good news for everyone except technology vendors. Organizations could do quite well simply by knowing how recently and frequently customers purchase; how much they spend; what they purchase; and an iota of customers’ demographics. Advances in the 1990’s
In the 1990’s companies began to improve on Customer Relationship Management by making it more of a two-way process. Instead of simply gathering data for their own use, they began giving back to their customers
not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty. This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service. True CRM comes of age
Real Customer Relationship Management as its thought of today really began in earnest in the early years of this century. As software companies began releasing newer, more advanced solutions that were customizable across industries, it became feasible to really use the information in a dynamic way. Instead of feeding information into a static database for future reference, CRM became a way to continuously update understanding of customer needs and behavior. Branching of information, sub-folders, and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics, but information on the motivation and reactions of customers. The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage. Where earlier companies had difficulty supporting the enormous amounts of information, Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions. With the increased fluidity of these programs came a less rigid relationship between sales, customer service and marketing. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product. Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology.
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 organization's strategy, people, technology and business processes. Customer Relationship Management (CRM), also known as relationship marketing or customer management, is an information technology industry term for the methodologies, strategies, software, and other web-based capabilities used to help an enterprise organize and manage customer relationships. The goal of CRM is to aid organizations in better understanding each customer's value to the company, while improving the efficiency and effectiveness of communication. CRM captures, analyzes, and distributes all relevant data from customer and prospect interactions to everyone in the organization. This distribution of information helps an organization better meet customer, product, and service needs. CRM has replaced traditional marketing techniques that focused on key marketing mix elements, such as product, price, promotion and place. By being too functionally-based, traditional marketing techniques neglected the customer in the after-sales process and failed to meet customers' desires. CRM emphasizes customer retention over customer acquisition and is recognized as one of the most viable tools used to further a company's success in the highly competitive business world. There are three major areas that focus on customer satisfaction: sales, marketing, and service. The functionality of and between these three fields is essential to successfully connecting a company's front and back offices to facilitate effective, enterprise-wide coordination. The professional sales force predicts and proposes the real-time analysis of information and distributes this information to the company and business partners. Marketing concentrates on personalizing customer preferences and offering them satisfying experiences. Service is associated with the companies' call centers and coordinates interaction between Web, e-mail, and other communication medias. These fields are developed further with the help of CRM automation.
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. MODEL OF CRM We now consider the Business Strategy Perspective on CRM. Here, we propose a model, which is a hybrid, and typical of many of the models and diagrams of CRM that you will find on The Internet and in popular books on the topic of eMarketing/eCommerce. The model has three key phases and three contextual factors:
Three key phases: • • •
1. Customer Acquisition. 2. Customer Retention. 3. Customer Extension.
Three contextual factors: • • •
4. Marketing Orientation. 5. Value Creation. 6. Innovative IT.
1. Customer Acquisition - This is the process of attracting our customer for the first their first purchase. We have acquired our customer. Growth - Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time. 2. Customer Retention - Our customer returns to us and buys for a second time. We keep them as a customer. This is most likely to be the purchase of a similar product or service, or the next level of product or service. Growth - Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us regularly. 3. Customer Extension - Our customers are regularly returning to purchase from us. We introduce products and services to our loyal customers that may not wholly relate to their original purchase. These are additional, supplementary purchases. Of course once our loyal customers have purchased them, our goal is to retain them as customers for the extended products or services. Growth - Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase additional or supplementary products and services. 4. Marketing Orientation - means that the wholes organisation is focused upon the needs of customers. Customer needs are addressed by the Three Levels of a Product whereby the organisations not only supplies the actual, tangible product, but also the core product and its benefit, and also the augmented product such as a warranty and customer service. Marketing orientation will focus upon the needs of consumers for all three levels of a product. (N.B. 'market' orientation and 'marketing' orientation are not the same).
5. Value Creation - centres on the generation of shareholder value based upon the satisfaction of customer needs (as with marketing orientation) and the delivery of a sustainable competitive advantage. 6. Innovative IT - is exactly that - Information Technology must be up-todate. It should be efficient, speedy and focus upon the needs of customers. Whilst IT and/or software are not the entire story for CRM, it is vital to its success. CRM software collects data on consumers and their transactions. Huge databases store data on individuals and groups of individuals. In some ways, CRM means that an organisation is dealing with a segment of one person, since every consumer displays different purchasing habits and preferences. Organisations will track individuals, and try to market products and services to them based upon similar buyer behaviour seen in other individuals (e.g. When Amazon tells you that customers that viewed/bought the same product as you, also bought another product).
