A Study on Customer Relationship Management Practices in ... · Public Sector Banks Private Sector...

A Study on Customer Relationship Management Practices in

Banking Sector- With Special Reference to Salem District, Tamil

Nadu, India

Jayakumar A.

Periyar University, salem-11

[email protected]

Sathiya N.

Department of Commerce, Periyar University, Salem-11

Abstract

Banks play a vital role in the socio-economic development of our country. Banks offer several

facilities to enhance the standard of living of our citizens. In the past, owing to lack of

information and proper guidance, the general public could not avail the full benefits from the

banking industries to improve their standard of living. It is now undeniable that the face of

the Indian consumer is changing. This is reflected in the change in the income pattern of the

urban household. The direct fallout of such a change will be the consumption patterns and

hence, the banking habits of Indians, which will now be skewed towards retail-products. At

the same time, India compares pretty poorly with the other economies of the world that are

now becoming comparable in terms of spending patterns with the opening up of our

economy.

Customer service management is a key component of business today. The concept is very

crucial as it incorporates customer, customer service, customer satisfaction, customer value,

customer loyalty, customer retention, etc. In one word, it is linked to Customer Relationship

Management (CRM) and Customer Experience Management (CEM). So far as jargons are

concerned, more or less relationship Marketing, CRM and customer service management are

interchangeably used. Relationship Marketing attracts maintains and enhances customer

relationship

Key words: Customer Knowledge Management, CRM, Customer Service Management

Introduction

Relationship building with customers is now accepted as over-riding goal of marketing and of

the business as a whole. In service industries, the goal is especially emphasized since a repeat

customer is believed to cost merely a fraction of what needs to be spent in servicing a new

customer is service transaction. It is believed that relationships flourish when marketers play

the book, meet customers‟ core expectations and exceed in respect of other features of their

total offering. Service firms have been the pioneers in adopting the practice of Customer

Relationship Management practices.

Indian banking industry has witnessed rapid development in recent past with the initiation of

financial sector reforms. The thrust of financial sector reforms was to improve efficiency,

competitiveness and productivity of the financial system. The entry of new generation private

sector banks which provided technology aided services like Internet banking, Mobile

banking, Inter Branch network, etc., has electrified the banking environment in India and has

added a new dimensions to automation in Indian banking.

Customer Relationship Management is a vital factor to improve the performance of the

banks. Most of the banks in India are now turning to CRM as they are increasingly realizing

that the cost of acquiring new customers is for higher than the cost of retaining existing

customers. This quest has led to the implementation of CRM in banks. The concept of CRM

is in the initial stage of implementation in banks, as getting the CRM philosophy work in a

bank is quite complex as well as a challenging task for, its implementation is based on certain

key principles, namely,

The banks must realize that all customers are not equal;

Customer profitability varies from person to person;

Not all customers are evenly desirable for the banks;

The banks must differentiate their customers based on the „Value Criteria‟;

Value is the profit that the customer adds to the bank account; and

A more profitable customer is a „High Value‟ customer and a less profitable customer is a

„Low Value‟ customer.

Changing perception of customer

The perception of a customer has drastically changed. Peter Drucker said twenty-five years

ago, that the purpose of a business wads to attract and retain a customer. There has been a

phenomenal change and paradigm shift towards customer focus during the past five decades

in the Indian context,

1961-1970 Servicing the Customer,

1971-1980 Satisfying the Customer,

1981-1990 Pleasing the Customer,

1991-2000 Delighting the Customer,

2001 and beyond Relating the Customer.

Today, the customer relationship between the banker and customer has come under the sharp

focus both the customers‟ ends.

Banks‟ CRM system must capture customers‟ taste, preference, behaviour, living style, age,

education, cultural background, physical and psychological characteristics, sensitivity etc,

while differentiating customers by the value criteria into low and high value customers. Once

the banks differentiate their customers, vis-à-vis the profitability and their other trait, it

becomes easy for the banks to customize their service to maximize the overall value of their

customers‟ portfolio.

The concept of CRM needs to make its impact in the banking scenario, particularly in the

nationalized banks, the state banks groups and the private sector banks which constitute the

core of the banking system in India. The component of CRM already exists but needs to be

put together like the pieces of a puzzle. The pieces to be properly aligned are people,

processes, information technology and leadership. This connectivity has to be done by the

management, which can be achieved by them by practice over a period of time.

Banks also need to identify customers and products that would be most profitable and target

customers with products that are appropriate to their needs and service the customers with

greater cost efficiency. Banks also need to find out the avenues for increased customer

satisfaction, which leads to increased customer loyalty.

The present study is focused on the following two categories of banks viz,

Public Sector Banks

Private Sector Banks

Objectives of the study

1. To identify various banking services offered by public and private sector bank to

consolidate their CRM strategies.

2. To study the customers perception on factors influencing Customer Relationship

Management in banking industry.

3. To classify the customers opinion on initial strategies, maintenance strategies,

technology, service satisfaction and impact of CRM.

4. To ascertain the perception of bank executives on various aspects of CRM in their

respective banks.

5. To construct and empirical model to ascertain the effectiveness of CRM in public and

private sector banks.

Methodology

Research Design

The research design is empirical in nature since the study is conducted by using both

analytical and diagnostic type of research. The study is conducted in two stages format, with

a preliminary pilot study followed by the main study. The major part of the study is based on

primary data.

Study Area

The Salem district has been chosen for the purpose of study because of the following reasons

The Salem district is one of the industrialist areas and most of the transactions through the

banks.

Salem district is the fourth place of the corporation in Tamil Nadu

Almost every bank of the state has multiple branches in the city.

Foreign banks are also interested in establishing their branches in the city.

The financial literacy of people of Salem is conducive for the purpose of study.

The banking habits of the residents of the city are quite similar to that of the people placed in

the rest of the country.

Hence, it is considered highly appropriate to conduct the study in the Salem district.

Sampling Technique

Convenient Sampling Method is adopted to collect the primary data. The respondents for the

purpose of the study are selected systematically.

