An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City

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1 Journal of Ravishankar University, Part-A, 19-20, 54-62, ISSN An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City Archi Dubey a a Archi Dubey ( ), Institute of Management, Pt. Ravishankar Shukla University, Raipur. [Received: 15 November, 2014; Revised Received: 10 May, 2015; Accepted: 11 May 2015] Abstract In India as well as world banking system is the core of all financial activities including lending and depositing money, providing loans to institutions and private players and institutions. Banks are integral part of the service sector in India which went many transformational changes in last few decades due to privatization, technological up gradation, and changing in financial policies and procedures, increased completion etc. All these factors are putting tremendous pressure on the banks to perform better in order to survive in cut throat completion. This paper tried to identify the factors influencing the Customer Relationship Management practices (CRM) in Axis Bank in Raipur city. Total 150 samples were taken and correlation and mean scores were calculated to analyze the data. Study reveals that knowledge and experience of the staff, customer satisfaction, and customer service all have positive relationship with the customer loyalty. Suggestions are offered to improve relationship and maintain loyalty with the bank customers. Keywords: Customer Relationship Management; Customer Loyalty; Customer Satisfaction; Customer Service; Knowledge and Experience Introduction CRM means different things to different people. Scholars and practitioners defined this concept of CRM in different senses and different perspectives. Hence, many attempts have been made to define CRM in domain of philosophy, process, technology and capability. Customer relationship management is a relatively new and innovative practice in marketing which has replaced many traditional concepts of marketing by focusing and catering to 54

2 An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City individual needs and offering them tailor made products and services. Hence, now-a-days CRM has overtaken the market and going to put a revolutionary change in the market that brings a hope of entirely different and new future for marketers (Brown 2000) Simply CRM can be defined as attracting maintaining and enhancing customers relationship (Berry, 1983). Table- 1 shows various definitions of CRM. The two bases on which CRM implementation and CRM design depends are knowledge of customer and customer interaction Morgan and Hunt (1994) Hobby (1999) Kalakota and Robinson (1999) Table 1 Definitions of CRM CRM is all about marketing activities directed towards establishing, developing and maintaining successful relationships a management approach that enables organizations to identify, attract, and increase retention of profitable customers by managing relationships with them CRM means to allow all of the departments and employees to work for satisfying all of the customers demands. CRM is a set of system which integrates sales, marketing and after-sale services. Stanley and Brown (2000) Swift Ronald (2000) Bradshaw and Crash (2001) a business strategy to understand, anticipate and manage the needs of an organizations current and potential customers CRM is a iterative process that turns customer information into positive customer relations Management approach that involves identifying, attracting, developing and maintaining successful customer relationships over time in order to increase retention of profitable customers They further continued that CRM starts with the deep knowledge of the customer which further forms basis of developing and designing the marketing strategies to develop an endurable relationship with customers. Hence the primary purpose of the CRM practices is customer retention and Customer Loyalty and profit making. It is quite challenging to retain the customers for profit making and to increase the market share. Hence customer relationship management is an inevitable practice for banking and other service industries to acquire and retain the customers and to make them loyal. In this era of intense competition where customer is the king the ultimate strategy of the modern business is the customer centric approach. Stiff competition after privatization and changes in the needs and preferences of the customers puts a tremendous pressure on the banking industries to adapt 55

3 Dubey Customer Relationship management Practices. Customer profitability of the firm may improved by implementing CRM solution which can be measured by increased customer loyalty, reduced cost and customized offering (Khaligh et. al. 2012) Through the use of I.T. an intimated relationship can be created with customers by knowing them personally and contacted them (Gummerson, 1994). They further continued that CRM starts with the deep knowledge of the customer which further forms basis of developing and designing the marketing strategies to develop an endurable relationship with customers. Hence the primary purpose of the CRM practices is customer retention and Customer Loyalty and profit making. It is quite challenging to retain the customers for profit making and to increase the market share. Hence customer relationship management is an inevitable practice for banking and other service industries to acquire and retain the customers and to make them loyal. In this era of intense competition where customer is the king the ultimate strategy of the modern business is the customer centric approach. Stiff competition after privatization and changes in the needs and preferences of the customers puts a tremendous pressure on the banking industries to adapt Customer Relationship management Practices. Customer profitability of the firm may improved by implementing CRM solution which can be measured by increased customer loyalty, reduced cost and customized offering (Khaligh et. al. 2012). Through the use of I.T. an intimated relationship can be created with customers by knowing them personally and contacted them (Gummerson, 1994). Objectives of the Study:- 1. To study the relationship between the factors influencing the customer relationship management practices and customer loyalty in axis bank in Raipur city. 2. To analyze the most important and significant factor influencing customer relationship management practice in Axis Bank in Raipur city. 3. To give suggestive measures regarding betterment of CRM practices in Axis Bank in Raipur city. Review of literature Balakrishnan and Krishnaveni (2014) examined in their study to examine the level of satisfaction on customer relationship management practices in selected private sector banks. The study showed that the proper CRM practices will increases the customer satisfaction and 56