Building Customer Relationship Management •
•
Achieving the long-term value of customer relationship management (CRM) requires a strategy involving the whole business and should be approached at an enterprise level. Only a small, but growing, number of enterprises are tackling CRM at this level, with most CRM initiatives consisting of departmental projects or attempts to integrate the work of multiple projects. Executing CRM requires board-level vision and leadership to drive a “relentless focus on the customer.” It involves learning new customer management skills, culture and organization, and grappling with the technology challenges of multi-channel alignment and systems integration. Even if the top management accepts the need for enterprise-level CRM, the high reliance on meeting sales and profit targets often mean that, although CRM is the most important challenge facing an enterprise, it is not seen as the most urgent. Besides lack of leadership and support from top management, the main reason that enterprises are not approaching CRM at an enterprise level is inability to see the “big picture”, lack of a strategic framework to provide the support for the CRM journey.
•
•
•
Gartner created the Eight Building Blocks of CRM— a framework to help enterprises see the big picture, make their business cases and plan their CRM implementation. The framework can be used to develop the CRM vision and strategies. It can also be the basis of an assessment of the enterprise’s existing and required CRM capabilities, to help understand its current position and future strategy.
The framework emphasizes the need to create a balance between the requirements of the enterprise and the customer. The two central building blocks in Figure 1 (valued customer experience and organizational collaboration) are joined by a yin and yang motif to emphasize that this is where people meet, build relationships and provide value to each other. Too many CRM initiatives suffer from an inward focus on the enterprise, whereas the point of CRM is to achieve a balance between value to shareholders or stakeholders and value to customers for mutually beneficial relationships.
The Eight Building Blocks of CRM are
1. CRM Vision: Leadership, Market Position, Value Proposition 2. CRM Strategy: Objectives, Segments, Effective Interaction 3. Valued Customer 4. Organizational Collaboration 5. CRM Processes: Customer Life Cycle, Knowledge Management 6. CRM Information: Data, Analysis, One View Across Channels 7. CRM Technology: Applications, Architecture, Infrastructure 8. CRM Metrics: Value, Retention, Satisfaction, Loyalty, Cost to Serve
“Creating a CRM Vision” •
Successful CRM demands a clear vision so that a strategy and implementation can be developed to achieve it. The CRM vision is
how the customer-centric enterprise wants to look and feel to its customers and prospects — the customer value proposition (CVP) and the corporate brand values are key to the CRM vision. Without a CRM vision, the enterprise will not stand out from the competition, target customers will not know what to expect from it and employees will not know what to deliver in terms of external customer experience. A successful CRM vision is the cornerstone to motivating staff, generating customer loyalty and gaining a greater market share.
“Developing a CRM Strategy” •
A CRM strategy is not an implementation plan or road map. A real CRM strategy takes the direction and financial goals of the business strategy and sets out how the enterprise is going to build customer loyalty — that “feel-good factor” of customer connection with an enterprise that means customers stay longer, buy more, recommend the enterprise to others and are more willing to pay a premium price. The objectives of a CRM strategy are to target, acquire, develop and retain valuable customers to achieve corporate goals.
“Customer Experience: The Voice of the Customer”: •
Customers’ experiences when interacting with the enterprise play a key role in shaping their perception of the enterprise — the value it provides and the importance it places on the customer relationship. Good customer experiences drive satisfaction, trust and long-term loyalty. Poor customer experiences have the opposite effect and, because bad news travels faster and further than good news, they harm the enterprise’s ability to create new relationships with prospects. No amount of internal “second guessing” can simulate what it’s really like to be a customer.
“True CRM Requires Organizational Collaboration” •
Many enterprises believe that implementing CRM technologies makes them a customer-centric organization. They forget, ignore or deliberately avoid the necessary changes to the enterprise itself. True
CRM means that individuals, teams and the whole enterprise must become more focused on the needs and wants of the customer. The term “organizational collaboration,” highlights the many facets of the customer-centric internal change needed to deliver the required and desired external customer experience. As a critical part of a CRM program, it will involve changing organizational structures, incentives and compensation, skills and even the enterprise culture.