Sample

The following criterion is adopted to collect responses from the customers and the bankers.

At the first instance, the total numbers of Public Sector Banks and Private Sector Banks in the

Salem district have been taken into consideration to decide about the number of banks for the

purpose of study in each category. Secondly, the bank under each category has been chosen

based on minimum number of two branches in the Salem District as on March 2010.

Sample Size

By the above processes totally 22 banks were chosen for the purpose of study from every 22

banks.

Table 1.3

Number of Sample Size in Customers and Bank Executives

S.No Name of the Bank Customers Bank Employees

1 State Bank of India 25 10

2 Allahabad Bank 25 10

3 Andhra Bank 25 10

4 Bank of India 25 10

5 Canara Bank 25 10

6 Central bank of India 25 10

7 Corporation Bank 25 10

8 Indian Bank 25 10

9 Indian Overseas Bank 25 10

10 Punjab National Bank 25 10

11 Syndicate Bank 25 10

12 UCO Bank 25 10

13 Union Bank of India 25 10

14 Vijaya Bank 25 10

15 Catholic Syrian Bank 25 10

16 Centurion bank of Punjab 25 10

17 ICICI Bank 25 10

18 Karnataka Bank 25 10

19 Karur Vysya Bank 25 10

20 Lakshmi Vilas Bank 25 10

21 South Indian Bank 25 10

22 Tamil Nadu Mercantile Bank 25 10

Total 550 220

Interview Schedule

Two sets of Interview Schedules have been used for the purpose of the study which were collected

from

1. Customers

2. Bank Employees

Data Collection

The sample size was determined by following the three fold approach

1. The total number of Public Sector Banks, Private Sector Banks, in the Salem district has

been taken into consideration to decide about the number of banks for the purpose of

study in each category.

2. The banks under each category have been chosen based on minimum number of two

branches in the Salem district as on March 2010.

3. By the above process totally 22 banks were chosen for the purpose of study. From each of the 22 banks 25 customers and 10 bank employees were selected as respondents.

4. The branches situated in the North, South and Central part of the Salem district were

covered for the purpose of study.

5. 555 interview schedules were collected from the customers and 225 interview schedules

were collected from the bank employees. Out of the above 550 interview schedules of customers and 220 interview schedules of the bank employees were taken into

consideration for the purpose of the research.

Scale Development

This thesis employs two different scales in its measurement of the perception of respondents

about the HRM competencies, constraints and attrition. Each scale has its own range and

options. The variety and number of scales are Likert‟s five point scale and bipolar scale (eg.

Yes / No type).

The interview schedule used comprises both optional type and statements in Likert‟s five

points scale. The responses of these sections are obtained from the customers and the

employees of various banks in the Salem district in the five point scale, which ranges as

follows: 5 – Strongly Agree, 4- Agree, 3 – Neutral, 2 – Disagree, 1- Strongly Disagree.

This allowed for the standardization of results as well as making it easier for respondents to

complete the interview schedule. The author and supervisor discussed the Likert‟s five point

scale and decided to assign the numerical value 3 for undecided or neutral. By referring to

several approaches in statistics, it was decided to assign 3 to neutral. Undecided had a

connotation that, the statements in the interview schedule do not have proximity to the

respondents. But neutral implies that they are well acquainted with the statements in the

interview schedule but they want to remain equidistant from the two extremities of agreement

and disagreement. This would not affect the high Cronbach value.

Literature on theoretical background CRM practices

CRM in the field of retail banking has attracted much of researchers and practitioners. There

has been continuous research in the field of CRM and its applications in banking and

financial services. But in India, research in the field of relationship marketing has not taken

off to the expectation and is still in the infant stage when compared to other countries in the

west. However, the available contribution from the following authors and researchers in India

and other parts of the world in the area of CRM in retail banking is worth mentioning. Hence,

the empirical works relating to relationship management of the review is presented in this

chapter.

Initiation of CRM

Aihie Osarenkhone (2007) this is an exploratory study on components of Customer

Relationship Management (CRM) strategy to its implementation. This study reveals that

relationships are not a tactical approach to buyer-seller exchange. CRM strategy requires and

commitment from top management, systematic cross-functional communication, and

customer loyalty training programmes for all employees. CRM is a strategy business and

process is a continuous learning process where information about individual customer is

transformed into a customer relationship. Future researcher analysis should be based when

conceptualizing CRM should consist of business strategy, business philosophy and a database

application.

CRM Maintenance

Sudhir Sharma (2008) in his study highlights on this paper is customer relationship, banking

industry, development of CRM steps taken by the banks to improve the CRM, customer

retention and customer selection. His author‟s conclusion is that paper on banking industry is

concerned, excelling and managing customer relationships will be the future of this industry

as customer focusing is not to be viewed just as a business strategy but it should become a

corporate mission. Unless this mission percolates throughout the organization at all levels, the

chances are that the attempts to address customer issues will receive only lip sympathy.

Building value for customers and building shareholders value the challenge for banking

industry in India should be treated as two faces of the same coin in the area of people

(changing their beliefs and attitudes), technology and quick adaptation in CRM.

Technology on CRM

Saurbhi Chaturuedi and Rishnu Roy (2007) have focused on Customer Relationship

Management provides interactive, personalized and relevant communication with customer to

develop and maintain relationships. Customer Relationship Management (CRM) is a strategic

orientation which is the most important long-term customers and develops an understanding

of these customers whom can be retained. Technologies used by companies to attract

successfully and retain customers for the maximum corporate growth and profit. CRM is the

goal of meeting customer expectations and needs to value them. CRM includes the breaking

down of departmental barriers, improving information flow and work processes. These

changes influence effectiveness of an organization. CRM is not a technology thing, though

technology is fundamental in making it successful: CRM is a business philosophy.

Customer Satisfaction

Ashok and Kumar (2006) in their endeavour to elicit the opinion of the customers on their

satisfaction with selected bank branches have carried out this empirical study. Banks are the

mart of the world, the nerve centers of economics and barometers of nation‟s property.

