assignment of MFS

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HOME WORK -2Marketing of Financial Services

Topic:- Comparative analysis of the CRM strategies adopted by one Public sector bank, one

private sector bank and an insurance company.

Submitted to: - Submitted by:-

Ms. Shubhda Arora Puneet Soni

Lec. In LHSB«. Q1808A05

B.B.A(hons.)M.B.A



Introduction to C.R.M.

The term ³CRM´ stands for Customer Relationship Management. Customer relationship

management (CRM) is a broadly recognized, widely-implemented strategy for managing and

nurturing a company¶s interactions with customers, clients and sales prospects. It is a process

or a methodology used to learn more about customers' needs and behaviors in order to

develop stronger relationships with them. CRM is as a process that will help bring together

lots of pieces of information about customers, sales, marketing effectiveness, responsiveness

and market trends. This process helps businesses use technology and human resources to gain

insight into the behavior of customers and the value of those customers. It involves using

technology to organize, automate, and synchronize business processes principally sales

activities, but also those for marketing, customer service, and technical support. The overall

goals are to find, attract, and win new clients, nurture and retain those the company already

has, entice former clients back into the fold, and reduce the costs of marketing and client

service. When an implementation is effective, people, processes, and technology work in

synergy to increase profitability, and reduce operational costs.

Phases of C.R.M.

The three phases in which CRM can help to support the relationship between a business and

its customers is explained below:

y Acquire: A CRM initiative can help a business in acquiring new customers through

excellent contact management, direct marketing, selling and fulfillment.

y Enhance: A web-enabled CRM combined with customer service tools offers

customers excellent service from a team of trained and skilled sales and service

specialists, which offers customers the convenience of one-stop shopping.

y Retain: CRM software and databases enable a business to identify and reward its loyal

customers and further develop its targeted marketing and relationship marketinginitiatives.



Strategy of C.R.M

Choosing and implementing a system is a major undertaking. For enterprises of any

appreciable size, a complete and detailed plan is required to obtain the funding, resources,

and company-wide support that can make the initiative successful. Benefits must be defined,

risks assessed, and cost quantified in three general areas:

y Processes: Though these systems have many technological components, business

processes lie at its core. It can be seen as a more client-centric way of doing business,

enabled by technology that consolidates and intelligently distributes pertinent

information about clients, sales, marketing effectiveness, responsiveness, and market

trends. Therefore, before choosing a technology platform, a company needs to analyze

its business workflows and processes; some will likely need re-engineering to better

serve the overall goal of winning and satisfying clients. Moreover, planners need to

determine the types of client information that are most relevant, and how best to

employ them.

y People: For an initiative to be effective, an organization must convince its staff that

change is good and that the new technology and workflows will benefit employees as

well as clients. Senior executives need to be strong and visible advocates who can

clearly state and support the case for change. Collaboration, teamwork, and two-way

communication should be encouraged across hierarchical boundaries, especially with

respect to process improvement.

y Technology: In evaluating technology, key factors include alignment with the

company¶s business process strategy and goals; the ability to deliver the right data to

the right employees; and sufficient ease of use that users won¶t balk. Platform

selection is best undertaken by a carefully chosen group of executives who understand

the business processes to be automated as well as the various software issues.

Depending upon the size of the company and the breadth of data, choosing an

application can take anywhere from a few weeks to a year or more.



C R M i iti ti t B

t t B i it t i i i li :

y Personal Bank ing

y NR Servi es

y Agr i lt re

y International

y Corporate

y SM

y Domesti Treasurer

C R M and SBI li e

Need for CRM

The need for system automation became cr itical at SBI Life Insurance. The challenge was to

meet the demanding service and fulf illment levels of the growing insurance sector.SBI Life

was on the lookout for a technology solution that was easy to implement costeffective and

robust to expand its presence in the insurance sector and achieve a higher degree of service

differentiation. Although the organi ation had a centrali ed system, most of the work was

done manually. They needed client/server architecture in place. But it was not integrated with

the legacy systems.