“Customer Process Re-engineering: Talk to Your Customers” •
Past efforts to re-engineer processes were primarily driven by the desire to improve the efficiency of an enterprise and reduce costs. The beneficiary was the enterprise, not its customers. The rise in CRM has led to a focus on reworking key processes that touch the customer and asking customers which processes matter to them. Enterprises frequently do not realize that their functionally fragmented processes often mean that the customer has a poor experience and receives less than the expected value. Successful re-engineering should create processes that not only meet customers’ expectations, but also support the customer value proposition, provide competitive differentiation and contribute to the desired customer experience.
“Customer Information: Is the Lifeblood of CRM” •
Successful CRM requires a flow of customer information around the organization and tight integration between operational and analytical systems. Having the right information at the right time is fundamental to successful CRM strategies, providing customer insight and allowing effective interaction across any channel. Unfortunately, most enterprises’ CRM information capabilities are poor — the result of numerous and fragmented departments, initiatives, databases and systems. Enterprises that establish a business plan for sourcing, managing and leveraging their customer information assets are more likely to achieve their CRM goals and objectives and gain a competitive advantage
“Technology Decisions Are Key to Enabling CRM Strategies”
•
For most technologists, CRM is all about technology. CRM technologies are an essential enabler for any modern CRM business strategy, but they are just one piece of the puzzle. Key Technology decisions that enterprises have to take are in three areas namely CRM applications, architectural issues and integration. In many CRM projects, integration issues start as a relatively low priority, and then rise in prominence (cost and time) as enterprises realize that true CRM requires seamless customer-centric processes, supported by integrated technology across the enterprise and its supply chain.
“Getting the Best Out of CRM Performance Metrics” •
The other seven building blocks depend on performance targets and metrics to gauge their success, and enterprises must set measurable CRM objectives and monitor CRM indicators to successfully turn customers into assets. Without performance management, a CRM strategy a program is destined to fail. “Getting the Best out of CRM Performance Metrics” introduces a framework for measuring an enterprise’s success with CRM by creating a hierarchy of performance metrics with four levels, namely: corporate, customer strategic, operational and process, and infrastructure input metrics. These metrics have an internal and an external focus and link operations to strategy and corporate financial benefits. Each enterprise will have a unique set of metrics applicable to their situation.
Need of CRM in the Banking Industry
A Relationship-based Marketing approach has the following benefits: 1. Over time, retail bank customers tend to increase their holding of the other products from across the range of financial products / services available. 2. Long-term customers are more likely to become a referral source. 3. The longer a relationship continues; the better a bank can understand the customer and his/her needs & preferences, and so greater the opportunity to tailor products and services and cross-sell the product / service range.
4. 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 consumer 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
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, regardless 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: 1. Personal, long-term relationship
2. Advice combining industry expertise and knowledge of personal circumstances 3. High quality, consistent quality 4. Security, privacy, confidentiality 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.
Challenges in Customer Relationship Management
It is indisputable that customers are the number-one asset for most companies. Without them there would be no sales, and so eventually no business. The idea behind customer relationship management (CRM) was to manage customer relationships in a personalized manner, across the enterprise and throughout the lifetime of the customer. However the picture is not as rosy as it seems to be. In truth, though, the manner in which many businesses operate, as a collection of separate business units with the associated politics, often gets in the way. There are few major stumbling blocks to realizing the CRM dream: •
Multiple lines of business are involved, but processes rarely flow
seamlessly across departmental boundaries. •
Departments need to share customer information, an act that can be
both technically difficult and politically sensitive.
•
Departments often have their own systems, and sometimes multiple
versions of systems, housing customer data that should be common across departments and systems. •
Many companies rely on their Web site to provide customers with
information or to support customer self-service, but the site often is managed by yet another department, adding to the difficulty of keeping information up-to-date and consistent across all the various departmental systems. •
Next problem is to decide what kind of customer information is
relevant and how it will be used. Customers’ retention often poses another difficulty. A study by Mookherjee, A and Shainesh, G., 2000 indicate that “In competitive markets even satisfied customers switch or defect to competitors offers. Since profitable customers are more loyal for any organization there is a need to identify better predictors of loyalty. Indicators of relationship strength like trust, satisfaction and commitment are better predictors of loyalty.” By including these parameters in building CRM managers can develop a system with a focus on customer loyalty.
