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This final chapter draws conclusions on how CRM can be initiated and improved at DFCC Vardhana Bank. The author concludes the research by summarizing the findings drawn from the literature review and the primary research explained in finding and analysis, whilst focusing on the project objectives to draw out recommendations. This chapter will end with a brief discussion on the limitations of the research and possible future research on the topic.
The author concludes that CRM initiatives and implementation activities within the organization is at its infancy stage. One of the main reasons could be the fact that the bank been in the industry for a period of six years and therefore much effort has not been directed in building relationships. The only document the author was able to find that linked a small degree of CRM activity was in the organizations marketing and sales strategy and therefore one could conclude that CRM initiatives at present is solely limited to this division in the organization. However for CRM to succeed, it requires initiatives taken from divisions across the organization (Nykamp, 2007).
Even though at present CRM initiatives are limited to the marketing and sales division the management has taken no CRM strategies besides the marketing strategy that vaguely stresses on a couple of CRM strategies. (Kale, 2004) states that no proper CRM planning and strategies in an organization is bound to organization failure, as future competitive advantage will be based on key customers and human resources.The primary research undertaken bought into light many loop holes in CRM initiatives in the organization. In order for basic CRM initiatives to succeed it requires the organization to exhaust resources into CRM dimensions.
5.2.1- Conclusions based on CRM components
Key customer focus- At present the organization has taken measures to identify 25 key customers’ based on criteria has been the quantum of transactions with the bank. How ever the author is of view that as a bank comprising close upon 1.5m in its customer base this segmentation is insufficient. Therefore the organization requires taking measures to improve on customer segmentation strategies. The current segmentation strategies followed by the bank are old segmentations strategies which are not in par with the rapidly changing world and competition. Assessment of customer lifetime value, improve on co-creation marketing and improve on cross selling and up-selling initiatives needs to be embraced by the organization. Therefore to improve on CRM initiatives the organization will have to focus on its key customers (Sin, Tse & Yim 2005) as this will assist in customer relationship building (Payne & Frow 2005; Zeithaml et al 2001; Rigby et al 2002).
CRM Organization- This component too needs to be improved in the organization. For CRM initiatives to succeed it require organizations to commit resources in all divisions to meet customer requirements (Ryals & Knox 2001; Wilson, Daniel & McDonalds 2002). Therefore the organization needs to focus on improving its human resources, as the “people” component is said to influence success of CRM (Brown 2000 cited in cited in Sin, Tse & Yim (2005, p1268).One fact that is inevitable is most of the staff lack knowledge on CRM and its benefits, staff lack motivation, enthusiasm and pro-activeness and prefer going about doing their work the way they’ve been used to. The staff lack thorough knowledge about banking and are not aware about the new products, marketing campaigns of the organization. Russell-Jones (2002) states CRM initiatives to be successful it requires change in staff culture, being customer focused. Organizations structuring will also require attention as cross functional process working towards a common goal is important to CRM to deliver positive results (Sin et al 2005).
Author’s conclusion based on CRM components are explained in the following paragraph.
Knowledge Management- The evaluation of the primary research bought into light this CRM component as the weakest in the organization. One of the finding include that the organization data gathering and capturing is only initiated at the customer acquiring stage, besides the debit and credit transactions of the customers. Improvement needs to be considered for means of collecting data and transferring it into customer knowledge as this is said to deliver CRM success (Freeland 2003 cited in Yim, Anderson & Swaminathan 2004).
Technology based CRM- The primary research on this component can be concluded by stating that this research is not up to the benchmarked standards. Findings revealed that the database currently used by the organization is a very lethargic system and not proactive and would not directly assist in CRM activities.
Therefore this component too requires the organizations attention as technology enables optimization of CRM activities and makes CRM application possible, Anderson & Swaminathan (2004).
The cross functional analysis revealed that a gap exists between the perception of the organizations employees and the perception of the customers’ on the prime objectives of CRM. The organizations employees and its customer are on two extremes. The employees perceive that customers are satisfied, are loyal and trust the bank, whilst customers appear to disagree on this, as the analysis show that customers believe that there is more room for improvement.
Therefore the organization needs to improve immensely on its CRM initiatives, plans, strategies, and implementation activities as the organization at present is not achieving CRM objectives. Another reason for the organization failing to meet the CRM objectives can be contributed to the fact that no proper initiatives have been taken to improve the basic CRM components. Failure to measure current CRM initiatives that have been rolled out also can be concluded as a factor for the organization not been up to the benchmarked standard. Therefore it’s important that organizations measure CRM as the high percentage of CRM failures has been attributed towards lack of CRM measurement indicators (Payne 2001 & Zabalah et al 2004)5.2.2- Conclusions derived from the cross functional analysis of CRM objectives in the organization.
Key finding in the customer questionnaire based on the open ended question
Summarizing the finding on the customer questionnaire where the author directed an open ended question on how the organization can take measure to improve customer experience the following were revealed
The organization taking measures rotate staff specially the relationship officers, every three months is said to dissatisfy the customers to a great extent. Reicheld (1993) agrees that organizations should be very tactful a as research has found customers are more satisfied with dealing with one staff and were easily dissatisfied when change occurred.