4 An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City develop relationship with existing and prospective customers by managing information and improves performance of delivering products and services at a great speed that facilitates customer creation and retention. Love Kumar Patwa and Kush Kr. Patwa (2014) in their study regarding Customer Relationship Management (CRM) performance of private sector and public sector bank showed the overlapping on customer retention between the Private and Public sector banks of Uttar Pradesh. Results showed that the Private Banks have been able to implement the CRM practices more effectively rather than public sector. Duygu Koçoğlu, and Sevcan Kirmaci (2012) found that customer relationship management affects customer loyalty in the banking sector. He observed CRM on the basis of Knowledge and experience of personnel, Customer satisfaction and customer loyalty. Kallol Das et al. (2009) studied 29 best practices and which may be helpful in deployment of CRM in banks. He found that there is no perfect bank which is applying all the practices hence there is no impact on customer loyalty. The Best practices were categorized under knowledge management, CRM Organization and Key customer Focus. Research Methodology To conduct the study, convenient sampling is applied in selecting the respondents from one of the private sector banks i. e. Axis Bank in Raipur City of Chhattisgarh. Primary data is collected through structured questionnaire from the sample of 150 customers of Axis Bank Raipur to know the factors influencing CRM practices In Axis Bank. The secondary data for the study was collected from the, websites. Magazines and books. The primary data thus collected were analyzed through correlation and mean for research questions and percentage analysis for demographic questions Figure-1 Research model 57

5 Dubey Five point Likert scale was used. To attain the research purpose four variables were used a. Knowledge and experience of the bank staff b. Customer satisfaction c. Customer service d. Customer loyalty Total 16 items were analyzed based on the three above mentioned variables and the questions were derived from Valijeva (2009) for CRM and Demimoren (2009) for customer loyalty. For pilot study 10% questions were taken. Following research model is proposed for the study Hypothesis H 0 1- Knowledge and Experience of bank staff shall not have any significant relationship with Customer Loyalty of axis bank Raipur. H 0 2- Customer Satisfaction shall not have any significant relationship with Customer Loyalty of axis bank Raipur. H03- Customer Services shall not have any significant relationship with Customer Loyalty of axis bank Raipur. Hypothesis interpretation H 0 1- Knowledge and experience of bank staff shall not have any significant relationship with Customer Loyalty of axis bank Raipur. The items from 1 to 5 (table 4) are regarding the first variable of the study i.e. related to knowledge and experience of the bank staff and the correlation value of as shown in the table is positive hence hypothesis H 01 is rejected i.e. there is significant positive relationship between Knowledge and experience of bank staff with Customer Loyalty of Axis Bank Raipur H 0 2- Customer Satisfaction shall not have any significant relationship with Customer Loyalty of axis bank Raipur. The items from 6 to 10 (table 4) are regarding the second variable of the study i.e. related to customer satisfaction and the correlation value of as shown in the table is moderate but positive hence hypothesis H 02 is rejected i.e. there is positive relationship between customer satisfaction and Customer Loyalty of Axis Bank Raipur 58

6 An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City H03- Customer Services shall not have any significant relationship with Customer Loyalty of axis bank Raipur. The items from 10 to 14 (table 4) are regarding the third variable of the study i.e. related to customer services of the bank staff and the correlation value of customer services as shown in the table is strong and positive hence hypothesis H 03 is rejected i.e. there is significant positive relationship between customer services of bank with Customer Loyalty of Axis Bank Raipur Data analysis Table-3 is showing that the variables knowledge and experience of staff, customer satisfaction, and customer service have positive and significant relationship with the customer loyalty. And simultaneously these factors are contributing towards the customer loyalty. Table-2 Demographic profile of the respondents Demographic Qualities % Age Gender Education Annual Income Occupation above Male Female High school Graduation Post- graduation Other Upto 1 lac 1-2 lac 2-3 lac Above 3 lac Student Self employees Private job Government service The mean scores regarding the factors indicated the extent to which the various CRM factors affect the Customer loyalty. In above table the mean scores of CRM practices vary from 3.76 to The factor sincerity and helpfulness of the personnel consists of the highest mean (3.72) and factor of not changing the firm easily consists of lowest mean (2.88). It is to be interpreted that the conformability regarding the factor influencing CRM practices in Axis bank is highest for Sincerity and helpfulness of personnel as compared to rest of the factors