For CRM to work, companies must bring together a number of disparate processes, systems and types of data, regardless of where they reside, to deliver an integrated, unified view of the customer that drives a consistent approach to interactions that is proactive as well as reactive. One of the most common tactical ways of overcoming this issue is to implement a centralized data warehouse. The key is strong business intelligence (BI) focusing on
customer information. Once this exists, customer information, wherever it resides, will be available for analysis to provide insights and guide interactions across the enterprise. Further for any CRM initiative to be truly effective, an organization must convince its staff that change is good and that CRM will benefit them. Then it must analyze its business processes to decide which need to be reengineered and how best to go about it. A team of carefully selected executives must choose the right technology to automate what it is that needs to be automated. This process, depending upon the size of the company and the breadth of data, can take anywhere from a few weeks to a year or more.
STATE BANK OF INDIA
State Bank of India (SBI) is government-owned and is the largest bank in India. If one measures by the number of branch offices, SBI is the second largest bank in the world. It traces its ancestry back to the Bank of Calcutta, which was established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. In recent years the bank has focused on three priorities, first, reducing its huge staff through Golden handshake schemes known as the Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private sector, second, computerizing its operations and third, trying to change the attitude of its largely rude staff through a programme aptly named 'Parivartan' or 'change'. On the whole, the Bank has been successful in the first two initiatives but has failed in the third.
Associate banks There are seven other associate banks that fall under SBI. They all use the "State Bank of" name followed by the regional headquarters' name. These were originally banks belonging to princely states before the government nationalized them in 1959. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks with the State Bank of India to expand its rural outreach. The State Bank group refers to the seven associates and the parent bank. All the banks use the same logo of a blue keyhole. Currently, the group is merging all the associate banks into SBI, which will create a "mega bank", and one hopes, streamline operations and unlock value.
• • • • • • •
State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore
Growth State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime Minister of India. With 10000 branches and a further 4000+ associate bank branches, the SBI has extensive coverage. Following its arch-rival ICICI Bank, State Bank of India has electronically networked most of its metropolitan, urban and semiurban branches under its Core Banking System(CBS), with over 4500 branches being incorporated so far. The bank has the largest ATM network in the country having more than 5600 ATMs [1]. The State Bank of India has had steady growth over its history, though the Harshad Mehta scam in 1992 marred its image. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.
CUSTOMER CARE Customers of the Bank can meet senior executives of the Bank on 15th of every month (between 3.00 p.m. and 5.00 p.m.) without any prior appointment and discuss issues relating to their accounts/banking transactions. In case 15th of month is a holiday, customer can meet on the next working day. In case, excessive delay in resolving their problems is experienced,
customers can contact the helpline of the Local Head Office, under whose control the branch functions I. State Bank of India strongly believes that a satisfied customer is the most important factor for growth of its business. The Bank was the first in India to introduce a code of Fair Banking Practices in India called “Towards Excellence”. The code reflected the commitment of the Bank to provide Banking services of a high order to individual banking customers. The code came into effect from October 1997 as part of the Golden Jubilee Celebrations of Indian Independence. The Code was substantially revised in the year 2005 taking into consideration the transformation in banking practices and customer service standards that have since taken place. II. In February 2006, Reserve Bank of India set up the Banking Codes and Standards Board of India (BCSBI) as an independent autonomous watchdog to ensure that customers get fair treatment in their dealings with Banks. The BCSBI has published the “Code of Banks’ Commitments to Customers “ (the Code) which sets minimum standards of banking practice and benchmarks in customer service for banks to follow. SBI is a member of the BCSBI and has therefore voluntarily adopted the Code as its Fair Practice Code in dealings with its customers. The complete copy of the Code is available at http://www.bcsbi.org.in/Code_of_Banks.html III. This document called the “Citizens’ Charter of State Bank of India” provides key information on various facilities/services provided to customers in ordinary branches of State Bank of India. The Code together with the Citizens’ Charter will thus ensure high standards of accountability, responsibility and transparency in the Bank’s dealings with customers. The Charter also provides comprehensive information on Bank’s Grievance redressal mechanism. It also specifies the obligations on the part of the customers for healthy banker-customer relationship. IV. This is not a legal document creating rights and liabilities. The information on general terms and conditions provided herein may not apply to special branches of the Bank like Personal Banking Branches etc. (The information on services provided by these branches can be obtained from the branches or the helplines of the respective Local Head office Centres). Loans and advances may also have specific terms and conditions not mentioned in the Charter. However, all terms and conditions will comply with the principles and commitments undertaken by the Bank in the Code.