Ear ly on, the top management reali ed that technology was a crucial dr iver for product and

service delivery. Although using the extensive SBI group platform for cross-selling products

and services was a viable option, reaching and engaging the customer cost effectively

required a technology backbone. The por tal initiative star ted sometime in 2003. Ear lier, the

insurance ma jor had little enterpr ise sof tware to suppor t its business and the processes were

carr ied out in an ad hoc manner. The system went live in 2004, tak ing just four to f ive months

to go online.

It was clear as far back as 2002 that a durable and scalable system was going to be essential,

and it was felt that a Web por tal would be the best solution as a par t of SBI¶s CRM initiative.



Various options were taken into consideration-recreating their entire operations in-house,

allowing a vendor to provide the basic platform and then build applications on it, etc. SBI

also spoke to some leading providers in the industry, did some spadework, and finally

decided to go for BE A WebLogic.

Benefits of CRM in SBI Life

y Reduction in TAT (Turn Around Time)

y SBI Life can now integrate and manage content, campaigns and merchandising to

patrons via the Web

y Streamlined product delivery and support processes with a single contact point on the

Web

y Site offers a one-stop-shop for customers' insurance needs

The insurer was looking at a system that would be up and ready in the shortest span of time,

in a stable manner, and roll out business-critical applications. The other concern for SBI Life

was connectivity; it decided to use the Internet to tackle the problem of linkage across

locations in India. (SBI has a network of over 9,000 branches.) Since laying out the network,

application and infrastructure is time consuming and not very cost-effective, using the

Internet fits perfectly into their scheme of things.

When looking for vendors SBI sought cutting-edge technology that did not cost the earth.

Another important issue was support. Typically, Indian service providers do not have the

capability to deliver the required services. They believe that the product by itself should be

mature enough to manage both its own complexity as well as that of the business, and also

offer ease of use for those who work on it. Most importantly, the vendor had to have a

roadmap extending well into the future.

In India, many implementations are not up to the mark due to cultural aspects of business.

Acceptance among staff and familiarity of employees with the system were two of the things

we considered before they decided to go in for a full-fledged implementation.



There were hiccups as various centers had problems connecting to the CRM portal, which

have been solved. They are using multiple types of connectivity, leased lines that terminate at

the central data centre in Mumbai, broadband connections, dial-up connections, telephone

lines, etc. The type of connectivity depends on the number of users in that particular branch

and the kind of work being done there.

Outcome: Saving time and money

Process improvements are evident. All of this happened with minimal system changes

without adding to the existing infrastructure. As a result, SBI has been able to decentralize 36

branches. The solution has also brought down by 50 percent the time taken for specific

processes like cash management, insurance claims, and accounting. The insurer has managed

to save about 30 percent of costs on infrastructure, with better utilization of manpower.

Unlike separate frameworks for integration and custom application development, the BEA

solution was a model that enabled faster customization and development of applications.

With almost 30 functions already running on the site, they feel that in future the portal has the

capability to scale up to handle a much bigger transaction load. The company is to add

applications in a phased manner, and is looking at service oriented architecture (SOA) in the

future. They are still adding new functionalities, and with an SOA they can maintain the

value provided to our customers while minimizing investments in maintenance and

development.



C.R .M. initiatives at HDFC

A bout HDFC

Promoted in 1995 by Housing Development Finance Corporation (HDFC , India's leading

housing f inance company, HDFC Bank is one of India's premier banks providing a wide

range of f inancial products and services to its over 11 million customers across over three

hundred cities using multi ple distr i bution channels including a pan-India network of

branches, ATMs, phone bank ing, net bank ing and mobile bank ing. Within a relatively shor t

span of time, the bank has emerged as a leading player in retail bank ing, wholesale bank ing,

and treasury operations, its three pr inci pal business segments. The bank's competitive

strength lies in the use of technology and the propensity to deliver wor ld-class service with

rapid response time. Over the last 13 years, the bank has been successfully able to gain

market share in its target customer franchises while maintaining healthy prof itability andasset quality. As on December 31, 2007, the Bank had a network of 754 branches and 1,906

ATMs in 327 cities. For the quar ter ended December 31, 2007, the bank repor ted a net prof it

of R s. 4.3 billion, up 45.2%, over the corresponding quar ter of previous year. Total deposits

were R s. 993.9 billion, up 48.9% over the corresponding quar ter of previous year. Total

balance sheet si e too grew by 46.7% to R s.1.3144 billion.



