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A
STUDY OF
Customer Relationship Management in HDFC bank
Handawara,J&K.
A Summer Training Report
Submitted in partial fulfillment of the requirement for the
Award of the degree of
MASTER OF BUSINESS ADMINISTRATION
FROM
UTTARAKHAND TECHNICAL UNIVERSITY,
DEHRADUN
Submitted By Submitted To
Ramez-ul-shafi Mir Mr.Vikas Uniyal
MBA (FINANCE)
ASST.PROFESSOR
GRD IMT,DEHRADUN
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GRD INSTITUTE OF MANAGEMENT &TECHNOLOGY
RAJPUR ROAD, DEHRADUN
Acknowledgement
I express my sincere gratitude to HDFC Bank Ltd., especially to Mr. SUHAIL AHMAD
DEPUTY MANAGERRetail Sales (HDFC Bank,HANDWARW) my project guide forhis able guidance, continuous support and cooperation throughout my project, without
whom the present work would not have been possible. I would also like to thank our team
leader for providing me with the opportunity to know customers perceptions towards bank
and providing me an opportunity to work on the project Role of RCM in Customer
Satisfaction. I would like to thank the entire team of HDFC Bank.
Also, I am very thankful to all my faculty members for their help and dedication
especially Mr. VIKAS UNIYAL.Training Coordinator for his continuous guidance and
invaluable encouragement and for providing me a platform to perform better by developing
a deeper understanding of the theoretical concepts and helping me in achieving the desired
level of output.
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INTERNAL GUIDE CERTIFICATE
I have the pleasure in certifying that Mr. Ramez-Ul-Shafi Mir is a bonafied student of 3 rd
semester of the master degree in Business Administration of GRD IMT, Dehradun.
Under University Roll no:
He/She had completed her project work entitled customer relationship management in
HDFC bank under my guidance.
I certify that this is his/her original effort and has not been copied from any other source.
This project has not been submitted in any other university for the purpose of award of
degree.
This project fulfills the requirement of the curriculum prescribed by U.T.U, Dehradun. I
recommend this project for evaluation and consideration from the award of degree to the
student.
Sig:
Mr. Vikash
Uniyal
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DECLARATION
I here by declare that project report entitled CUSTOMER
RELATIONSHIP MANAGEMENT Written and submitted by me under
the guidance of Mr. VIKAS UNIYAL, GRD IMT, Dehradun, is my
original work.
The empirical findings are based on data collected by myself. While preparing
the report I have not copied from any source or other projects submitted for
similar purpose.
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Date: RAMEEZ MEER
Place: HANDWARA KUPWARA MBA III rd Sem
(2011-13)
GRD IMT
Dehradun
PREFACE
Experience is the best teacher. This saying is very well
applicable in everyones life. Therefore as a student of
management it must apply to me also. Then the question arises
that from where we can get this experience. Obviously we must
Undergo practical Training. To serve this purpose I had
undergone one and a half months summer training at HDFC BANK
LTD. and as an outcome I have prepared this project report
CUSTOMER SATISFACTION OF HDFC BANK.(CASE STUDY OF
HANDWARA BRANCH)
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In todays corporate and competitive world, I find that HDFC Bank
LTD. has the good growth and potential as compared to the other
bank. HDFC Bank LTD. has given me the opportunity to work and
get experience in a highly competitive and enhancing sector.
Contents
S.NO. TITLE PAGE NO
1. EXECUTIVE SUMMARY/ABSTRACT 05-06
2. INDUSTRY PROFILE AND COMPANY PROFILE 07-47
3. INDUSTRY PROFILE 08-14
4. HDFC BANK INDIA 15-21
5. PRODUCT DETAILS 22-24
6. CUSTOMER PROFILING AND SEGMENTATION 25-35
7. PREFERRED BANKING IN HDFC BANK 36-42
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8. CLASSICAL BANKING IN HDFC BANK 42-47
9. BOARD OF DIRECTORS 48
10. RESEARCH METHODOLOGY 49-53
11. CRM BUILDING SUCCESSFUL RELATIONSHIPS 54-58
12. CUSTOMER SATISFACTION 59-67
13. FINDINGS AND ANALYSIS 68-86
14. APPENDIX 87-96
15. CONCLUSION AND RECOMMENDATIONS 97-100
16. BIBLIOGRAPHY 101
Executive Summary
Customer Relationship Management (CRM) is fundamental to building a customer centric
organization. CRM is a key element of differentiation that allows a bank to develop its
customer base and sales capacity. The goal of CRM is to manage all aspects of customer
interactions in a manner that enables banks to maximize profitability to every customer.
Increasing competition, deregulation and the internet have all contributed to the increase in
to entry and exit for the customer, making it easier to switch banks or brokers without
feeling the pinch in the wallet. Retaining customers is a major concern for banking
institutions which underscores the importance of CRM. Customers, faced with an
increasing a array of banking products and services, are expecting more from banks in
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terms of customized offerings, attractive returns ease of access and transparency in
dealings. By using knowledge of the customer, banking can turn customer relationship into
a key competitive advantage. Banks can develop customer relationships across abroad
spectrum of touch points branches, kiosks ATMs Internet, electronic banking, smart cards,
call centers and phone banking the full integration of these systems, their associated
processes, and the methods for which information is extracted and used, forms the basis for
CRM.
The new millennium seeks to usher in the concept of "Universal Banking"as banks and
financial institution try to consolidate their place in the financial sectors and provide a one
step financial services super market to their customers. Technical banking is considered as
the mantra in today's banking scenario.
Customer is considered to be a king .The customer of the present day
dictates the terms and conditions through which his needs are to be fulfilled. Banking
industry, which is one of the measure financial service providers in the economy, draws the
attention of many with regard to the customer services.
In this context a study has been conducted with the HDFC bank to know the
role of CRM in customer satisfaction. This report gives a brief about the history and
functioning of HDFC bank and the relationship with its customers. It also attempts to
analyze the behavior and perception of customers about the facilities provided by the bank.
While dealing with customers of the bank I saw that different customers had different
perceptions towards the bank and towards different services and facilities provided by the
bank.
The main purpose of this project work is to analyze the customer relationship management
services provided by the HDFC Bank and to check the level of satisfaction, towards this
service, among the customers. Customer Relationship Management has become a
challenging issue for every institution as every organization is trying to provide services
superior to the competition, focus has shifted to retaining and enhancing the customers
rather that acquiring them; and to create loyalty among customers, CRM services have to be
exceptional.
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OBJECTIVES OF THE STUDY
Assessment of Consumer Satisfaction towards Banking Sector with special reference to
HDFC Bank. This was done by interacting with people through the medium of
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Questionnaires and Direct interviews being taken in some cases. The satisfaction greatly
depends on the quality of service, the interests being provided on various banking facilities
and the payback period for taking any sort of loan. One of the important factors affecting
customer satisfaction is the presence of on-line banking facility being incorporated by the
bank in its very basic functioning infrastructure.
The project helped in developing an insight about the Actual level of satisfaction and the
Expected level of satisfaction. The various grievances that came forwarded during the
survey and the various things which the customers wanted the bank to incorporate in its
structure is attached in the report afterwards in the form of Recommendations. Through the
project, the competitive strategies being followed by other banks were also analyzed.
INDUSTRY PROFILE
Indian Banking
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The Indian banking can be broadly categorized into nationalized (government owned),
private banks and specialized banking institutional reserve bank of India acts a centralized
body monitoring any discrepancies and short coming in the system. Since the
nationalization of banks in 1969, the public sector banks or the nationalized banks have
acquired a place of prominence and has since seen tremendous progress. The need to
become highly customer focused has forced the slow-moving public sector banks to adopt a
fast track approach. The unleashing of the products and services through the net has
galvanized players at all levels of the banking and financial institutions market grid to look
a new at their existing portfolio offering conservative banking practices allowed Indian
banks to be insulated partially from the Asian currency crises. Indian banks are now quoting
a higher valuation when compared to banks in other Asian countries (viz. Hong Kong,
Singapore, Philippines etc.) that have major problems linked to huge nonperforming assets
(NPAs) and payment defaults. Comparative banks are nimble footed in approach an armed
with efficient branch networks focus primarily on the high revenue niche relate segments.