Today, the cost of retaining a customer is one-tenth when compare with the cost of acquiring

a new one. Banks do offer tangible services but that cannot satisfy the customers, who need

intangible services which could be experienced like behaviour and efficiency of staff, speed

of transactions and the ambience. The focus of this study is to bring out by what extent the

selected bank branches cater to the needs of the customers. Customer awareness has to be

created and their satisfaction should be known to the customers. Quartile deviation has been

used to find the customers level of satisfaction with their banks. Chi square test is applied

between the personal and the independent variables to study the factors influencing the level

of customer satisfaction. The study concludes that the focus of banking business will have to

be customer centered. It also further indicates that nationalized banks are attempting its best

to attract higher rate of customer satisfaction.

Customer Relationship Management

Relationship marketing sometimes is referred to as CRM. CRM is a relationship process

which an organization can cultivate with its customer segment in such a way that it could

benefit both the customer and organizations. The growing expectations of the customers, fast

changing preference and opportunities available to him as a consumer has made him the king

in true sense. Customer satisfaction is a growing concern for the banks that want to grow in

this competitive world of today.

The concept of CRM is now gaining wide acceptance and is recognized as a powerful tool for

business development and to have an edge over the competitors on account of the universal

traits of human behavior. Organizations has focused earlier on their products as the starting

point and then looked around for customers to sell it. But the approach of CRM is different –

it starts with the customer not the totality of customers because every customer is an

individual and thus exact customer has to be dealt individually to find out what they want and

accordingly design the products as per their need and supply. In a nut shell, CRM is about

growing endurable relationship with profitable customers.

CRM focuses on customer retention by adopting a customer oriented strategy to delight their

customers rather than just aiming at their satisfaction. It makes the use of the relevant

technology available for the purpose. But it should be remembered that proper planning and

care is exercised before its implementation to see that the steps are taken for the customer

oriented attitude to percolate throughout the organization. This alone can guarantee its

success, especially in view of the large investment that the CRM technology entails. The

technology helps only in enhancing the relationship with the customers by offering guidance

and easy access to the analyzed information about customer and other related matters.

CRM adoption is very popular with financial institutions world over than any other type of

industry. Some new generation banks in India have already adopted it. But the Indian PSBs

do not seem to have given a thought to it yet. May be it is time now for those in authority to

give a thought about its suitability to the Indian public sector banks and then plan its proper

implementation if they would help these banks to improve their customer orientation.

Customer orientation is the attitude of a concern towards its business wherein it places

emphasis on listening to customers with a view to maximize their satisfaction with the

concern and its products. Such a concern aims at maximizing the long term satisfaction of a

customer even at the expense of losing immediate sale. In contrast, a „Sale Oriented‟

organization encourages opportunistic means with a focus on immediate sales even at the cost

of long term customer satisfaction.

Thus, a customer oriented organization is the one which

Constantly thinks and talks about its customers

Continuously assesses its customers‟ perception

Resolves priority issues in favour of its customers.

Gives in, compromise, and adds value to its customers.

Makes amendments to customers for avoiding poor treatment

Employs “whatever it takes” policy to satisfy special needs.

Redesigns the processes, redeploys the resources when they get in the way of service

quality.

The Indian public sector banks have treaded a unique path since their time of inception. They

were born in a competitive regime. After nationalization they faced a totally regulated, non-

competitive atmosphere with a social responsibility at their heart. Now, they are trudging the

path of regulated-competitive regime with the knowledge that nothing less than a strong

global competition environment seems to have made them to forget what exactly a customer-

oriented organizations.

Customer Role in CRM

The following t-test and factor analysis are used to identify the customer‟s perception of

variance elements of CRM in public and private sector banks. These perceptions are

identified in lickers 5 point scale which range from strongly agree to strongly disagree in fact

theses variables are considered as dependent in nature.

The exact perceptions of these 500 respondents is ascertain through the comparisons of

hypothesized mean value 3 and computed mean value this enables to uncertain the optimist

or pessimistic perception about various element of CRM.

1. Perception of customers regarding initial strategies

CRM is a business strategy and philosophy. CRM aims at understanding the customers, their

present and future needs, providing best possible service enhancing customer experience and

satisfaction, reducing the customer turnover, and ensuring that they remain customers for life.

This study concentrates on 9 variables of customer relationship of banks. The prominent

variables are banks are able to ascertain time which has been taken to service your

transaction, hospitability offered, behavior of the officials in your bank, periodical statement

received from your bank, efficiency of ATM service by your bank, appropriate location of the

ATM centers, physical appearance of your bank, customization of your bank‟s services to

suite your specific need. The application of t-test to compare the computed mean value based

on the perception of customers. In this t-test the computed mean value of the customer is

compared with hypothesized mean value 3 to obtain the significance or insignificance value.

The results are presented in the following.

Table 1

One sample Statistics and t- test for Customers regarding Initial Strategies

variable N mean Std.

Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

IS1 500 3.7420 1.03614 .04634 16.013 .000

IS2 500 3.0640 .96632 .04322 1.481 .139

IS3 500 3.4580 .90904 .04423 10.355 .000

IS4 500 3.8560 .97013 .04339 19.730 .000

IS5 500 3.9140 .86493 .03868 23.629 .000

IS6 500 3.1080 .97685 .04369 2.472 .000

IS7 500 3.1440 .99863 .04466 3.224 .000

IS8 500 3.8860 .88689 .03966 22.338 .000

IS9 500 3.7600 .92309 .04128 18.410 .000

(Source: Primary Data)

From the above table, it is found that the mean value of the initial strategies variables range

from 3.0640 to3.9140. In particular it is identified that the variable number of IS2 to IS5

hospitability offered by your bank, efficiency of ATM service by your bank possesses the

mean values strictly greater than 3.5.