V. Copies of the Code and Citizens’ Charter will be available on request to all our customers at our branches, administrative offices and at our web site. We will ensure that all our staff members are aware of the commitments contained in these documents and faithfully implement them. VI. The Charter provides essential information on transactions relating to savings, current and fixed deposit accounts, collections and remittances, grievance redressal etc. For further details and complete information on terms and conditions of service visit our branches or write to our Local Head Offices (addresses and contact nos. available on our website www.sbi.co.in). VII. Information given in the Charter is current as of March 31 2007. Information given is subject to change/revision. The Bank will endeavour to update the information on the website when changes are made but please contact the nearest branch/Zonal Office/Local Head Office for the latest changes, If any. VIII. We request all our customers to keep us informed of their experiences about the customer services rendered at our branches and feel free to comment on the Code and Citizens Charter. Your feedback will help us evaluate, improve and widen our range of services. Your comments and feedback may be sent to the address given in paragraph VI above.
VARIOUS FACILITIES AND SERVICES OFFERED BY BANK
Personal Banking Agricultural/Rural NRI Services Deposit Schemes Agricultural Banking Personal Finance Micro Credit Services Regional Rural
Who is NRI? Type of Accounts
Banks
International
Corporate Banking
Profile
Corporate Accounts
Trade Finance Merchant Banking
Mid Corporate Group
Correspondent Banking
Project Finance Products & Services
Services
Govt. Business
Internet Banking Govt. Accounts ATM Services e-Z Trade
SME Project Uptech
Public Provident Charter for SSI Fund SBI e-Tax
CHAPTER-5
Ques :1 Since when are you availing the services of SBI?
YEARS
PERCENTAGE
Less than 1 yr
36
1-3 yr
34
More than 3 yr
30
PERCENTAGE
30%
36%
34%
less than 1 yr
1-3 yr
more than 3 yr
INTERPRETATION:The data given above clearly explain itself that the SBI bank is performing very well. As the percentage of new customers is increasing every year from 30 to 34 and 36 percentage, which is quite satisfactory, as in the presence of other public and private banks which are attracting the customers with new methods.
Ques:2
Which type of services are you availing at present?
SERVICES
PERCENTAGE
Current a/c
12
Saving a/c
91
Fixed Deposit
22
Mutual Funds
7
Others
0
100
91
90 80 E G A T N E C R E P
Current a/c
70 60
Savings a/c
50
Fixed de posit
40 30 20
22
Mutual Funds
12 7
10
0
Others
0 PERCENTAGE SERVICES
INTERPRETATION:-
As per the research, the data collected shows that the percentage of the saving account is the highest as compared to other accounts. The business
class account i.e. current account is having 12 percent which is low and the percentage of the fixed deposits is 22 i.e. satisfactory and the mutual fund investor’s ratio is 7 i.e. because of the low interest of people in mutual funds and prefer old investment methods.
Ques:3
Are you satisfied with the services offered by bank staff?
RESPONSE
PERCENTAGE
Yes
88
No
31 PERCENTAGE
31
Yes
N o
88
INTERPRETATION:The research shows that the dealings and behaviour of the staff members are up to mark and generally customers are satisfied. Few of the customers says no as they are facing some problems due to more work load on staff and having less time to deal with them.
Ques:4 If yes, what are the various factors on which you are satisfied?
FACTORS
PERCENTAGE
Co-operative Behavior
73
Less Time Consuming
30
Provide Valuable Information
23
Others
0
80
73
70 E G A T N E C R E P
60 50 40
30
30
23
20 10
0
0 PERCENTAGE
Co-operative Behaviour Provide Valuab le Information
Less Time Consum ing
FACTORS
Others
INTERPRETATION:The ratio of the satisfactory customers is quite good and the customers are happy with the cooperative behaviour of the staff. Due to the competent staff members the work performance is quick and efficient and so they take less
time to resolve quarries of customers and provide valuable information to them.
Ques:5
If no, what are the various factors on which you are not
satisfied?