The Indian banking has finally worked up to the competitive dynamics of the new
Indian market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are received to be futuristic and proactive
players capable of meeting the multifarious requirements of the large customer base. Private
Banks have been fast on the uptake and are reorienting their strategies using the Internet as
a medium. The Internet has emerged as the new an challenges frontier of marketing with
conventional physical world talent being just as applicable like in any other marketing
medium.
The Indian banking has come from a long way from being sleepy business institution
to a highly proactive and dynamic entity. This transformation has been largely brought
about by the large dose of liberalization and economic reforms that allowed banks to
explore new business opportunities rather than generating revenues from conventional
streams (i.e. borrowing and lending). The banking in India is highly fragmented wit 30%
banking units contributing to almost 50% of deposits and 60% of advances. Indian
Nationalized banks(banks owned by government) continue to the major lenders in the
economy due to their size and penetrative network which assures them high deposits
mobilization. The Indian banking can be broadly categorized into nationalized, private and
specialized banking institutions.
The Reserve Bank of India acts as centralized body monitoring any discrepancies
and shortcoming in the system. It is the foremost monitoring body in the Indian financial
sector. The nationalized banks (i.e. govt. owned banks) continue to dominate the Indian
banking arena. Industry estimates indicate that out of 274 commercial banks operating in
India, 223 banks are in public sector and 51 are in private sector.
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Currently (2007), banking in India is generally fairly mature in terms of supply,
products range and reach-even though reach in rural India still remains a challenge for the
private sector and foreign banks in terms of quality of assets and capital adequacy, Indian
banks are considered to have clean, strong and transparent balance sheets relative to other
banks in the comparable economies in its region. The Reserve bank of India is an
autonomous body, with minimal pressure form the government. The stated policy of the
bank on the Indian rupee is to manage volatility but without any fixed exchange rate and
this has mostly been true.
In March, 2006. The Reserve Bank of India allowed Warburg pincus to increase its
stake in Kotak Mahindra (a private bank) to 10%. This is the first time an investor has been
allowed to hold more than 5% in a private sector bank since the RBI announced norms in
2005 that they mat stake exceeding in the private sector banks would need to be vetted by
them.
Currently, India has 88 schedules commercial banks (SCBs) -28 public sector banks(that is with the govt. of India holding a stake), 29 private banks (these do not have govt.
stakes), they may be publicly listed and traded on stock exchange and 31 foreign banks,
they have a combined network of over 53,000 branches and 17,000 ATMs.
Phase I
The general bank of India was set up in the year 1786. Next came bank of Hindustan and
Bengal bank. The East India Company established bank of Bengal (1809). Bank of Bombay
(1840) and bank of Madras (1843) as independent units and called it presidency banks.
These three banks were amalgamated in 1920 and imperial bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara bank, Indian Bank and
Bank of Mysore were set up. Reserve bank of India came in 1935.
During the first phase the growth was very slow and the banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. Tostreamline the functioning and activities of commercial banks the government of India came
up with the Banking Companies Act, 1949 which of was 1965(Act no. 23 of 1965). Reserve
Bank of India was vested with extensive powers for the supervision of banking in India as
the central banking authority.
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During those days public had lesser confidence in the banks. As an aftermath deposit
mobilization been slow. Abreast of it the saving bank facility provided by the postal
department was comparatively safer. Moreover, funds were largely given to traders.
HISTORY OF BANKING IN INDIA
Without a sound and effective banking system in India it cannot have a healthy economy.
The Banking system of India should not only be hassle free but it should be able to meet
new challenges posed by the technology and any other external and internal factors.
For the three decades Indias Banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to
the remote corners of the country. This is one of the main reasons of Indians growth
process.
Not long ago, an account holder had to wait for hours at the bank counters for getting the
draft or for withdrawing his own money. Today, he has a choice. Gone are the days when
the most effective bank transferred money from one branch to another in two days. Now it
is simple as instant messaging or dial a pizza. Money has become the order of the day.
The Bank of India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian banking system can be segregated into three distinct phases, they are
mentioned below:
Early phase from 1786 to1969 of Indian Banks
Nationalization of Indian banks and unto 1991 prior to Indian banking sector reforms.
New phase of banking system with the advent of Indian financial and banking sector
reforms after 1991.
PHASE II
Government took major steps in this Indian banking sector reforms after independence. In1955, it nationalizes imperial bank of India with the extensive banking facilities on a large
scale especially in rural and semi-urban areas. It formed state bank of India to act as a
principal agent of RBI and to handle banking transactions of the union and state
government all over the country.
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Seven banks forming subsidiary of state bank of India was nationalized in 1960.On 19 th
July, 1969, major process of nationalization was carried out it was an effort of the then
prime minister of India , Mrs. Indra Gandhi, 14 major commercial banks were nationalized.
Second phase of nationalization Indian banking sector reforms was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India undergovernment ownership.
The following are the steps taken by the government of India to regulate banking
institutions in the country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the banks of the public sector bank of India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
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NATIONALIZATION OF BANK IN INDIA
The nationalization of bank in India took place in 1969 by Mrs. Indra Gandhi, the Prime
Minister. It nationalized 14 banks then. These banks were mostly owned by businessmenand even managed by them.
Central Bank of India Bank of Maharashtra
Dena Bank Syndicate Bank
Canara Bank Indian Bank
Bank of Baroda Union Bank
Allahabad Bank United Bank of India
Uco Bank Bank of India
Before the steps of nationalization of Indian Bank, only State of India (SBI) was
nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of seven
state bank of India (formed subsidiary) took place on 19th July, 1960.
The State Bank is Indias largest commercial bank and is ranked one of the top five banks
worldwide. It serves 90 million customers through network of 9,000 branches and it
offers---either directly or through subsidiaries---a wide range of banking services.
The second phase of nationalization of India bank took place in the year 1980. Seven more
banks were nationalized with deposits over 200 crores till this year.
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CURRENT SCENARIO
The industry in India banking is in a transition phase. The public sector banks (PSBs),
which are the foundation of the Indian Banking System account for more than 75% of total
banking industry assets. Unfortunately they are burdened with excessive non-performing
assets (NPSs), massive man power and lack of modern technology.
On the other hand the private sector banks in India are witnessing immense progress. They
are leaders in internet banking, mobile banking, phone banking, ATMs. On the other hand
public sector banks are still facing the problem of unhappy employees. There has been a
decrease of 20% in the employee strength of the private sector in the wake of the Voluntary
Retirement Schemes (VRS). As far as foreign banks are concerned they are likely to
succeed in India.
PUBLIC SECTOR BANK
Among the public sector banks in India, United Bank of India is one of predecessor, in the
public sector banks, the United Bank of India Ltd., was formed in 1950 with the
amalgamation of four banks viz. Comilla Banking Corporation Ltd.(1914), Bengal central
bank ltd. (1918) , Comilla union bank ltd.(1922) and Hooghly bank ltd. (1932). Oriental
Bank of Commerce (OBC), a government of India undertaking offers domestic, NRI andcommercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun
District (UP) and Hanumanangarh district (Rajasthan) disbursing small loans. This public
sector bank India has implemented 14 point action plan for strengthening of credit delivery
to women and has designated 5 branches as specialized branches for women entrepreneurs.