The T-test values are significantly greater than “3”.The significance of these mean value are

derived from the t-values shown in the table. It is found that t-values 16.013, 10.355, 19.730,

23.629, 2.472, 3.224, 22.338, 18.410 are statistically significant at 5% level. But the second

variable in the initial strategies t=1.481 is insignificant at 5% level. Therefore, it can be

concluded that, the customers of these banks strongly agreed the time taken service, behavior

of the officials in your bank, periodical statement, efficiency of ATM service, appropriate

location of the ATM centers, loan facilities, physical appearance of your bank, and

customization of bank‟s services. It also indicates, the IS2 variable, hospitability offered by

your bank. These t values are insignificant because these t- test values are lower than 3. It is

found that the customer perceived with agreeableness that their bank satisfy them in the

quickness of service and ambience of the banks.

2. Strategies to maintenances the customers

Recently a new trend has been observed in the market place with respect to maintaining the

customers. Though most people feel that implementation of an integrated CRM is better,

some organisations, including some reputed and structural organisations, have implemented

several strategies to maintain the customers.

This study has 16 variables of strategies to maintain the customers. The prominent variables

are personal contract, marketing information and advertisement ,personal reports, bank‟s

communication with its customers, general and promotional communication, various services

offered by the bank, bank staff are courteous and give proper guidance, may I help you

counter, understand customers requirements, all information pamphlets and banners are

displayed for customers, ombudsman committee, grievance redressal, customers suggestions

and complaints, the different scheme offered by this bank are customers friendly, important

and valuable customer, customer make better financial decision. The application of t-test to

compare the computed mean value based on the strategies to maintain the customers. In this

t-test the computed mean value of the customers is compared with hypothesized mean value 3

to obtain the significance or insignificance value. The results are presented in the following.

Table 2

One sample Statistics and t- test for CRM Maintenance Strategies

Variable N mean Std.

Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

MA10 500 3.5780 .95590 .04275 13.521 .000

MA11 500 3.5220 .98155 .04390 11.892 .000

MA12 500 2.2640 .96133 .04299 -17.119 .000

MA13 500 4.6080 .50084 .02240 71.792 .000

MA14 500 4.4260 .59769 .02673 53.349 .000

MA15 500 3.1820 .90028 .04026 4.520 .000

MA16 500 4.2580 .58662 .02623 47.952 .000

MA17 500 3.4900 .89639 .04009 12.223 .000

MA18 500 3.8280 .86250 .03857 21.466 .000

MA19 500 3.8620 .82724 .03700 23.300 .000

MA20 500 3.5820 .84659 .03786 15.372 .000

MA21 500 3.8760 .84738 .03790 23.116 .000

MA22 500 3.9960 .83988 .03756 26.517 .000

MA23 500 4.0160 .91948 .04112 24.708 .000

MA24 500 3.6300 .76830 .03436 18.336 .000

MA25 500 3.3960 .91917 .04111 9.634 .000


From the above table, it is examined that the mean values of the strategies maintain the

customer‟s variable range from 2.2640 to 4.6080. Generally, it is ascertained that the variable

number 12 and 13, personal reports and account summary reports are prompt and clear, and

bank‟s communication with its customers are frequently and personalized dealings possess

the mean values strictly greater than 4.

The T-test values are significantly greater than “3”. The significance of the mean value is

derived from the T-values have been shown in the table. It is found that T-values 13.521,

11.892, 17.119, 71.792, 53.349, 4.520, 47.952, 12.223, 21.466, 23.300, 15.372, 23.116,

26.517, 24.708, 18.336, 9.634 are statistically significant at 5% level. Therefore, it can be

concluded that the customers from the different banks strongly agreed about 16 strategies to

maintain the customers. Hence, they also agreed. It is emphatically identified that the

customers are maintained with the help of their personal contact to customers, marketing

information advertisements from the banks, personal reports are prompt and clear to the

customers. It also found their bank‟s communication, may I help you counter, ombudsman

committee, grievance redressal, customers suggestions and complaints, banker‟s advice to the

customer about financial decision are ranked by the customers of the banks in an optimistic

manner.

It is found that the CRM maintenances strategies with agreeableness that there banks satisfy

them in the maintenance of customers and ambience of the banks.

3. Technology on CRM

Technology has enabled banks to offer new services. Today the demand is not only for

accurate, speedy and efficient service but also for new services.

This study reveals 10 variables of technology and CRM. The distinguished variables are

ATM installed, e-mail internet services, the answers the phone call in a courteous manner

and in a friendly way, customers phone call are immediately directed to the appropriate

person, core banking, technology time consuming to the customer, employees recruit,

technology the bankers will avoid the rush too, computerizing the banking transactions. This

study also focuses identification of customer problems through advanced technology and

technology perfects the customer relationships.

The application of t-test to compare the computed mean value based on the CRM technology

of customers. In this t-test computed mean of the customers is compared with hypothesized

mean value 3 to obtain the significance or insignificance value. The results are presented in

the following.

Table 3

One sample Statistics and t-test for Technology on CRM


Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

TEC26 500 3.4340 .73670 .03295 13.173 .000

TEC27 500 4.1160 .76924 .03440 32.441 .000

TEC28 500 3.3260 .87936 .03933 8.290 .000

TEC29 500 3.8880 .85611 .03829 23.194 .000

TEC30 500 3.6620 .97656 .04367 15.158 .000

TEC31 500 3.5360 .95841 .04286 12.505 .000

TEC32 500 3.6400 .93603 .04186 15.289 .000

TEC33 500 4.2240 .67434 .03016 40.587 .000

TEC34 500 4.0760 .73164 .03272 32.885 .000

TEC35 500 4.1360 .75806 .03390 33.509 .000


From the above table, it reveals that the mean values of the CRM technology and customers

variable range from 3.3260 to 4.2240.Generally, it is ascertained that the variable number 28

and 33, customers problems are identified through advance technology, employees will

recruit more to fill the needs to the customers possess the mean values strictly greater than 4.

The T-test values are significantly greater than “3”. The significance of these mean value are

derived from the T-values shown in the table. It is found that T-values 13.173, 32.441, 8.290,

23.194, 15.158, 12.505, 15.289, 40.587, 32.885, 33.509 are statistically significant 5% level.