FACTORS
PERCENTAGE
Less Co-operative Behaviour
14
More Time Consuming
18
Doesn’t Provide Any other Valuable Information
11
Others
1
PERCENTAGE
1 11
Less Co-operative Behaviour
14 More Time Consuming
Doesn’t Provide Valuable Information Others
18
INTERPRETATION:-
As the coin has 2 sides similarly some of the customers are also there who are dissatisfied with the dealings of the staff. In their opinion the staff member’s behaviour is not cooperative and they also take more time to resolve their problems. Moreover they don’t provide any valuable information.
Ques: 6 In addition to SBI Bank, which Bank’s services currently you are availing?
BANKS
PERCENTAGE
Kotak Mahindra
14
OBC
9
PNB
15
HDFC
26
Others
18
None
18
PERCENTAGE Kotak Mahindra 14
18
OBC 9
18
PNB HDFC
15 Others 26
None
INTERPRETATION:As the business needs can’t be satisfied with availing the services of one bank, so the customers are also having the accounts in other banks. Most of
the customers are having the services of HDFC bank in addition to SBI (state bank of India). As almost all banks’ branches are there in DELHI, so the customers are having their accounts in PNB, Kotak Mahindra, OBC, and others.
Ques: 7 What is prompting to you not avail the services of only SBI Bank?
REASON
PERCENTAGE
Not do fast proceesing
11
Strict Requirements
28
More emphasis to Private Sector Banks
25
Others
16
Didn’t Specify
29
Percentage
11 29
28
16 25 Not do fast proceesing Strict Requirements More emphasis to Private Sector Banks Others Didn’t Specify
INTERPRETATION:As one bank can not fulfill all business requirements, so on the question of using other bank’s facilities are, most of the customers thinks that the requirements of the SBI Bank is very strict. Next reason is, many customers are gaining faith on Private sector banks. Very few are dissatisfied due to slow processing; many other customers didn’t specify particular reason due to personal problems.
Ques: 8 Are you aware of the various services offered by the SBI Bank?
RESPONSE
PERCENTAGE
Yes
50
No
34
Can’t say
16
Percentage
16
50 34
Yes
No
Can’t say
INTERPRETATION:The awareness of the customers of SBI Bank is quite well. As per survey many customers are fully aware about all services and many of them are not having full information as due to lack of personal interest and some has not given the answer to this question.
Ques:9 Tick the following which services are you aware of? DIRECT BANKING FACILITIES
PERCENTAGE
E-Banking
39
Phone Banking
37
Money Transfer
20
Facilities through ATM
77
Didn’t specify
9
90
E- Banking
80 G A T N E C R E P
70
Phone Banking
60 50
Money Transfer
40 Facilities through ATM
30 20
Didn’t specify
10 0
FACILITIES
INTERPRETATION:-
No body today is untouched with the facility of ATM, so this is the most currently in use. In modern business times the e-commerce is the backbone of business so the net banking is also the main product of the banking system and also due to the busy schedule of the businessman the phone and mobile banking is highly in use. The SBI bank is also providing the facility of the money transfer but this facility is yet to get popularity as very few customers is aware about it.
Ques:
12 What are the various problems that you come to face
while dealing with Bank?
PROBLEMS
PERCENTAGE
ATM is not working
10
Long queues at teller counter
34
Taking more time to resolve the queries
20
Rigid requireme requirements nts
15
Less customer dealing time
8
Cheque is not credited to a/c
5
Didn’t specify
17
40 35 e 30 g a 25 t n e 20 c r 15 e P 10 5 0
34
20
17
15 10
t o n s i
g n i M k T r A o w
8
s s e t r e e n h s u r r o o t e e m e l e t t e i e i d u l n g e v r m g e e u q t l e i r n m o u R i g t o i i t s q u n a c k e a q o r e T L r
e r m e t i s m s o g e t n l L s i u a c e d
5 s d i e t e i c d u e / q r a e c o h t t C o n
y f i c e p s t ’ n d i D
Problems
INTERPRETATION:There are many aspects where SBI bank has to give attention. Generally customers are facing many problems like long queues at teller counter, high charges for not maintaining AQB etc. Customers want reforms on many problems like increase the customer dealing time and in order to retain customers they have to resolve these problems.
Ques: 13 What would you recommend to improve SBI Bank’s services further?