The following are the list of public sector banks in India
Allahabad bank Andhra bank
Bank of Baroda Bank of India
Bank of Maharashtra Bank of India
Canara Bank Central Bank of India
Corporation Bank Dena bank
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years of patronage and constantly setting new standards in banking, ING Vysya Bank has
many credits to its account.
List of private banks in India
Bank of Punjab Development Credit Bank
Bank of Rajasthan Catholic Syrian Bank
City Union Bank Dhanalakshmi Bank
Federal Bank HDF Bank
ICICI Bank IDBI Bank
IndusInd Bank Jammu and Kashmir Bank
Karnataka Bank Laxmi Vilas Bank
South Indian Bank United Western Bank
UTI Bank ING Vysya Bank
HDFC BANK INDIA
HDFC Bank India, announced the arrival of the new generation, technology driven
commercial banks in India. HDFC Bank in India was set up in August 1994 with the
approval of Reserve Bank of India (RBI). The bank was promoted by Housing
Development Finance Corporation Ltd. (HDFC), a premier housing finance company of
India (set up in 1977).
HDFC Bank was amongst the first to receive an in-principle approval from the RBI to set
up a bank in the private sector from HDFC, in 1994 during the period of liberalization of
the banking sector in India. HDFC India was incorporated in August, 1994 in the name of
HDFC Bank Ltd. HDFC India commenced operations as a scheduled commercial bank in
January, 1995.
Our Business philosophy is based on four core values: customer focus, operationalexcellence, product leadership and people, we believe that the ultimate identity and success
of our bank will reside in the exceptional quality of our people and their extraordinary
efforts. For this reason, we are committed to hiring, developing, motivating and retaining
the best people in the industry.
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Kolkata, Chennai, Delhi, Bangalore, Hyderabad and Ahmadabad apart from HDFC
Mumbai.
HDFC BANK- BANKING ON GROWTH
HDFC Bank Ltd. (NYSE:HDB)
The average growth rate of the Indian economy over a period of 25 years since 1980-81
financial year beginning April has been about 6.0% p.a., with the growth rate averaging
9.1% p.a., during the last years.
The strengthening of economic activity in the recent years has been supported by a
persistent increase in the domestic investment rate from 22.9% of GDP in 2001-02 to
33.8%in 2005-06 coupled with more efficient use of capital. Domestic saving rate improved
from 23.5% to 32.4% of GDP during the same period. The service sector continues to be
the driver of growth with a share of around 60% in the overall GDP and contributing almost
three-fourth to overall growth. The manufacturing sector has shown good growth supported
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HDFC Bank is a private sector bank and financial services company in India. The bank
operations are broadly classified as wholesale banking services, Retail Banking Services
and Treasury Operations. In the wholesale banking segment it offers commercial and
transactional banking services, including working capital finances, trade services,
transactional services, cash management, etc. In the Retail banking segment it offers
individual customers, financial products and banking services such as ATMs, Phone
banking, Net banking and Mobile banking. In the treasury operations it deals with Foreign
Exchange and Derivatives, Local Currency Money Market and Debt Securities, and
Equities. It has 684 branches in 316 cities.
Shareholding Pattern
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The financial performing of the bank during the fiscal year 2996-07 was good as total
revenues increasing by 42.4% to Rs. 5225.8 crores from Rs. 3669.8 crores in 2005-06. The
revenue growth was driven principally by an increase in net interest income. Interest
income grew by 45.7% due to an increase in the average balance sheet size by 36.6% and an
increase in net interest margin from 4.0% to 4.3%. The increase in net interest margin was
due to better mix of deposits with a higher proportion of current accounts and an increase in
lending rates was partially offset by higher costs of deposits and costs of borrowings. The
bank increased its Benchmark Prime Lending Rate (BPLR) thrice during the year as a resultof increase in interest rates in the banking system due to tight liquidity conditions.
The other income increased by 34.9% to Rs. 1516.2 crores due to fees and commissions and
income from foreign exchange and derivatives. In 2006-07, commission income increased
by 23.7% to Rs. 1292.4 crores with the main drivers being commission from distribution of
third party mutual funds and insurance, fees on debit/credit cards and transactional
charges/fees. The bank incurred net losses on sale/revaluation of investments of Rs. 68.4
crores as a result of the sharp increase in short term yields in the debt markets in March
2007. Large portions of the non-SLR investments were bonds in which the bank had
invested in previous years for meeting priority sector lending requirements. Foreignexchange and derivatives revenues grew from Rs. 118.6 crores to Rs. 280.3 crores.
Operating expenses increased from Rs. 1691.1 crores in 2005-06 to Rs. 2420.8 crores
in 2006-07, due to significant expansion in new branch infrastructure, retail loan products
and the credit card business. The ratio of operating cost to net revenues remained more or
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Fund Exposure
Transportation 10.74%
Banks and financial institution 5.51%
Trade 4.52%
Automobiles and Auto Ancillaries 4.47%
Financing Intermediates 2.88%
Food Processing 2.33%
Engineering 2.14%
Fertilizers and Pesticides 2.11%
Retail 44.10%
Other Industries 21.20%
HDFC BANK
Mission and business strategy
Our mission id to be A world class Indian Bank, benchmarking ourselves against
international standards and best practices in terms of products offerings, technology, service
levels, risk management and audit and compliance. The objective is to build sound
customer franchises across distinct businesses so as to be a preferred provider of banking
services for target retail and wholesale customer segments, and to achieve a healthy growthin profitability, consistent with the banks risk appetite. We are committed to do this while
ensuring the highest levels of ethical standards, professional integrity, corporate governance
and regulatory compliance.
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Business strategy emphasizes the following
Increase our market share in Indias expanding banking and financial services
industry by following a disciplined growth strategy focusing on balancing qualityand volume growth while delivering high quality customer services;
Leverage our technology platform and open scalable systems to deliver more
products to more customers and to control operating costs;
Develop innovative products and services that attract our targeted customers and
address inefficiencies in the Indian financial sector;
Maintain high standards for asset quality through disciplined credit risk
management;
Continue to develop products and services that reduce our cost of funds;
Focus on healthy earnings growth with low volatility.
PRODUCT DETAILS
Accounts and Deposits:
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Savings Accounts-
- Regular saving account - Saving plus account
- Saving max account - Senior citizen account
- No frills account - Retail trust account
- Pension saving bank account - Kids advantage account
- Salary account - Family savings group.
- Payroll -Classic
- Regular - Defense salary account
- Premium
Current Accounts-
- Plus current account - Trade current account
- Premium current account - Regular current account
- Reimbursement current account - RFC-Domestic account
Fixed deposits-
- Regular fixed deposits
- Super saver account
- Sweep-in account.
Demat Account
Safe Deposit Lockers
Loans:
- Personal loans - Home loans
- New car loans - Used car loans
- Express loans - Gold loans
- Educational loans - Loan against securities
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- Loan against property - Tractor loans
- Construction equipment finance - Commercial vehicle finance
- Vehicle working capital finance - Loans against rental receivables
Cards:
Credit cards-
- Silver credit card - Gold credit card
- Womans gold credit card - Platinum plus credit card
- Corporate credit card - Business credit card
- Titanium credit card - Value plus credit card
- Health plus credit card - Visa signature credit card
Debit Cards-
- Easy shop International Debit Card
- Easy shop Gold Debit Card
- Easy shop International Business Debit Card
- Easy shop Womans Advantage Debit Card
- Easy shop NRO Debit Card
Prepaid Cards-
- Forex Plus Card
- Gift Plus Card
- Food Plus Card.