Therefore, it can be concluded that the customers of these banks strongly agreed the e-mail

internet services, ATM, core banking systems, technology time consuming, identification of

customer‟s problems through advanced technology and technology perfect the customer

relationship. It is found that the technology and CRM with agreeableness that their banks

satisfy them through CRM technology to customers.

4. Customers Satisfaction

All customers are not equal. The good and valuable customers must be retained. Companies

during the customer acquisition focus on market share, there on retention and later on

differentiated service to the best customers. In the complex business environment that exists

today, only those that are capable of providing total customer satisfaction can survive.

This study provides 14 variables of customer satisfaction in CRM. The important variables are

awareness creation, bank‟s services and scheme widely available, bank users all available media

to create awareness, branches are located at convenient locations, waiting time to contact the

concerned person, customer services genuine and satisfying, customer services in your banks is

personalized, friendly, customers services prompt and modernized, the atmosphere in the bank is

warm and welcoming, the service provided is very much concerned about customers problem, the

scheduled banking hours suits all customers, ample parking space, the facilities‟ and benefits

provided by this bank.

The application of t-test compare to the computed mean value based on the CRM technology



the following.

Table 4

One sample Statistics and t- test for Customer Satisfaction


Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

CS36 500 4.0540 .83215 .03721 28.322 .000

CS37 500 3.6940 .94560 .04229 16.411 .000

CS38 500 2.7360 1.02391 .04579 -5.765 .000

CS39 500 3.4500 .92802 .04150 10.843 .000

CS40 500 3.9220 .83265 .03724 24.760 .000

CS41 500 4.0560 .71686 .03206 32.939 .000

CS42 500 3.6520 .88570 .03961 16.461 .000

CS43 500 3.7260 .86743 .03879 18.715 .000

CS44 500 3.6880 .87418 .03909 17.598 .000

CS45 500 3.9120 .79594 .03560 25.621 .000

CS46 500 3.0300 1.07676 .04815 .623 .534

CS47 500 3.9480 .86649 .03875 24.464 .000

CS48 500 3.8000 .93474 .04180 19.137 .000

CS49 500 4.1620 .79057 .03536 32.866 .000


From the above table indicates that the mean values of the variables range from 2.7360 to

4.1620. Generally, it is indicated that the 38 and 49 variables, bank users all available media

to create awareness about their services, the facilities and benefits provided by this banks is to

be appreciated and possess the mean value strictly greater than 4.

The T-test values are significantly greater than “3”. The significance of these mean value are

derived from the t-values shown in the table. It is found that t-values 28.322, 16.411, 5.765,

10.843, 24.760, 32.939, 16.461, 18.715, 17.598, 25.621, 24.464, 19.137, 32.866 are

statistically significant at 5% level. Except the variable of 46 in the customer satisfaction

t=.623 insignificant at 5% level. This shows that, the customers of these different banks

strongly agreed about 13variables of customer satisfaction such as: awareness creations, the

ample parking facilities, media awareness, the customer‟s services satisfaction, personalized,

prompt and modernized, the banks atmosphere is warm and welcoming at the suitable banks

hours. It is also indicated that the 46 variable, the services provided is very much concerned

about customers problem, T-values are lower than 3, so, it gives insignificance. Therefore, it

can be concluded that the customers‟ satisfactions of different banks agreed to the customers.

It is found that the customer‟s satisfaction with agreeableness that there banks satisfy them in

the customer‟s satisfaction and ambience of the banks.

5. Impact of CRM on Customer

CRM provides the competitive differentiation in near parity environment. CRM enables

customer centric process. Identifying, acquiring, nurturing, retaining customers and

developing lifelong relationships with them by providing best possible service and

satisfaction in the process of achieving organizational goals towards this end. CRM aims at

serving the customers on one to one basis, reducing the intermediaries, continuously

monitoring customer needs, both stated and unstated and providing services and products in

alignment visit to those needs

This study examines on 7 variables of impact of CRM on customer. The distinguished

variables are customers have inclination towards smooth management, CRM reflects the

growth of the banking services, customer satisfaction is primary responsibility of the bank,

problems are solved through proper CRM, prompt services-availability are essential for

CRM, financial performance of banks, CRM is lucrative concept for customer.

The application of t- test to compare the computed mean value based on the CRM technology



the following.

Table .5

One sample Statistics and t-test for Impact of CRM


Deviation Std. Error

Mean t-value Sig(2-

tailed) IMP50 500 3.4880 .97146 .04345 11.233 .000 IMP51 500 3.1140 .98943 .04425 2.576 .010 IMP52 500 3.2300 .97725 .04370 5.263 .000 IMP53 500 3.9180 .82743 .03700 24.808 .000 IMP54 500 3.1080 1.07827 .04822 2.240 .026 IMP55 500 3.4740 .93116 .04164 11.383 .000 IMP56 500 3.4760 .93765 .04193 11.351 .000


From the above table, it is examined that the mean values of the variables range from 3.1080

to 3.9180. Generally, it is ascertained that the 54 and 53 variable CRM is lucrative concept

for customer, financial performance of banks is essential for CRM, possess the mean values

strictly greater than 3.

The t-test values are significantly greater than “3”. The significance of these mean value are

derived from the t-values shown in the table 11.233, 5.263, 24.808, 11.383, 11.351are

statistically significant at 5% level. But except the 51and 54 variable in the impact of CRM

on customers, t- values of 3.1140 and 3.1080 insignificant at 5% level. Therefore, it can be

concluded that the customers of these different banks strongly agreed about 5 variables as the

customer satisfaction, prompt services, and financial performance. If banks, CRM have

inclination towards smooth management, CRM reflects the growth of the banking services.

This study also indicated that the customers in these banks were disagreed the service and the

problems are solved through proper CRM. CRM is lucrative concept of customer. Because,

these 2 variables T- test values are lower than 3 so, it gives insignificant. It is found that the

impact of CRM on customer with agreeableness that their banks satisfy them in the impact of

CRM and ambience of the banks.