The customers felt that processing transactions at the branch are much more time consuming when compared with the competitors. The reason for this also could be contributed as recruitment of new staff is taking place within the bank as the bank is in its expanding stage and therefore staffs in the branch are trainees most of the time.
Customers find it hard contacting employees regarding banking matters.
Lighting in the branch needs to be improved.
Queuing time to be reduced
Introduce e-banking facility and telephone banking for transaction convenience
Extend banking hours
Therefore in order for the CRM to be initiated the organization firstly needs to allocate resources to meet the requirements of the CRM components. The primary research suggests that the employees in the organization remain a critical success factor of CRM. Therefore to enhance effectiveness of CRM ‘ organization’s people’ will play a huge role, especially in a service driven organization as it is lead by the organizations employees Rootman, Tait & Bosch (2008).
The author in the following sections will draw recommendations based on the conclusion of the analysis and research conducted on CRM appraised in the literature review. In the conclusion on the primary research conducted it was evident that CRM in the organization is at it’s very basic level and therefore will require a solid foundation to be established in order to successfully role out CRM initiatives in the future.
The author firmly believes that in order to CRM as a project to succeed within the organization calls for top management dedication and involvement for the successful implementation, this is supported by Kale (2004). Therefore before any other action is taken, gaining the organizations management involvement and drawing on their expertise will be utmost important.
However the author wishes to recommend CRM initiatives to the organization, placing emphasis on top urgent, urgent, non-urgent actions that the organization will need to action, to embrace CRM initiatives. One should keep in mind that CRM require long term planning and should be an ongoing and continues activity, which makes it not feasible in a short time frame to ensure success in the organization. Table 5.1 shows these recommendations.
(Very urgent, Urgent, Non-urgent)
1).Measures to identify the key customers of the organization
Within 6-12 months & should be an ongoing process
2).CRM strategies to be drawn clear objectives to be established and communicated across the organization. Segmenting the organizations customer base according to their profitability and value to the organization is of utmost importance.
Within 6-12 months
3) Human Resources Management. This would require organization to take initiatives to educate and train the staff, motivate them and reward them.
Within 6-12 months & an ongoing process.
4) Drawing out CRM strategies
5) Implementing E-banking and phone banking
12 -24 months
6) Take measures to improve customer service
Within 12 months & ongoing
7) Implement cross-selling and up-selling strategies
12 Months onwards
8) Initiating relationship banking
18 months onwards
9) Installing a CRM system in the organization
Within 24 months
10) Aligning the organization’s cross-functions Table 5.1- Authors recommendations based on urgency of the required action
Identifying key customers in the organization
Before any CRM initiative is rolled on the organization will require identifying who their key customers are. Mukerjee (2007) focuses on four key elements (explained in appendix), nature of the need fulfillment, fulfilling customer needs through the role of the service, customer position within the organization verses the its competitors organization and the length of customer relationship with the organization that is said to assist the organization in deciding who they select as their key customers.
The organization needs to take initiative to draw up a CRM strategy and objectives.
Here the author stresses on the important of using customer profitability based segmentation as means of a CRM strategy ( Russell-Jones 2002; Mukerjee,2007) Here organizations can segment customer based on there life time value. By doing so not only it enables the organization to identify its profitable customers, it also assist in identifying non-profitable customers and take necessary initiatives to migrate them to a different service level. Figure 5.1 depicts some of these general segment strategies introduced by Russell -Jones (2002).
Figure 5.1: General segmentation strategies
Specialized find a niche
Aim for no.1. Build on strength and eliminate weakness
Go for it!
Look for growth
No-go or Exist
Milk for cash
Recommended CRM (IT & IS) strategies for DFCC Vardhana Bank
Besides the above the author believes that improvement in the existing IT systems needs to take place. Here the author recommends a few strategies initiated in Cahoot bank, USA that proved to be successful for a medium sized bank. The basic principle underling DFCC CRM strategy can be based on its customers. The aim should be to fulfill to manage and maintain customers to increase their value to the bank. Strategies need to be drawn up to key individual customers, to manage their value by influencing their behavior, offering individual pricing/products and influencing the channel usage of the customers.
The challenge ahead faced by the bank will be to bring together the customer data collected from all the touch points, to offer one complete view of the customer across all departments in the organization. The existing data warehouse in the bank needs to be upgraded in order to capture details on a daily basis. This will enable the bank it obtain a comprehensive view of its customers and their relationships. Therefore measures need to be taken to draw out information from various data sources as described below.
Application database- This requires customers to fill in application with their personal details, which the system could forward to the banks credit agency and depending on their decision either accept or reject the customer, based on his/her credit worthiness. Their after the data base could save these details such as personal details, product selection, details about other financial relationships, credit rating etc.
Product systems- This holds the customers’ transactional information at product level. At present this system in the bank functions efficiently therefore change is not required.
Contact history- Measures need to be taken to record and maintain contact logs of the customers each time the customer contacts the bank, through any selected channel. This requires the bank to have its call center agents trained to fill in customer details at every point of contact.