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Investment and Insurance:
- Mutual Funds - Insurance
- General & Health Insurance - Bonds
- Knowledge Centre - Equities & Derivatives
- Mudra Gold Bar
Forex Services:
- Trade Finance - Travelers cheque
- Foreign currency remittance - Foreign currency draft
- Foreign currency cheque deposits - Cash to master
Payment Services
- Net safe - Merchant services
- Prepaid refill - Bill pay
- Instapay - Direct pay
- Visa Money Transfer - Excise & Service Tax Payment
- E-monies Electronic Fund Transfer
- On-line Payment of direct tax
Access Your Bank:
- Net Banking - ATM
- One View - Phone Banking
- Insta Alerts - E-mail Statements
- Mobile Banking - Branch Network
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CUSTOMER PROFILING
Solving almost any sale and marketing challenge starts with knowing who your customer is.
Mapping Analytics can help you to find out who your best customers are and apply
geographic consumer customer profiles analysis techniques to discover where to find more
of them. Profiling is the art of detailing the customer to get a comprehensive view of his
financial, lifestyle, demographics. Profiling is the fundamental base for Relationship
Management.
Accurate profiling and segmentation of the customer is central to a banks profitability and
operational efficiency. Such profiling helps banks define increasingly financer customersegments for greater profitability.
Consumer Customer Profile
Demographics age, income, gender, ethnicity, education level etc.
Geo Demographic Clusters there are many clustering database available, and we will
help you choose the right one for your specific profiling needs. Some are industry specific,
other are general. They often include data on interests, lifestyles, purchasing behavior,
attitude and more.
Survey Data based on data available for purchase or gathering through primary research.
Businesses
SIC or NAICs standard industry classification (SIC) and North America Industry (NAIC)
codes are added to your customer data to determine type of business.
Firmographics this invented word is used by marketers to refer to a companys
characteristics, including number of employees, revenue, growth rate and even special data
such as the number of computers or spending on telecommunications.
Customers Profiling Benefits
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Once organization performs customer segmentation, they can understand who their
customers are from a demographic perspective. And they are on their way to achieving
many key benefits for their organization.
Understand Untapped Market Potential
An accurate profile of your customer allows you to analyze market areas or neighborhoods
to understand your penetration rate and market potential for your products and services.
Penetration rate and points to where market opportunity exists.
Improve Targeted Marketing
By identifying and understanding the customers in the clusters where you have the highest
penetration, you can target marketing or business activities to those who are most likely to
purchase your product. You can improve response rate and ROI by precisely marketing to
prospects with offer that will appeal specifically to them.
Choose Better Sites
Customer profiling is a key analysis necessary to project the size of the total market
opportunity, and project revenue and customer for new or planned locations. Few
companies can make successful site selection decisions without first understanding
customer profile.
Segmentation
Customer segmentation is the subdivision of market into discrete customer groups that
share similar characteristics. Customer segmentation can be a powerful means to identify
unmet customer needs. Companies that identify undeserved segments can then outperform
the competition by developing uniquely appealing products and services. Customer
segmentation is most effective when a company tailors offering to segments that are the
most profitable and serves them with distinct competitive advantages. This prioritizationcan help companies develop marketing campaigns and pricing strategies to extract
maximum value from both high and low-profit customers. A company can use
customers segmentation as the principal basic for allocating resources development,
marketing, service and delivery programs customer segmentation requires managers to:
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At the heart of any program for customer relationship management is the effective
segmentation and profiling of customers. Such profiling helps banks define increasingly
finer customer segments for greater profitability. Segmentation occupies a key position in
an institutions customer-centric strategies and sits at the hub of the customer value chain
(see fig.1). It facilitates the intelligent deployment of data that banks need to offer, market,
and sell their products.
Segmentation can also help a bank increase customer satisfaction and loyalty. Through
accurate segmentation, banks can both reduce their costs and take the advantage of
opportunities for generating extra revenue. Customer segmentation and profiling typically
involve such attributes as geographic location, number of products owned, type of product
used, age, or total bank amount. Segmentation seldom reflects the real profitability of each
customer, however, because customer data is often spread among a Varity of legacy system,
it can be hard for the bank to create a single view of their customers and extract the
information they need for accurate profitability analysis.
Customer THE Right offering for transaction
Centricity as HEAR the right from a
Corporate philosophy OF person targeted to 360 view
CRM a relation
Customer marketing ship culture.
Valuing Aggregat- customer product targeted valuing
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the Ion of segment- and marketing the
Customer Customer ation service custom
Data offered er
THE CUSTOMER VALUE CHAIN (Fig.1)
A Wide Range of Business Benefits
An accurate analysis of your current prospective customers offers many business benefits.
These include:
The ability to identify customers that have the most assets and would be the most profitable.
Identification of the most profitable products.
Enhanced cross selling and up selling of products that are most relevant o a customers life
stage and financial needs.
Improved customer service and reduced service cost.
Enhanced operational efficiency.
Customer Segmentation Strategy
A meaningful segment is a group of customers that meets three criteria:
They are identifiable by common characteristics
They are profitable
They are growing.
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MANAGED CUSTOMERS
Managed customers are the main concern of our project work. The whole analysis of our
project work revolves round the manager customer group.
10% of the retail bakings base contributes to over 60% of the customer profitability
and 56% of the liability book.
These customers therefore need to be actively managed and retained.
Loyalty Marketing commonly referred to as frequency marketing or relationship marketing,
is a long-term strategy focused on the identification, retention and growth of our best
No. of customers CPR CA AMB SA
REST
MANAGE
D
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customers by communicating to them and recognizing and rewarding them based on their
purchase.
It is a universally recognized marketing strategy being employed by more and more
businesses today than ever before. Whether organizations are trying to retain their
customers, motivate them to increase their purchase activity, or trying to establish loyalrelationship, the basic principles of loyalty marketing can help. And now, with the
introduction of preferred patron, even the smallest businesses can employ this very same
strategy without the concerns or overhead involved with those expensive, and often
unattainable, point-of-sale systems and third party marketing firms. In fact, preferred patron
was designed for small businesses in any segment of the retail industry..keeping low cost,
intuitiveness and simplicity of use as the primary objective while still providing marketing
essentials which rival any product or service on the market today.
Even in the age of increasing customer expectations and intense global competitions, the
drivers of customer loyalty remain unchanged. Some customers are still more valuable thanothers. Consumers still have two distinct drivers that influence their behavior: the rational
level, at which they compare offers and seek the greatest value; and the emotional level, at
which they are influenced by prior experience and seek to reflect their own lifestyles in their
purchase.
Empowered consumers can be longer being treated as the passive targets of one-way
marketing stimulus-response initiatives. A successful marketing initiative will result
in mutual benefits between the organization and the customer, and that is the reason
why an effective loyalty program such as preferred patron is so crucial: loyalty
campaign provide differentiated, brand-specific value, and offer a compellingcounterpoint to price-only marketing.
A fundamental prerequisite of a loyalty program is the ability to capture in
individuals transactional data and filter that data through a rule engine that assigns
both points and interventions, with storage, reporting, and retrieval of all member
and program information from a centralized database. Without sophisticated
technology as found in preferred patron, organization are otherwise confined to a
punch card or a stamp program which simply wont work in todays internet bound
world.
Why race a customer?
Dedicated one point contact in the
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Retention and increase in CPR
What are the benefits?
Today more than ever, organizations have likely recognized the value of their existing
customer base, and among that base organization have come to understand that certain
customers are more profitable than others. Preferred patron provides organizations the tool
necessary to know who their best customers are. Once organizations can formulate service
and/or product enhancement strategies to yield greater profitability.
With the preferred patron the idea is to leverage past behaviors to ascertain the degrees of
profitability organizations customers represent in the future. Then organization can focus
Dee ens relationshi s
CPR per
Customer
Preferred
32.3k
Classic-
6k
Acquire
family
Pitch program
Benefits
Cross sell
Pitch program
Benefits
Why
Race
a
custo
mer
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their limited, and hence valuable, marketing resources on those customers with the higher
potential for future profitability.