The following percentage analysis and t-test executive‟s perception of variance elements of

CRM maintenance, CRM strategies, technology on CRM and customer satisfaction, is done

to identify the banking details of public and private sector banks. The main aim of this

section is to analysis the banking details the various banking services offered by public and

private sector banks. The opinion of the bank personal is obtained through likely 5 point

scales which ranges from strongly agree and strongly disagree. In this context a parametric t-

test applied to study exactly the opinion of respondent.

Executives Role in CRM

The following percentage analysis and t-test executive‟s perception of variance elements of

CRM maintenance, CRM strategies, technology on CRM and customer satisfaction, is done

to identify the banking details of public and private sector banks. The main aim of this

section is to analysis the banking details the various banking services offered by public and

private sector banks. The opinion of the bank personal is obtained through likely 5 point

scales which ranges from strongly agree and strongly disagree. In this context a parametric t-

test applied to study exactly the opinion of respondent.

6. CRM Maintenance

CRM maintenance is a fundamental factor among all the successful organization to retaining

the customers. Success and failure of the organization is depending upon

maintenance/motivation of the customers. Basically all the organizations are believed to have

this instructional procedure in CRM. This study also emphasizes on 20 variables of CRM

maintenance. The important variables are segregation of frequency customers more

concentration, acquire new customers, ideal location, wear an identify badge, remove FUD,

customers requirements, create awareness, office hours, inquiry, customer‟s request, ATM

counter, transactions, quick withdrawal, the Ombudsman service, over-drafts, service

charges, prompt and quick service, feel the part of the organization, faulty service, better

service.

Table 6

Opinion of Executives on CRM Maintenance

variable

N mean Std.

Deviation

Std.

Error

Mean

t-value Sig(2-

tailed)

CRMM1 250 4.1677 1.01642 .04514 25.867 .000

CRMM2 250 4.0947 .77696 .03451 31.724 .000

CRMM3 250 2.7791 1.13449 .05038 -4.384 .000

CRMM4 250 3.7850 1.14516 .05086 15.435 .000

CRMM5 250 4.3945 .78914 .03505 39.789 .000

CRMM6 250 2.8580 1.28520 .05708 -2.488 .013

CRMM7 250 3.8422 .92759 .04120 20.444 .000

CRMM8 250 3.9231 .91323 .04056 22.759 .000

CRMM9 250 2.8777 1.15277 .05120 -2.389 .017

CRMM10 250 3.9231 1.09797 .04876 18.930 .000

CRMM11 250 2.1223 1.22750 .05452 -16.100 .000

CRMM12 250 4.3037 .83551 .03711 35.136 .000

CRMM13 250 1.7041 1.10659 .04915 -26.368 .000

CRMM14 250 2.4122 1.14454 .05083 -11.563 .000

CRMM15 250 2.0296 1.08580 .04822 -20.124 .000

CRMM16 250 3.2367 .98366 .04369 5.418 .000

CRMM17 250 4.5207 .81553 .03622 41.987 .000

CRMM18 250 4.2505 1.08273 .04809 26.005 .000

CRMM19 250 2.2012 1.22513 .05441 -14.681 .000

CRMM20 250 2.7041 1.07580 .04778 -6.192 .000


From the above table, it is found that the mean value of the CRM maintenance variables

range from 1.7041 to 4.5207. In particular, it is identified that the variable number of

CRMM13 to CRMM17, teller system in our bank for quick withdrawal, prompt and quick

service to our banks executives possesses the mean value 3.5.

The t-test values are significantly greater than “3”. Since the t-values are significantly is

positive side and it is found that the bank executives strongly agreed the t-values are 25.867,

31.724, 15.435, 39.789, 20.444, 22.759, 18.930, 35.136, 5.418, 41.987, 26.005 are

statistically and significantly 5%level.The bank executives strongly agreed that

concentration is more on frequency customers, acquire new customers, bank staff wear on

identify badge, we remove the fud, create awareness, customers requirements are attended to

within the office hours, customer‟s request, minimum time to complete transaction, service

charges are minimum, prompt and quick service to our customer, customers feel the part of

the organization. They disagreed that the T-values are 4.384, 2.488, 2.389, 16.100, 26.368,

11.563, 20.124, 14.681, 6.192, there banks situated always in an ideal location, ATM counter

installed for the convenience of our customers, quick withdrawal, Ombudsman service, over-

drafts facility, better service to our customers. It is also indicated that the 5 and 9 variables,

are different schemes to customers' requirements, and few customers to become an inquiry,

T-values are lower than 3, so, gives insignificance. Therefore it can be concluded that the,

CRM maintenance of different banks agreed to the executives.

7. Strategies for CRM

The true business of every organization is to make and keep customers. CRM is the latest

philosophy most organizations are adopting for different strategies. CRM has caught the

attention of practicing managers, academicians, and industry leaders. This study provides the

necessary insight into the improvement aspects of this revolutionary concept. This study

provides 13 variables of strategies in CRM. The important variables are training, rewards for

creating cordial relations among management and customers, attract new customers,

committed project, customer satisfaction, and proper guidance to new customers, customers

directly in the delivery process, and sort to outsourcing, customer retention, and pamphlets.

The application of t-test to compare the computed mean value based on the perception of

bank executives. In this t-test the computed mean value of the executives is compared with

hypothesized mean value 3 to obtain the significance or insignificance value. The results are

presented in the following.

Table 7

Opinion of Executives on Strategies for CRM

variable N mean Std. Deviation Std. Error

Mean t-value Sig(2-

tailed) SCRM21 250 3.9763 1.12615 .05001 19.521 .000 SCRM22 505 4.6535 .74317 .03307 49.998 .000 SCRM23 250 4.6312 .66835 .02968 54.954 .000 SCRM24 250 3.5286 1.17982 .05240 10.088 .000 SCRM25 250 4.1854 1.00451 .04461 26.572 .000 SCRM26 250 2.3669 1.12970 .05017 -12.619 .000 SCRM27 250 2.0256 1.13398 .05036 -19.347 .000 SCRM28 250 4.0375 1.01985 .04529 22.906 .000 SCRM29 250 2.4615 1.07982 .04796 -11.228 .000 SCRM30 249 4.2312 .87421 .03886 31.681 .000 SCRM31 250 3.9329 .97976 .04351 21.441 .000 SCRM32 250 3.0533 1.31993 .05862 .908 .364 SCRM33 250 4.3846 .84348 .03746 36.962 .000


From the above table, it is found that the mean value of the strategies for CRM variables

range from 2.0256 to 4.6535. In particular, it is identified that the variable number of

SCRM27 to SCRM22, staff gives proper guidance to new customers and rewards based on

their customer relations with its banks executives who are frequently and personalized

dealings possess the mean values strictly greater than 3.