7 Dubey Table - 3 Correlations among the variables of CRM practices and customer loyalty Variables Knowledge and experience of bank staff Customer satisfaction Knowledge and experience of bank staff Customer satisfaction Customer Service Customer Service Customer loyalty Table- 4 Mean Scores of factors of CRM practices in axis Bank Customer loyalty Item No. Customer Relationship Management Practices (items) Mean Scores 1 Sincerity and helpfulness of personnel Quick understanding and fulfillment of demand by personnel Easy language of personnel Knowledge and experience of staff Updating of firm regarding customer information Maintaining Good relationship with customers Update the customers regarding new products Reliability Handling of critical condition Prompt services Variety of service ATM related services and other facilities x7 Telephonic services Recommendation of the firm to others Feeling of loyalty Do not change the firm easily Service of the firm meets customers need 3.11 Result The analysis of the above study showed that all the variables Knowledge and experience of bank staff, Customer satisfaction and customer service have positive relationship with the customer loyalty. It was also found that the sincerity and helpfulness of the personnel of the bank (mean score 3.76) is the most influencing customer relationship management factor towards customer loyalty while not changing the firm easily (mean score-2.88) is the least influencing customer relationship management factor towards customer loyalty. 60

8 An Empirical Study of Customer Relationship Management Practices in Axis Bank with Reference to Raipur City Limitations of the study This study is limited to customers of the Axis bank, one of the private banks in India but the study was conducted in Raipur city, which may not be able to give true picture and generalized result. This study is conducted to small sample size i.e. 150 which represents the whole population of users of Axis bank of CRM practices. The time period may be constraints as the results may change with the future period of time. The non-co-operative nature of the respondents and their biasness towards the banks may again create a limitation towards research. Conclusion and suggestions of the study The key purpose of this study is to investigate the factors influencing the CRM practices in axis bank in Raipur city. Knowledge and experience of the bank staff, customer satisfaction and customer loyalty were determined as the key factors. The ultimate aim of the CRM practices is to make the customer retention and customer loyal. This study shows that if customers are satisfied and personnel are experienced and knowledgeable then also it would not be able to make its customers loyal. In this study satisfied customers agree that they will not recommend this bank to others, they might change the bank and this bank does not meets the requirement of the customers hence do not create the loyalty among customers. To make the customers loyal bank should do the following practices- a. Anticipate and understand the needs and requirement of the customers and then offer them products and services. b. Provide them personal attention and care while serving them. c. Effective grievance handling system and empathetic vision towards the customers. d. Better service quality than competitors. e. Attention to the customers etc. f. Positive behavior of the staff and friendly cooperation in enquiry counter. g. Timely interaction and communication with the customers etc. h. Developing innovative products and services for the customers to offer them differentiate services than competitors. 61

9 Dubey References Afsar Bilal, Determinants Of Customer Loyalty And Proposing A Customer Loyalty Model For The Banking Sector Of Pakistan. Balakrishnan H. & Krishnaveni R. (2014), A Study on Customer Relationship Management Practices in Selected Private Sector Banks with Reference to Coimbatore District, The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 2, No. 1, January-February Bradshaw D., And Crash C., (2001),, Managing Customer Relationships In E-Business World, How To Personalize Computer Relationships For Increased Profitability, International Journal Of Retail And Distribution Das Kallol, Parmar Jitesh and Sadanand Vijay Kumar (2009). CRM Best Practices and Customer Loyalty- A study in Indian retail Banking, European Journal of Social Science, Vol.11 No.1pp Kalakota, R. and Robinson, M., (1999), e-business: Roadmap for Success, Addison- Wesley, pp Khaligh Alireza Abdolhosseini, Miremadi, Alireza, Aminilari Mansoor (2012), The impact of e CRM on loyalty and retention of customers in Iranian Telecommunication Sector, International Journal of Business and Management, Vol. 7, No.2. Koçoğlu Duygu and- Kirmaci Sevcan (2012), Customer Relationship Management And Customer Loyalty; A Survey In The Sector Of Banking, International Journal Of Business And Social Science Vol. 3 No. 3; February Morgan, R., And Hunt, S., (1994), The Commitment Trust Theory Of Relationship Marketing, Journal Of Marketing, Vol.58, pp Patwa Love Kumar, Patwa Kush Kr, An Analytical Study of CRM Practices in Public and Private Sector Banks in the State of Uttar Pradesh, Pacific Business Review International Volume 6, Issue 7, January Stanley A. Brown (2000), Customer Relationship Management: A Strategic Imperative in the World of E-Business, John Wiley and Sons, Canada, Ltd. Swift Ronald S., (2000), Accelerating Customer Relationship Using CRM and Relationship Technologies, Prentice Hall, Inc. 62