Preferred patron provides a proliferation of benefits enabling organizations to effectively
identify the market to their bets customers. In essence, preferred patron is the vehicle to
establishing a well designed and executed loyalty program, which can:
Provide a solid understanding of what organizations patrons desire,
Influence and direct the behavior or organizations patrons,
Establish organizations business with competitive advantage,
Allow organizations to focus their limited, and hence valuable marketing resources
on those patrons with the greatest potential for return,
Provide organization with visibility to their patrons spending behaviors and
Yield long-term customer relationships leading to more significant profits.
Moreover 20% preferred customers account for 80% of profitability to an
organization. It is in accordance with the pareto law (the law of the vital few and
the trivial many). The pareto law, in the generalized form, stated that 80% of the
objectives- or more general the effects- are achieved with 20% of the means- or
more generally the causes or the agents. Subsequently, it takes 80% of the means to
achieve the remaining 20% of the objectives.
PERFERRED BANKING IN HDFC BANK
Preferred banking is the benchmark in relationship banking, offering an enhance level of
service to the most demanding high net worth customers for their wealth management and
business requirements. Philosophy of banking is to maximize financial opportunities for
high net worth customers and to transform their routine banking into a memorable and
profitable experience.
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Preferred banking practices the philosophy of identifying, inspiring and maximizing
financial opportunities for clients through a seamless banking and wealth management
experience delivered through the team of dedicated relationship managers, product
specialists and service managers. Preferred banking clients enjoy preferential treatment with
waivers and better pricing on selected products and services.
Dedicated relationship manager with a vast, multi-faceted experience in financial services,
work with a team of certified and experienced product specialists from domains like
investments, insurance, banking, trade and foreign exchange, loan and direct equity to
provide customized solutions for you. In, addition a team of dedicated service managers
ensure all your transactions and service requirements are catered to the flawlessly.
Preferred banking is the finest standard in relationship banking for the most demanding
businesses and high net worth individuals. It offers an enhance level of services and
products for wealth management and business banking requirements.
Personalized Attention
There is a dedicated personal relationship manager who is just a phone call away. These
experience and professionally trained individuals will cater to all banking and financial
services need. So, whether it is expert advice on mutual funds or the urgency or having a
demand draft issued, just ask and trust the relationship manager to get the job done
promptly and efficiently.
Comprehensive Wealth Management
It is believed that the time is true wealth.
They have designed convenient end-to-end wealth management solution that range from tax
saving investment avenues, buying and selling shares to convenient tax payment options, all
under the same roof!
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In any relation small gestures can speak volumes. This is one such service, one small
gesture that is sure to make customers feel special.
HDFC Securities Trading Account
There is e-booking through HDFC Securities trading account.
There is special pricing for this account, offered exclusively to preferred customers.
Credit Card
Titanium card-quiet simply the most exclusive Credit Card one could ask for. The benefitsof this card are exclusively free for preferred customers.
HDFC Bank international Gold Credit Card-free for preferred customers. Along with this
customer are also entitled to the value added My City Benefits card (available in selected
cities) that comes absolutely free.
Loan at Preferential Rates
HDFC Bank preferred customers are entitled to enjoy reduced pricing on selected loan
products.
EXCLUSIVE PRIVILEGES
Zero Balance Accounts
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As a part of preferred programme, customers need not maintain the minimum average
quarterly balance stipulated on their saving and current accounts.
Combined Monthly Statements
Preferred customers receive consolidated monthly statements detailing all transactions madeon customers saving, current, fixed deposit accounts, where customers are first holders.
Free Payable At Par Cheque Book
Customers can request for a free payable at par cheque book on their saving or current
account. These cheques can be honored at any HDFC Bank branch across the country,
doing away with the need of Demand Draft in more than 200 cities.
Enhanced limits on Preferred Easy Shop Debit Card
Our preferred customers can avail the convenience of the HDFC Bank Easy ShopInternational Gold Debit Card for free. The card offers features like petrol surcharge waiver
and cash back and whats more only the HDFC Bank Debit Card comes with zero card
liability! Customers benefits from a higher spending limit of Rs. 50,000/- a day.
As well as enhanced cash withdrawal limit of Rs. 25,000/- a day at ATMs, on this value
added Debit Card.
50% discount on Locker Charges
Preferential Forex Rates
Customers can earn the benefits of an improvement of 8 paisa over a days card rate,
helping customers save money when they are buying currency or earn money when they are
selling currency.
Free Standing Instruction
Customers can set up a convenient standing instruction on their accounts is free and
payment is triggered automatically.
Cheque Pick-up Facility
HDFC Bank arranges to pick up cheque and other instructions, excluding cash, from
customers house.
Free Transaction On Non-HDFC Bank ATMs
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No cheque are levied for balance enquiry and cash withdrawal transactions if customers
transact on non-HDFC Bank ATMs (visa/Master card/Euro net/State Bank of India/Andhra
Bank/Jammu and Kashmir Bank/Punjab National Bank)across India.
TYPES OF MANAGED CUSTOMERS IN HDFC BANK
Imperia Premium Banking in HDFC Bank:
BENEFITS:
Personalized attention
Imperia client relationship manager
Client relationship manager effectively takes care of the financial needs of customers
whether it is expert investment advice, or having a demand draft issue.
Investment advisory services
Invest wise
HDFC Bank Investment Advisory Services not only protect customers wealth, but also
advice them on how to make it grow. Range of services included:
1. Client profiling
2. Portfolio structuring and ongoing portfolio reviews.
3. Financial planning and asset allocation.
4. Research reports.
Private banking services
This programme takes the customer to the realm of customized and comprehensive
investment and advice across diverse asset categories, helping customer make the choice
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Sweep-in facility on your saving accounts.
Waiver on a host of service charges.
Anytime, anywhere banking
HDFC Bank Branch network
HDFC Branch ATM network
Free e-age Banking.
Other Privileges
HDFC Bank looks forward to enjoy its customers company at exclusive events, bearing in
mind their personal preferences on cultural activities, and customer can expect to keep
abreast of latest trends in fashion, traveleven the world of finance through our monthly
magazines that offers them all this and much more.
CLASSIC BANKING IN HDFC BANK:
EXCLUSIVE BENEFITS
Easy Shop Debit Card
As a classic customer, one can avail an Easy Shop Debit Card for free without any annual
charge this entitles you for an enhanced limit of Rs. 50,000/- per day on ATM withdrawal
and Rs. 50,000/- when one use the card at a merchant establishment.
Credit Card
Platinum plus card, which offers them exclusive travel and preferential benefits. The
platinum plus, which is priced at Rs.3999/-, comes to classic customer only at Rs.999/-.
Alternatively, customer can avail of a free gold Debit Card with a completely free Add-
on cards will be charged at Rs.250/- only.
Lockers facility
Customers can avail of a locker at any branch in the country at a 50% waiver on annual
locker rental rates.
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HDFC securities e-Banking Account
Enjoy the convenience of e-Banking through the HDFC Securities trading account at
preferential rates.
Monthly Statement
As an HDFC Bank classic customer, one will receive a statement every month. Customers
monthly statement will provide customer with details of all CASA and FD accounts, where
customers are the principal account holder.
Insta Alert
Customers can get transaction alerts through an SMS sent to the customers mobile number
(which need to be registered with bank), or through an E-mail sent to the customers E-mail
ID (which, again, need to be registered with bank). In addition, on registering for the Insta
Alert facility, customer will also be kept informed each time customer use their Debit Card
at a merchant establishment.
Free transaction on HDFC Bank ATMs
If the customer transact on Non-HDFC bank ATMs, the charge for balance enquiry andcash withdrawal will not be waived. Customers can avail if this benefit on transactions on
say Non-HDFC bank (visa/Master Card/Euro Net/SBI/J&K bank) across the country.