The T-test values are significantly greater than “3”. Since the t-values are significantly is positive

side, it is found that the bank executives strongly agreed the t-values are19.521, 49.998, 54.954,

10.088, 26.572, 22.906, 31.681, 21.441, and 36.962 which are statistically significant at 5% level.

The bank executives strongly agreed that respect to customers, reward based on their customer

relationships, different customers with different treatment is followed in CRM, attract new

customers, highly committed project, the executives and managers are contained to their cabin,

we sort to outsourcing, we generate new concepts and approaches for customer retention,

pamphlets and notice to easy available. They disagree that the T-values are 12.619, 19.347,

11.228, maintain to measure the level of customer satisfaction, proper guidance to new

customers, customers directly in the delivery process. It also indicates the SCRM32 variable,

expectations of customers in times of emergency. These T- values are insignificant because these

T-test values are lower than 3. Therefore, it can be concluded that the strategies for CRM of

different banks agreed to the executives.

8. Technology in CRM

Technology in an essential enabler of the CRM, to implement the CRM in the modern day

organizations with millions of customers, so as to achieve one to one relationships with all the

profitable and valuable customer, leveraging on Technology is must. The entire ranges of the

technologies that are used in building the CRM. This study focuses on 12 variables of technology

in CRM. The distinguished variables are to introduce high technology with minimum cost,

advanced technology, modern technology, the customer‟s feedback, core banking internet

solutions, fulfill the needs of the customers, time consuming, computerizing the banking

transactions.





Table 8

Opinion of Executives on Technology in CRM


Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

Tec34 250 2.4852 1.32074 .05866 -8.776 .000

Tec35 250 3.4142 1.25347 .05567 7.441 .000

Tec36 250 4.4615 .74122 .03292 44.398 .000

Tec37 250 3.6371 1.21032 .05375 11.852 .000

Tec38 250 4.2702 .75441 .03350 37.912 .000

Tec39 250 2.8619 1.15784 .05142 -2.685 .007

Tec40 250 4.1953 .93215 .04140 28.872 .000

Tec41 250 2.4680 1.11982 .07082 -7.512 .000

Tec42 250 2.0360 1.10616 .06996 -13.779 .000

Tec43 250 4.0000 1.05663 .06683 14.964 .000

Tec44 250 2.4120 1.06903 .06761 -8.697 .000

Tec45 250 4.2120 .84493 .05344 22.680 .000


From the above table indicates that the mean values of the variables range from 2.0360 to

4.4615. In generally, it is indicated that the 42 and 36 variables, time consuming to increase

the employees, competition is met with advanced technology is to be appreciated possess the

mean value strictly greater than 3.

The t-test values are significantly greater than “3”. Since the t-values are significantly is

positive side, it is found that the bank executives strongly agreed the t-values are 7.441,

44.398, 11.852, 37.912, 28.872, 14.964, and 22.680 which are statistically significant at 5%

level. The bank executives strongly agreed that advanced technology, competition met on

advanced technology, modern technology, technology manage the real time customer

information and feedback, to fulfill the needs of the customers, time consuming,

computerizing. They disagree that the t-values are high technology with minimum cost, core

banking is one of the internet solutions, technology, time consuming, and computerized

customer details accounts will reduce the bankers work. It is also indicated that the 39

variable, core banking is one of the internet solutions, t-values are lower than 3, so, it gives

insignificant. Therefore, it can be concluded that the technology in CRM of different bank

agreed to the executives.

9. Impact of CRM

The aim of any organization is survival and growth. The key to achieve these objectives is

their ability and retain the customers. It costs ten times more to acquire a new customer than

holding on an existing one. Organizations must be able to understand the life time value of

the customers. CRM helps in attracting and retaining valuable, high/most valuable, customers

and economic value of the customers. Hence, the CRM helps the organization, to increase

sales, product/service, and profit and growth rate. This study examines on 7 variables of

impact of CRM. The outstanding variables are customers are maximized, survival is made, to

increase product/ service, financial performance, banking growth rate, overall performance of

satisfactory.





Table 9

Opinion of Executives on Impact of CRM


Deviation

Std. Error

Mean

t-value Sig(2-

tailed)

IMP46 250 3.8960 .94698 .05989 14.960 .000

IMP47 250 2.9360 1.33078 .08417 -.760 .448

IMP48 250 4.3920 .82038 .05189 26.828 .000

IMP49 250 2.6600 1.34747 .08522 -3.990 .000

IMP50 250 3.2040 1.18998 .07526 2.711 .007

IMP51 250 4.4520 .77595 .04908 29.587 .000

IMP52 250 3.9400 1.11597 .07058 13.318 .000


From the above table, it is examined that the mean values of the variables range from 2.6600

to 4.4520 generally, it has been ascertained that the 49 and 51 variable financial performance,

customer satisfaction, possess the mean values strictly greater than 3.

The t-test values are significantly greater than “3”. Since the t-values are significantly

positive side and it is found that the bank executives strongly agreed the t-values are14.960,

26.828, 29.587, and 13.318 which are statistically significant at 5% level. The bank

executives strongly agreed that customers are maximized, survival is made easy amid

competition, banking growth rate increased rapidly, customer satisfaction is achieved, and

overall performance is satisfactory. This study also indicated that the customers in these

banks were disagreed the services output increase, banking growth rate increased rapidly.