RECOMMENDATIONS
PERCENTAGE
Increase customer dealing time
16
Improvement Improvem ent in Infrastructure
44
Improve Net Banking
41
Provide Services equal to private sector bank Others
48
Didn’t Specify
5
18
Percentage
18
5
16
44 48
41
Increase customer dealing time Improvement in Infrastructure Improve Net Banking Provide Services equal to private sector bank Others Didn’t Specify
INTERPRETATION:On the question of the recommendation, 48% customers say that this bank should provide services equal to private bank. 44% customers say that they are facing problems due to poor infrastructure, so intention should be given to this aspect. 41% customers say that the bank should improve net banking. 16% customers feel that the customer dealing time is less, so Banking Hours should be increased.
CHAPTER- 6
FINDINGS •
•
•
•
•
•
•
In Delhi, there are number of banks, despite of the tough competition, the number of the new customers of SBI Bank are increasing every year.
91% customers are having their savings account. The current account user are very less while percentage of the fixed deposits is 22.
88% customers are satisfied with the Bank’s services and Behavior and only 31% are dissatisfied with the Bank’s performance.
Most of the customers are happily satisfied with the staff’s cooperative behaviour. They are satisfied with the fast processing of transaction as they take less time. They get valuable information at time.
Very few people are dissatisfied because of more time consuming transaction and less cooperative behaviour.
26% of the SBI Bank’s customer are having their account in HDFC,15% in PNB,14% in kotak mahindra etc. which shows that the user of the HDFC is highest.
28% respondent says that they have account in other bank due to strict requirement, 25% are saying that they give more importance to private sector banks. 29% doesn’t specify the reason.
•
•
•
•
The awareness about the various services is quite good but not satisfactory as 50% customers are aware about the various services of the bank, 34% are not aware about the services and 16% respondents answer to can’t say.
The user of the ATM is the highest and the use of the net banking and phone banking is the second highest, while the knowledge about the money transfer is very less among the customers.
Some Customers are having problems with the bank’s working conditions as 34% customers said that there are long queues at teller counter, 20% said staff take more time to resolve queries, 15% said about strict requirement and many others reasons.
44% of the customers require improvement in infrastructure and 48% customers want that SBI should also provide services equal to private banks. While 41% customers want improvement in e-banking service. 18% doesn’t specify.
CHAPTER-7
SWOT ANALYSIS OF SBI BANK SWOT Analysis:-SWOT Analysis is mainly to see what are the various strength, weakness, opportunities and threats of the organization. As we know that every organization is specialize in one field and weak in other field. No one organization can be specializing in every field because it is beyond its scope. If every organization will be specialize in every field then there will not be any competition between various organizations and it will not have fear of lose the business to other organizations. So this analysis is given as follow:
STRENGTHS:-
Main strength of this bank is, it is the largest bank of the INDIA, it has wide network of branches and ATM overall pan INDIA.
Less charges are taken from the customers for providing the services. Most of customers arevhappy due to this complaint of this.
This bank also keeps that type of customers which are of low profitability. It believes not only in profit which is main aim of every organization. It is also perform social responsibility.
This bank has monopoly in most of fields as it provide clearance house, come most important after RBI, provide loans to the poorest farmers and needing persons.
It has seven subsidiary banks ,all of these capture more market growth rate by more synergy.
WEAKNESS:-
First weakness of this branch is ,it doesn’t issue the memo immediately if any one work is not perform in time or any one come late. No one take responsibility on his shoulder .
High networking technology is used in some branches. All branches are not computerized and high security softwares are not used.
Daily performance chart of the organization doesn’t come on the computer of every employee as in private sector bank. Even performance of the employee also doesn’t come.
No incentives are given to the employees for motivating them. Even the incentive is also not fixed for the employee who has operation work. Only they have to perform customers work. High discipline is not used in the branch as it is requirement of every organization. No organization can exist in this competitive environment without it.
In this bank, account is open with minimum of Rs.1,000. Some low class person cannot manage this amount in initial stage.
Every employee in this branch is overloaded with work. The work distributed is more than working capacity of the employee.
This bank spends less on basic facilities what I have found that are very old ATM which mostly remain out of work, no sitting and standing arrangement etc………….
OPPORTUNITIES :
It can increase its network more as good response is coming as customer base is increasing, it means people are ready to take services of this bank.
It can relax some of its internal rules to catch more customers. Many other banks have not rules which this bank has put in ahead of customers.
From the customer feedback it is found that its customers have mainly saving, current accounts and fixed deposits. Its customers have no insurance policy of its bank, less awareness of mutual fund. These customers should be provided full knowledge about its all products. As this bank’s customer base is increasing, knowledge of all products should be given.