Loan At Special Rates
HDFC Bank classic customers are entitled to enjoy reduced pricing on select loan products.
Forex
Customers currency conversion transaction can earn the benefits of an improvement of 5
paisa over the days card rate, helping customers save money when they are buying
currency or earn money when they are selling currency-either way..customer win!
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Delhi (inclusive NCR, Gurgoan, Ghaziabad, Faridabad and
Noida)
Hyderabad (inclusive of Secunderabad)
Kolkata
Mumbai
Pune
Customers are eligible for the preferred programme if they:
Hold at least one saving or current account, sole or joint account, with HDFC Bank.
Maintain a minimum average Monthly balance of Rs. 15 lakhs across all their
accounts (saving, current and fixed deposits).OR
Maintain an average Quarterly balance of Rs. 2 lakhs in their saving account. OR
Maintain an average Quarterly balance of Rs. 5 lakhs in their current account.
The requisite balance can be maintained over their own accounts and over those of
their immediate family members.
In other cities, customers are eligible for the preferred programme if they:
Hold at least one saving or current account, sole or joint account, with HDFC Bank.
Maintain a minimum average Monthly balance of Rs. 5 lakhs across all their
accounts (saving, current and fixed deposits). OR
Maintain an average Quarterly balance of Rs. 2 lakhs in their saving account. OR
Maintain an average Quarterly balance of Rs. 5 lakhs in their current account.
The requisite balance can be maintained over their own accounts and over those of their
immediate family members.
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HDFC BANK LIMITED
Sector: Banks-Private
Board of Directors
Managing Director Aditya Puri
Director Arvind Pande
Director Ashim Samanta
Director (up to 17-10-06) Bobby Parikh
Director C M Vasudev
Director Gautum Divan
Executive Director Harish Engineer
Chairman Jagdish Kapoor
Director Keki M Mistry
Director Pandit Palande
Executive Director Paresh Sukthankar
Director(up to 20-03-06) Ranjan Kapoor
Director Renu Karnad
Director (up to 14-03-07) Venkat Rao Gadwal
Director Vineet Jain
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RESEARCH METHODOLGY
Primary Objective:
Assessment of Consumer Satisfaction towards Banking Sector with special reference to
HDFC Bank. This was done by interacting with people through the medium of
Questionnaires and Direct interviews being taken in some cases. The satisfaction greatly
depends on the quality of service, the interests being provided on various banking facilities
and the payback period for taking any sort of loan. One of the important factors affecting
customer satisfaction is the presence of on-line banking facility being incorporated by the
bank in its very basic functioning infrastructure.
The project helped in developing an insight about the Actual level of satisfaction and the
Expected level of satisfaction. The various grievances that came forwarded during the
survey and the various things which the customers wanted the bank to incorporate in its
structure is attached in the report afterwards in the form of Recommendations. Through the
project, the competitive strategies being followed by other banks were also analyzed.
Techniques:
The problem definition can be said to be the quite essential part of the research process; as itdetermines precisely, what the managerial problem is and the type of information that theresearch can generate to help the problem before conducting the field work. It is better todecide upon the method/technique of data collection. Generally, there are two techniques ofdata collection:1. Census technique2. Sample technique or Convenient sampling
A census is a complete enumeration of each and every unit of population where as in asample only a part of the universe is studied and conclusion about the entire universe is
drawn about that basis. The census method is costlier and more time consuming as com-pared to sampling method but the result are near representatives than sample method.The availability of resources, time factor degree of accuracy desire and scope of theproblem enable us to apply sample technique.
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DATA COLLECTION
The objectives of the project are such that both the primary and secondary data is required
to achieve them. So both primary and secondary data was used for the project. The mode of
collecting primary data is questionnaire mode and sources of secondary data are various
magazines, books, newspapers & websites etc.
1. Primary Data:
The primary data was collected to measure the customer satisfaction regarding HDFC bank.
The primary data was collected by means of direct personal interview method through
structured questionnaire and analysis was done on the basis of response received from the
customers. The questionnaire has been designed in such a manner that the customers
satisfaction level can be measured and consumer can enter his response easily
2. Secondary Data:
The purpose of collecting secondary data was to achieve the objective of studying the
recent trends and development taking place in customer relationship management.
Sampling Design:
It is very difficult to collect information from every member of a population. As time and
costs are the major limitations that the researcher faces.
Definition Of Population:
Our population consisted of the preferred and classic customers of the HDFC Bank. Thereason for choosing the classic and preferred customers as our population was that the CRM
services are usually meant for such classes only and hence the normal customers were not
considered.
Sampling Method:
Our sample consisted of 100 personal interviews. We stratified our sample into two; i.e. we
choose 50 preferred and 50 classic customers. We structured our personal interviews on the
basis of a sample random sample.
Sample size:
Because of the various constraints imposed on our project work, especially time and cost,
our sample size was limited to 100. This also enabled us to obtain an equal number of
respondents in each stratum.
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Sampling plan:
The research was conducted mainly at the branch and further we met certain customers personally at
their offices after getting the proper references.
Questionnaire design:
We designed our questionnaire based on the information acquired from our background
research. We also used our own personal judgment when determining which type of
questions might be the most applicable to the information we were trying to obtain. The
questionnaire consisted of 14 questions with options against each and one open ended
question; at the end, for suggestion. The scale used for questionnaire is given in Appendix
A.
In designing the format of our questionnaires, we used the standard procedure to formulate
a questionnaire.
Collection procedure:
Personal interviews were conducted using individual questionnaire for each respondent.
The responses were recorded directly onto each questionnaire.
Tools of analysis:
After collecting the data has been analyzed through various statistical tools and techniques.
The unwisely data should necessarily be condensed into few manageable groups and tables
for further analysis. Thus it helps to classify the raw data into some purposeful and usable
categories. The tools used are tables and pie charts.
Limitations of the Study
It is said,Nothing is perfect and there would be few shortcomings in this project also. Sincere
efforts have been made to eliminate discrepancies as far as possible but few would have remained
due to limitations of the study.
Time seemed to be our most limited resource. To conduct a comprehensive research project in a two
month period is difficult.
The absence of appropriate funding limited the extent of our study. With addition-al financial
resources, the scope of our study could have been enlarged, resulting in a more representative study.
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Interviewer bias could not be avoided as in case of many surveys open ended questions involve the
use of probing techniques that increase interviewer bias. However, as our study did not use many
open ended questions, the extent of the bias was reduced.
Some of the respondents gave ambiguous replies for certain questions or omit-ed the responses to
some of them. The interpretation of such responses become-s difficult and could generate wrongresults.
CUSTOMER
RELATIONSHIP
MANAGEMENT
BUILDING
SUCCESSFUL
RELATIONSHIPS
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CUSTOMER RELATIONSHIP
MANAGEMENT
Customer Relationship Management (CRM) is fundamental to building a customer-centric
organization. CRM system links together the customer data into single and logical customer
repository. CRM in banking is a key element of differentiation that allows a bank to develop its
customer base and sales capacity. The goal of CRM is to manage all aspects of customer interactions
in a manner that enables banks to maximize profitability from every customer. Increasing
competition, deregulation and the internet have all contributed to the increase in to entry and exit for
the customers, making it easier to switch banks or brokers without feeling the pinch in the wallet.
Retaining customers is a major concern for banking institutions which underscores the importance of
CRM. Customers, faced with an increased array of banking products and the services, are expecting
more from banks in terms of customized offerings, attractive returns, ease of access and transparencyin dealings. By using knowledge of the customer, banks can turn customer relation-ships across a
broad spectrum of touch point branches, kiosks, ATMs, internet, electronic banking, smart cards,
call centers and phone banking. The full integration of these systems, their associated business
processes, and the methods for which information is extracted and used, forms the basis for CRM.