Because, these 2 variables t-test values are lower than 3 so, it gives insignificant. Therefore, it

can be concluded that the impact of CRM of different banks agreed to the executives.

A CRM model of banking industry in Salem disrict

The present research concentrate on four important aspects of CRM namely, initial strategies,

maintenance strategies, technology in banking services and service satisfaction of customers.

The opinion are sought from both customers as well as bank executives a considerable

number of sample respondents from these domains on analyzed using percentage analysis, T-

test, Factor analysis, Cluster, Discriminate analysis, Analysis of Variance and Co-efficient of

Correlation are subsequently exploited to identify the parametric and non-parametric

relations.

Factor analysis the principal component method identify the factors are initial strategies,

maintenance strategies, technology and service satisfaction this factors act as a base to

identify a various perceptional difference among the customers of public and private sector

banks.

The five clusters of the four elements of CRM and impact of CRM are associated using non-

parametric, chi-square analysis. All these ascertain the effectiveness of CRM in public and

private sector banks. It is found that the four element initial strategy, maintenance strategies,

technology and service satisfaction are highly indispensible enable the complete effectiveness

of CRM.

The present research also cross verified the effectiveness of CRM through the opinion of

bank executives. The t-test followed by correlation analysis establishes significance

relationship between effectiveness of CRM. As well as CRM elements the gap between the

perception of customers and opinion of bank executives actively enumerate the required

effectiveness of CRM. The total mean score of the two discriminate functions completely

enumerate the upper and lower limits CRM effectiveness

Z1 =.362(Initial Strategy) +.636(Maintenance Strategy)* +.518(Technology)*

+.659(Satisfaction)*

= .362(1) +.636(5) +.518(5) +.659(5)

= 0.36+3.18+2.59+3.30

Z1 = 9.43.

Z2 =.955(Initial Strategy) +.205(Maintenance) +.440(Technology) +.391(Satisfaction)

= .955(5) +.205(1) +.440(1) +.391(1)

= 4.78+0.21+0.44+0.39

Z2= 5.82

These Z values clearly indicated the range values 5.82 to 9.43.

From these it is concluded that any Z score beyond 5.83 and 9.43 indicated in effective CRM.

Figure 1

A CRM Model of Banking Industry in Salem District

Customer’s Perception on CRM Banker’s Perception on CRM

X2=42.966 R=.321

N

X2=37.337

R=.328

X2=66.165

X2=55.390

R=.369

FINDINGS

Findings

The customers of banking industries strongly believed that advertisements, reports,

communication, guidance, may I help you counter, information pamphlets and

ombudsman committee customer‟s also admirable role to achieve the customer

1. Attractive

services

2. Quick services

3. Customer

Retention Strategy. 1. Customer value

measurement

2. Banker strategy

3. Responsive

customer service

4. Customer wins

back strategy

5. Customers

attractive services

6. Formidable

customer

relationship

1. Establishing

electronic re-contact

2. Technology and

CRM

3. Customer service

strategy 1. Customer

satisfaction

2. Materialization of

customers

3. Establishment of

transparency

4. Cordial

relationship

between the

customer and staff

5. Bankers-

customers attractive

strategy

1. Initial

Strategies

2. CRM

Maintenance

3. Technology in CRM

Effectivene

ss on

CRM

Effectivenes

s

On

CRM

satisfaction. The customer staff relationships in CRM depend upon employee‟s

personal touch with their customers and employee‟s performance.

Finally, internet services, advanced technology, core banking, and financial

performance well defined strategies and achievement of customer satisfaction directly

create incidental effects on customers and make them to stick on to the same service

providers.

Male customers possess high perception about initiation strategies; strategies increase

the customers, customers‟ satisfaction and customer staff relationship of the banking

industry. Hence, in the case gender, CRM and customer satisfaction differ

significantly and other factors do not differ significantly.

The executives of banking industries strongly agreed that initiation in CRM primarily

depend upon identifying the potential customers and that loyalty rates towards

organization.

The selected banking industry strongly believed that the maintenances procedures in

CRM aimed to concentrate current customers, gathering the customer‟s grievances,

periodic evaluation, employees training, employees are rewarded and different

customers are given different treatment.

The selected banking industries are strongly accepted the technology in CRM

basically depends upon the introduction of cost, usage of modern technology and

advanced technology and understanding the customer‟s behaviour.

Suggestions

The customers of banking industries preferred and except transparency with the

executives. So, customer interaction programmes must be essential to study the

characteristic features of the customers.

Information search place a major role in consolidating optimistic relationship between

customers and executives. So, meticulous care must be taken by the industries to

advertise their services.

The customers are advised to the about mutual benefit. This enables the industries to

improve the quality of services. The qualitative approach and proportionate should be

taken care for their customers.

Since the executives are enthusiastic in initial strategies to acquire the customers the

industries may adopt certain incentives strategies for the customers to encourage

them. This move would pave the way to maintain smooth relationship between

executives and customers.

The executives of these banking industries should conduct a survey to measure the

customer preference and level of satisfaction.

Conclusion

CRM is a powerful concept for the success of any industry. It paves the way to maintain an

optimistic relationship with customers to increase the business and profitability. The

strategies employed CRM is aimed at mutual benefit to the customers and industries. It

creates deep and wide impact on customers and make in deep in roads in identifying the

lucrative move of the industries. From the Research Study, It is evident that CRM must be

implemented in the Banking Sector and the CRM process has to be systematic. The study

further reveals that demographic variables, initial strategies, CRM maintenance, Customer

Satisfaction, Technology on CRM are the important aspects that impact CRM. The study has

taken a wider view about CRM in public sector banks and private sector banks. The future of

Banking lies with the CRM strategies adopted by Banking Companies. To conclude, the

researcher would like to maintain that the relationship building with customers is now

accepted as over-riding goal of marketing and business as a whole and it applies to service

industries also.

Scope for the further research

The following studies have got the scope for the future researcher.

1. A comparative study of public and private sector banks in CRM practices.

2. A study on Customer Relationship Management Practices in Foreign Banks.

3. A comparative study on CRM practices in selected banks in India.

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