It can open branches in foreign also as many of its customers are NRIs. It has tied up with other banks in foreign to handle the foreign transactions.
THREATS:-
New banks are coming in INDIA. This will increase the competition and this has to consecrate on its marketing activities.
New banks are giving relaxations to its customers. So it will have to change its rules.
New banks are poaching the employees of this branch. So this bank has to retain its employees with it.
New banks are spending more to capture the more customers so this bank will have to change its policy of less spending or it will have to find new mean to retain its customers with it.
CHAPTER- 8
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 solutions and banks use the same to cement long-term, mutually beneficial relationships. From above complete analysis, this is clear. So at the last we can say that SBI bank has good scope in future and try to compete with the private sector banks.
CHAPTER- 9
RECOMMENDATIONS
The research shows that the teller is the most crowded counter and always having long queues, so teller should be increased.
Bank should also have to improve its infrastructure as customers feel inconvenience in sitting and standing.
As e- commerce is going on increasing, many customers want this bank improve net banking more.
Customers say that may be this public bank does not services more than private banks but it can try to provide services as equal.
Some customers have also strongly recommended that the number of branches of bank should be increased in DELHI.
Pay attention for a long time to only one customer with whom staff is dealing, as other customers are also waiting and staff should understand we should not waste other customers’ valuable time.
Banking hours should be increased .as the bank close the customers’ visit by 3:30p.m. Which is very incontinent to the customers?
As the cheque is not cleared in time due to lack of attention. So staff should pay proper care that cheque should be credited in customers’ a/c in time.
Bank should decrease its AQB’s non maintenance charges.
CHAPTER- 10
LIMITATIONS In spite of the best efforts there are always some problems or limitations associated with market research that cannot be removed but can be minimized only. In this survey also there could be certain error due to these factors.
Small Sample Size •
Its sample size is very small as compared to total customer base that means our sample size is comparatively small in accordance with the universe, which is large enough. So deduction drawn from the project can’t be generalized. Scope of the project is limited to Delhi region only. That can’t be generalized to the whole of universe of SBI Bank’s customers.
Non Response Error •
As this research is based upon responses provided by customer, so nonresponses and some wrong responses may become part of error.
Sampling •
It is not possible to cover each and every customer so it has been tried to cover all section of customer by taking representative sample, which limit the research to a certain extent.
These limitations may have effect on findings of the work but not up to large extent and thus do not affect the findings of the work very significantly. Some of the respondents didn’t like to share their views and some were ignorant about the facts of SBI Bank.
BIBLIOGRAPHY Berry, L. L. (1983). Relationship Marketing. In L.L. Berry, G.L. Shostack, & G.D. Dpah (Eds.), Emerging Perspectives on Service Marketing (pp. 28-38). American Marketing Association. Gronroos, C., ‘From Marketing Mix to Relationship Marketing: Towards the • Paradigm Shift in Marketing’, Management Decision, no. 32(2), 1998, pp. 420. •
Shainesh,G. and Sheth, J.N. (2006): Customer Relationship Perspective: A Strategic Perspective, Macmillan India Ltd.. Sheth, J.N. and Parvatiyar(2000): A. Handbook of Relationship Marketing, Thousand Oaks, California: Sage Publications ,
www.crm2day.com • www.crmguru.com
QUESTIONNAIRE Dear Respondent, The purpose of this project is to assess the effectiveness of Customer Relationship Management (CRM) Practices adopted by State Bank of India. Please answer the following questions. Needless to say, your response would be treated confidential and would be used only for the purpose of study. Name : - ………………
Account No :-…………………
Age : - ………………
City : - ………………..
Q: 1 Since when are you availing the services of SBI? < 1 yr
1- 3 yr
> 3 yr
Q: 2 Which type of services are you availing at present? Current a/c Fixed deposit
Saving a/c Mutual Fund
If any other, specify……………. Q: 3 Are you satisfied with the services offered by the bank staff ?
Yes
No
Q: 4 If yes, what are the various factors on which you are satisfied? Co-operative Behaviour
Less Time Consuming
Provide Valuable Information
Others
Q: 5 If no, what are the various factors on which you are not satisfied? Less Co-operative Behaviour
More Time Consuming
Doesn’t Provide Any Other Valuable Information If any other, specify…………….