The challenges:-

y With HDFC Bank¶s success and rapid growth, it needed an effective way to increase

customer profitability through deeper, stronger customer relationships.

y

It also needed a way to detect important events in a customer¶s life so that targeted

communications could be sent at the right time to build relationships and increase

profit.

y A central, automated process was required to access data across systems as well as

plan, design, test, optimize and execute marketing efforts across channels including

direct mail, email, SMS and call centers.

C.R.M. solution

y After evaluating several vendors, HDFC Bank selected Unica¶s Affinium solution for

enterprise marketing management.

y Affinium was chosen for its ease of use, quick implementation as well as its robust

modeling, customer analysis, and right-time interaction management capabilities.

y For instance, Credit card activation

y In order to boost credit card activation by a goal of seven to 16 percent, a targeted

multi-channel, multi-wave campaign has been designed. As ten days after a new

cardholder is approved, inactive members are identified.

y These members are then segmented into distinct groups and are sent targeted offers

via email, SMS or direct mail which vary from product

y For cardholders who don¶t respond to the offer in the first wave, a second

communication with a different offer is sent.

y This campaign automatically runs every ten days, in order to make sure new inactive

card members are identified and communicated with on a timely basis.

Results:-

y With Affinium, HDFC Bank has boosted customer retention by four percent, and

executed acquisition campaigns, which resulted in reduction of acquisition cost by 60

percent due to effective targeting and channel optimization.



y Following the implementation of Affinium, the campaign volume increased by over

200 percent

y Lastly, the credit card activation campaign has achieved an incremental activation rate

of 30 percent compared to activation efforts without predictive modeling. Debit card

early activation program resulted in incremental response of five percent over the

normal activation rates.

V bV facility for HDFC customers:-

y HDFC Bank has introduced Verified by Visa (V bV) facility for all its credit and debit

cardholders.

y V bV is a global program by Visa, based on 3-D secure technology, for identifying and

authenticating cardholders when they purchase on the Internet.

y It allows cardholders to create a secret password, which they require to authenticate

the payment and complete the transaction when shopping online.

y The bank also offers its cardholders NetSafe, a virtual card through which they can

shop online without revealing their card number.

y HDFC uses the data bases in its varied ways. They get the data from the various

companies and formulate the offers keeping in mind the needs and the usage of the

customers. For eg. HDFC Bank Gold Credit Card.

Offers:-

y Exclusive travel benefits only on HDFC Bank Gold Credit Card.

y 5% Cash back on domestic air ticket bookings through domestic airline websites.

y 5% Cash back on rail ticket bookings through irctc.co.in. Free Airmiles across leading

airlines on redemption of reward points. Get 5% CashBack* on railway ticket

booking through IRCTC on HDFC Bank Gold and Value Plus Credit Cards

RAP computer technology integration:-

y The bank is currently working on a customer data model that covers over 6,000

fields, which should allow it to have one comprehensive and intelligent view of its

customers.



y With regard to operational CRM, HDFC Bank has brought online its RAP Computer

Telephony Integration (CTI) initiative for the bank's 14 contact centers, which service

as many as 650,000 actual calls per month.

y The system gives the bank's contact center agents a view of data most often needed

in standard customer interactions.

y The RAP CTI system pulls the select data from various screens in the host and

makes it available as the agent picks up the call.

y With the new system, the agent does not need to toggle between data sources any

longer. If the agent were to toggle, it would affect the customer experience and adds

to the call time.

y The agent is also able to see outstanding offers. The bank has populated the host

system with offers available for qualified customers.



CRM OF ICICI BANK:-

GETTING PERSONALIZED INFORMATION ON CUSTOMERS:- The bank collects all

the information about the customers for processing. ICICI bank has mainly 4 service

offerings viz: loan account, saving account, current account and fixed deposits. Moreover, the

bank has many customers in each category. So, they collect the data on one server and thus

the company gets the personalized information on each customer by asking them to fill the

information in customer application form.

CUSTOMIZED OFFERINGS TO THE CUSTOMER:- The step which comes after deciding

the value of the customer is that the company offers the person the customized product.