Channel Usage- Customers may choose to transact with the bank through various channels. Therefore proper strategies should be drawn to capture the reasons behind the customers’ preference.
External data – Contracts could be drawn with the banks credit agencies to gather and deliver periodical feedback on customers.
Source: Customer Relationship Management: A practical approach to effective strategy by Neil Russell-Jones (2002)
Human resource management
The organization will require taking measures to manage its people component, by giving priority to its employees. Effectiveness of CRM in a service driven organization, mainly depends on the organizations employees who come in contact with customers Rootman, Tait & Bosch (2008). Allocating organization resources for training, educating, empowering, keeping staff motivated, rewarding staff and maintaining two way internal communications is required by the organization. This is supported by Dibb& Meadows 2004; Payne & Frow 2005; Jain,Jain & Dhar 2007. Taking measures to maintain loyal employees also is another initiative the author recommends. In order for the organization to create a loyal customer base, it first requires building loyal employees Reichland (2002, 2000).
The author believes that in order to bridge the gap of staff not possessing sufficient knowledge the organizations management can take pro-active measures to build a roster so staff can be cross trained in different departments. However caution should be practiced especially with staff that directly comes in contact with the customer, as in the primary research the analysis found that constant rotation of relationship officers were an unpleasant experience to customers. Reichland (2002) supports this view by stating that research in this regard has shown that customers prefer associating with the same staff and different staff every time.
The author recommends that staff need to be trained on how to create, build and maintain customer relationship on a long term and how beneficial its for the organization and simultaneously the employees too are able to benefit form the positive outcomes of CRM. The author proposes trainers to be allocated to oversee the departmental training needs and facilitate in inter departmental training and refresher sessions to employees. Presentation can be initiated by these trainers on updating new procedures as well as a recap of the on the job training. The organization will not have to recruit new staff for this purpose, the author suggests that a staff already existing within the teams can be taken and empowered.
Therefore the author believes that if the organization in the coming six to twelve months focus on these three areas to be improved it will assist the organization to lay a solid foundation for it’s CRM projects and their by create an organizational culture where implementation of CRM will succeed. The author found the ‘CRM check list’ introduced by CRM trends (2010) to be a guidance tool for organizations that are still in its infancy stage of implementing CRM. The below section fill provide recommended guidelines the bank could follow.
CRM Check list
Sponsorship- This calls for gaining support from the top management and gaining their support on CRM initiatives. As funds used for CRM will be of waste if no support and guidance is provided from the top management.
Build a Team- A CRM team need to be built in the organization to ensure continuity of the project. Sound decision making will be required when choosing the team. Efforts should be made to build a team that comprises staff covering all the divisions. People, processes and technology needs to be considered as these components will be affected.
Define business objectives- CRM strategies should be drawn in line with the organizations business strategy, keeping in mind the customers requirements.
Identify your customers- This requires identifying customers over a multiple touch points.
Differentiate- This call for segmentation of customers based on high-value and high-potential customers. It’s a must that the organization knows the customers it wants to serve understand these customers’ wants and priorities and analyze their worth/potential worth.
6. Understanding your customer- The organization requires to identify customer needs and wants.
7. Define customer experience- Identifying how customers feel about their experience with the organization, identifying the interactions that customers consider important and have measurements in place to evaluate the performance. This will assist the organization in focusing on areas that require greatest focus that will deliver greater returns. The key for developing customer experience is by developing responses that are unique, compelling and adoptable.
8. Have an integrated customer strategy- Customers needs requires to be taken into consideration without limiting it solely to tactics that address products and not customer.
9. Define and map data requirements-It requires organizations to know what customer data is necessary and the system that will originate it.
10. Standardize data- This call for the organizations to take measures to ensure access to the same data is available across all the departments in the organization.
11. Get personal- It’s important that the organization have strategies in place to target organizations service to customers individually enabling the customer to feel that they are an important aspect in the organization.
12. Develop a success metrics- CRM measurements needs to be in place.
13. Create customer engagement programs- This requires the organization to take action in rolling out programs involving customer acquisition, retention, and growth.
14. Empower & motivate staff- Staff directly facing customers must be given the ability to make decisions in order to facilitate customer satisfaction and staff motivational programs should be initiated.
5.4- Limitations of study and Scope for further research.
Since the research was based on the authors corporate head office located in the city. These recommendations might not be feasible as explained in small branches consisting limited number of customers and requires the organization to consider cultural issues, number of employees etc, as initiating this initial CRM recommendation might not me viable in a small branch. Although this research produced interesting findings about the organizations CRM initiatives, there were a few limitations in conducting the research the research methodology was limited to an internal and external customer questionnaire even thought the author considered a semi-structured interviewing process, due to organizational procedures the author had to limit the methodology of finding data to a questionnaire.
Further research is recommended by the author concentrating CRM implementation issues and best practices and the best suited method to measure the success. As CRM initiatives in the organization is at its tender stage and it would require the organization to keep its focus to reap benefits.
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