Customer relationship management (CRM) is a customer-centric business strategy with the goal of
maximizing profitability, revenue and customer satisfaction. There are many aspects of CRM which
are mistakenly thought to be capable of being implemented in isolation from each other.
From the outside of the organization, a customer experiences the business as one entity operating
over extended periods of time. Thus piecemeal CRM implementation can come across to the
customer as unsynchronized where employees and web sites and services are acting independently of
one another, yet together represent a common entity. CRM is the philosophy, policy and
coordinating strategy connecting different players within an organization so as to coordinate their
efforts in creating an overall valuable series of experiences, products and services for the customer.
The different players within the organization are in identifiable groups:
1. Customer Facing Operations
2. Internal Collaborative Functional Operations
3. External Collaborative Functions
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Management decisions, e.g. financial forecasting and customer profitability analysis
Prediction of the probability of customer defection (churn analysis)
Analysis CRM generally makes heavy use of data mining.
COLLABORATIVE CRM:
The function of the customer interaction system or collaborative customer relationship
management is to coordinate the multichannel service and support given to the customer by
providing the infrastructure for responsive and effective support to customer issues, questions,
complains etc.
Collaborative CRM aims to get various departments within a business, such as sales, technical
support and marketing, to share the useful information that they collect from interactions withcustomers. Feedback from a technical support center, for example, could be used to inform
marketing staffers about specific services and features requested by customers. Collaborative
CRMs ultimate goal is to use information collected from all departments to improve the quality
of customer service.
Four-step framework for one-to-one marketing that can be adapted to CRM:
Given by Don Peppers and Martha Rogers
1. Attracting, Retaining and Growing Customers
2. Building Loyalty
3. Reducing Customer Defection
4. Forming Strong Customer Bonds.
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CUSTOMER
SATISFACTION
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CUSTOMER SATISFACTION
Conceptual framework:
Relationship
Antecedents
Affective
Responses
Behavioral
Intentions
Service quality
Customer
knowled e
Relationship
managers
Satisfaction
Trust
Positive World-of-
mouth intentions
Purchase
Intentions
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global definition of service quality might be more appropriate since its inherent dimensions
are likely to be dependent on service settings (Brown, Churchill and Peter, 1933, Carman,
1990). Zeithaml (1988), for instance, defines service quality as the consumers judgement
about the overall excellence or superiority of a service. Likewise, Anderson and Fornell
(1994) refer to service quality as a global evaluation of a firms service delivery system. As
a boundary spanner, the relationship manager plays a critical role in the service delivery
process. They are normally the primary, if not only, contact between the organization and
its customers (Sharma and Sarel, 1995). Each of these customer contacts has the potential
of positively or negatively impacting the customers view of the service provided by the
sales persons company (Shepherd, 1999).
SATISFACTION:
Although the research literature on satisfaction has swelled enormously over the past three
decades, a universally agreed theoretical or operational definition still eludes marketing
academics. A widely used paradigm of customer satisfaction is the disconfirmation ofexpectation theory (Oliver, 1980). It defines satisfaction as a mental comparison of the
quality that a customer expected to receive from an exchange and the level of quality, the
customer perceives actually receiving from the exchange. Even if this theory is commonly
employed, for example, that a man is going to dinner with his mother-in-law. If he expects
the event to be boring, and that it is indeed tiresome, the man is most likely to be
unsatisfied (even if his expectation were met). Like service quality, satisfaction was also
attributed all inclusive definition. For example, Crosby, Evans, and Cowles (1990) refer to
customer satisfaction with the sales person reflects as an emotional state that occurs in
response to an evaluation of the interaction experience that the customer has with the sales
person. Despite the obvious importance of customer satisfaction for most business today,
Szymanski and Henard (2001) observed in their meta-analysis of 50 relevant papers that
few students have investigated the outcomes of satisfaction and only a few outcomes of
satisfaction have been investigated in these students.
TRUST:
Trust is generally thought to be a key determinant of the quality of buyer-seller
relationships (Swan, Bowers, and Richardson, 1990). Morgan and Hunt (1994)
conceptualize trust as existing when one party has confidence in an exchange partners
reliability and integrity. Over the years, many researchers uncovered that trust is positivelyrelated to several variables in consumer research. For example, trust was found to be
significantly correlated to cooperation (Morgan and Hunt, 1994), relationship commitment
(Achrol, 1991; Morgan, 1994), positive word-of-mouth intentions (Bergeron, Ricard,
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and Perrien, 2003) future interactions (Crosby, Evans and Cowles, 1990; Ramsey and
Sohi, 1997), and purchase intentions (Pilling and Eroglu, 1994).
POSITIVE WORD-OF-MOUTH INTENTIONS
Word-of-mouth (WOM) is probably the oldest mechanism by which opinions on products,
brands, and services are developed, expressed, and spread (Lau & Ng, 2001). File, judd,
and Prince (1992) define WOM as recommending the firm and the service to others.
Specially, Anderson (1998) refers to positive WOM as relating pleasant, vivid, or novel
experiences, recommendations to others, and even conspicuous display. Numerous
researches reinforced the contention that positive WOM is a cherished outcome in
marketing. In 1995, Katz and Lazarsfeld found positive WOM seven times more effective
than newspaper and magazine advertising, four times more effective than personal selling,
and twice as effective as radio advertising in influence consumers to switch brands. In
1983, Morin uncovered that referrals from others accounted for three times as many
purchases as did advertising when consumers were asked what factors influenced their
purchases of 60 different products.
PURCHASE INTENTIONS
Purchase intentions refer to the degree of perceptual conviction of a customer to repurchase
a particular product (or service) or to repurchase any product (or service) at a particular
organization. The implicit assumption made by those who gather and analyze consumer
intentions data is that they will reflect future sales behaviors. Researches in socialpsychology suggests that intentions are the best predictor of an individuals behavior
because they allow each individual to independently incorporate all relevant factors that
may influence the actual behavior. Armstrong, Morwitz, and Kumar (2000) compared
buying intentions with other sales forecasting tools. They found that purchase intentions
represent an accurate measure of future sales and that it provides better forecasts than an
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extrapolation of past sales trends. The benefits of maintaining a base of long -term
customers are widely recognized by marketers. Given than the cost of retaining existing
customers is less expensive than prospecting for a new customer (Spring, Harrell, and
Mackoy, 1995), purchase intention is a very important consideration for financial
institutions.
OBJECTIVES OF THE STUDY:
The primary objective of our study is to analyze the efficiency and effectiveness of the
customer relationship management services provided by the HDFC Bank in attaining
customer satisfaction.
The main objectives are:
To analyze the CRM services of HDFC bank.
To know whether customers are aware of the classes of customers in HDFC
bank.
To know whether customers are aware of the customer class to which they
belong.
To check which they are availing being in a managed customer group.
To check the satisfaction level of the preferred and classic customers
regarding CRM services.
To analyze customers repurchase intentions.
To analyze customers word-of-mouth intentions.
RELATIONSHIP MANAGEMENT TOOLS
1. Relationship file
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Relationship file is a RM tool which is needed to be maintained for each group
raced to the preferred portfolio.
If we RM are to run an effective preferred programme. It is imperative those we:
Know your customer
Understand the customers wallet and requirements.
Maintain regular and effective contact with them
Set expectations/target at a relationship level, so we know how to focus our efforts.
Aggressively monitor/track RMs.
These are no substitute for these relationship files and this discipline has to be
inculcated without expectation.
Each RF is divided into 3 sections/
Relationship details
Contact history
Correspondence/miscellaneous
RELATIONSHIP FILE- CONTENTS
Monthly contact plan
At beginning of each month, the RM/PB needs to print out the list of the entire group IDs in
his/her portfolio. RMs/PBs then need to make a contact plan (monthly contact plan) such
that all the groups are contacted at least once during the month.