Moreover, they also practice a concept called cross- selling over here. Cross ± selling refers

to offering another product from the service offering of the bank to the customer which he

has not gone for. Example If customer has saving account with the bank then we offer him

loan, insurance and other investments.

CONVERTING A PROSPECTIVE CUSTOMER INTO A TRUE CUSTOMER.:- The last

approach of CRM according to ICICI bank is that they try to convert the prospective

customer into a true customer. Right from the moment the inquiry comes, they follow- up the

customer and then make him to come to the bank occasionally and then regularly.

The processes for delivering CRM The tools and the processes are as follow ±

y

Customer application form

y Centralized software where the whole data is collected.

y Wide range of offering.

y Cross ± selling and

y Feedback forms

Customer application forms:- Bank collects all the data from customer application form and

gets the personalized information to know which product to offer to which customer. This

process helps in collecting the data and knowing what the customer wants.

Centralized software where the whole data is collected. The data collected through customer

application forms is available at one server and can be accessed anytime, anywhere. So, this

helps in the further process of customized offerings and cross ±selling.



Wide range of offering :- After collecting the data from the customer, team decides what

product to offer to which customer. In case the bank recognizes you as a valuable customer

then is offers a more customized service.

Cross ± selling :-It refers to offering another product from the service offering of the bank to

the customer which he has not gone for. For example If customer has savings account with

the bank then they offer him a insurance, fixed deposits etc. This depends on the value of the

customer to the bank. Cross selling is not offered to every customer. It depends on how loyal

the customer is to the bank. The more business he gives us, the more are his chances of being

special services offered.

Feedback forms:- The bank distributes feedback forms at all its branches. The customer

feedbacks on the service, technology used, employee behavior and promptness in solving

customer¶s problems, are taken and they are analyzed.

DIFFERENT CHANNELS FOR ACCESS SER VICES

Bank Branch, ATM Phone Banking, Internet Banking, Insta Banking, Mobile Banking,

Call Centre

BANK BRANCH

You can find a host of ICICI retail products at our widespread Bank Branch network-Bank

Accounts, Credit and Debit cards, Bonds, Demat Accounts, Loans against Shares, etc.

ATM NETWORKS

y

More than 3500 networked ATMs across the country.

y Make balance enquiries.

y Make cash withdrawals

y Free access to all ATMs

y Trilingual ATMs



y Payee name available on the Mini statement.

y Mini statement shows last 10 transactions

y Ledger Balance available in Mini statement.

PHONE BANKING

y 24 hour manned Customer Care Center

y Interactive Voice Response (IVR) facility available.

y Bill pay requests

y Stop payment request

y Balance enquiries

y Give standing instructions for payments

y Open a Fixed Deposit

y Dial ± a ± draft

INTERNET BANKING

y Payment of Utility Bills-electricity, phone etc.

y Online Railway ticket booking

y 3-in-1 Demat Account

y Inter Bank funds transfer (available in select cities)

y Third party transfers

y Credit Card bill payments

y Enable mobile banking alerts

Importance of Internet Banking for customers Bill payments:-

You can pay your bills like electricity, telephone, gas etc, mobile phone bills and insurance

premium bills etc online, or through phone banking. Just log on to icicibank.Com or call the

phone banking number to do the same.

y Check the status of the payments made

y Query on all the bill payments made by you

y The bill pay service is absolutely free of cost.



Mobile Banking

y ICICI bank mobile banking enables you to bank while being on the move

y .ICICI bank mobile banking can be divided into two broad categories of facilities:

Alert facility: ICICI bank mobile banking alerts facility keeps you informed about the

significant transactions in your accounts. It keeps you updated wherever you go.

y Request facility: ICICI bank mobile banking requests facility enables you to query for

your account balance.

INSTA BANKING

ICICI Bank¶s ³Insta Banking´ enables you to conduct banking transactions anytime from

anywhere. You can avail of this anywhere-Anytime banking service through our 24-hour

channels like ATM, Internet Banking, Instant Voice Response (IVR) Banking and Mobile

Banking, and from 8 a.m. to 8 p.m.

These unique and user-friendly channels have brought banking services to your fingertips.

From balance enquiry to checking cheque status to ordering a new cheque book, you can

communicate with ICICI Bank from the comfort of your home or in the middle of a busy

day at the office.

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