A typical RF consists of the following
1. Program entry form
Copy of the programme entry form to be filled in relationship file at the time of
sending the racing request to CPU.
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2. Individual/corporate profile sheet
RMs have to fill this sheet once at the time of racing the client. This sheet is to be
used as an addendum to the CRA, and should be modified whenever there is any
change/ new details added to the customers profile.
3. Relationship wallet profile
This sheet captures the details of the customers relationship with other banks.
This
needs to be filled and updated on an ongoing basis i.e., as and when RM
obtains
details on the customers relationship with other banks.
4. Customers relationship Analyzer (CRA) Individual/Non Individual
This sheet has to be filled in once for each client (Primary ID in the
relationship) and pasted on the inside of the file cover. As and when the customers
holding/ Relationship with us changes, can be updated/ modified suitably or
replaced with a new sheet.
5. Electronic Monthly Activity Review Sheet (EMARS)
The EMARS is to be used by RM and the BM to record progress and actionable on each
relationship each month. The BM with the RM has to review the CRA, and basis the
review determines actionable on the relationship. This is not one time activity the BM
needs to do a daily review with each RM for a set of customers. e.g., if the
RM has 150 groups in his/her portfolio, the BM should ensure that all 150 groups
are reviewed and actionable set during the month for each group.
At the time of review each month, the BM should check the CRA and previous EMARS,
Study achievement against actionable, and determine future actionable on the
relationship with the RM.
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expectedFrom
relationshipOver currentfinancial year
Cross sellingachievements:Sold duringcurrent year
Relationshipwallet profile
Details of theother bankrelationship
ongoing BM/CH Relationshipwallet profile
Relationship
details
Printout of the
relationshipdetails screen inCCM
Monthly BM/CH CCM
Product Holdingdetails
Printout of theproducts holdingscreen in CCM
Monthly BM/CH CCM
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FINDINGS
AND
ANALYSIS PART
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Questions with analysis and interpretation
A questionnaire was used as a primary source of data collection whose analysis is given
below:
Q1. How do you come to know about HDFC?
a) Advertising
b) Friends
c) Relatives
d) Other source
INTERPRETATION
The HDFC Bank is doing well in terms of advertising.
Needs to focus on good relations with customers so that good word mouth is spread as we
see the number of references is too less.
42.42%
18.18%
36.36%
3.04%
Advertis ingFriendsOther Sources
Relatives
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Q2. Name the bank which comes in your mind first and why?
.....
.....
INTERPRETATION
Response rate of the factors like Brand Image, Brand Awareness, Sentiments, CSR(Corporate Social Responsibility) is very low for HDFC as compared to its major
competitor.
0
5
10
15
20
25
30
J & K SBI HDFC PNB ICICI
27
0
4
1 1
26
4
7
21
14
3
10
1 1
12
0 0 0 0
No. of Responses
Name of Banks
Sentiments
Brand Awareness
Brand Image
CSR
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Q3. Rank the HDFC on the following features:
a) Products provided:
i) like very much ii) neutral iii) dislike some what
b) Efficiency :
i) above average ii) average iii) below average
62.13%
7.57%
30.30%Like very muchDislike some whatNeutral
66.66%
6.07%
27.27%
AverageBelow averageAbove average
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INTERPRETATION
Most of the people are moderately satisfied.
Q5. HDFC is a good bank for:
a) Professionalism
b) Responsiveness
c) Relation building
d) Understanding customer
52%
28%
15%
5%
0%
10%
20%
30%
40%
50%
60%
o.oesponses
Professionalism
Responsiveness
Relation building
Understanding customer
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INTERPRETATION
Most of the people find HDFC Banks good in terms of professionalism.
Q6. Have you experienced service failure of the HDFC bank?
a) Always
b) Rarely
c) Never
72.72%
24.24%
3.04%
Never
Rarely
Always
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INTERPRETATION
Most of the employees are moderately responsible when the customers approach them.
Q8. For how much time you are in relation with HDFC?
a) Days
b) Months
c) Years
2%
68%
30%
Days
Months
Years
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INTERPRETATION
Maximum number of accounts i.e. maximum market share is holded by J&K Bank.
Network is the biggest extra facility provided by the J&K Bank.
Q10. When you dont have the use of this application, what impact does this have on
your business?
a) High effect
b) Moderate effect
c) Least effect
80%
1%
11%
3% 2% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
MarketShare
Name of Banks
J & K
ICICI
SBI
PNB
YB
CB
11%
48%
41%High effect
Moderate effec t
Least effect
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INTERPRETATION
Maximum customers are moderately effected i.e. maximum customers have a moderate
effect on their business due to HDFC Bank.
Q11. How many transactions have you done in your account in the last month?
a) 2 to 5
b) 5 to 10
c) 10 to 25
d) more
56%
33%
11%
0%0%
10%
20%
30%
40%
50%
60%
%ageofTransaction
2 to 5
5 to 10
10 to 25
More
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INTERPRETATION
Market impact i.e. turmoil and recession effected more on transactions.
Q13. Are availing any other service from HDFC Bank?
a) Yes b) No
If yes please mention (e.g. SB, FD, MF, INS, etc. or in relation)
.....
..
.....
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a)
b)
INTERPRETATION
INTERPRETATION
Most of the customers having current account, dont avail any other services of the HDFC
Bank and those who avail any other services are availing mostly saving accounts.
Q14. How likely will you recommend our product to your friend or colleague?
a) Highly
b) Moderately
c) Low
44%
56%
0%
10%
20%
30%
40%
50%
60%
%ageofResponses
Yes
No
83%
10%3%
4%
Saving Account
Current Account
Insurance
Fixed Deposit
11%
82%
7%
Highly
Moderate
Low
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INTERPRETATION
Maximum customers are moderately ready to recommend the products to others.
FINDINGS
CUSTOMER SATISFACTION :
Least effort put on relationship building which ultimately led to bad word of mouth.
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Biggest limitation is the non-availability of CC & OD and less number of Branches
and ATMs only single branch in South Kashmir and single ATM.
High charges, which generally the people of the Valley are not used to.
Customer services are good and branches are available throughout India that leads to
good accessibility outside J&K.
Products provided are costly as compared to the other competitive banks in the
Valley.
Market share of HDFC is very less in Kashmir, reason being less awareness among
people especially rural areas.
The business model of the HDFC Bank is having an edge over other main
competitors in the Valley.
Application of CHI-SQUARE test to the observed data:
(Q No. 1)
Computation of :
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APPENDIX
W e u n d e r s t a n d y o u r w o r l dW e u n d e r s t a n d y o u r w o r l d
Date:-.
APPENDIX A
Questionnaire
The questionnaire is designed to assess the satisfaction level of the customers for the
services provide to them by HDFC Bank. The questionnaire contains 14 questions
with options against each. The customer has to tick mark the most appropriate option
nd give reasons wherever needed.
Q1. How do you come to know about HDFC?
a) Advertising b) Friends c) Relatives d) Other source
Q2. Name the bank which comes in your mind first and why?
.bank, because of its
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a) Sentiments b) Brand Awareness c)Brand Image d) CSR
Q3. Rank the HDFC on the following features:
a) Products provided:
I) like very much ii) neutral iii) dislike some what
b) Efficiency:
I) above average ii) average iii) below average
c) Satisfy of funds:
I) excellent ii) good iii) average IV) poor
Q4. Rate your level of satisfaction with HDFC:
a) Highly satisfied b) Satisfied c) Dissatisfied
Q5. HDFC is a good bank for:
a) Professionalism b) Responsiveness
c) Relation building d) Understanding customer
Q6. Have you experienced service failure of the HDFC bank?
a) Always b) Rarely c)Never
Q7. When you approach to the bank, they are?