Customer Relationship Management System In Mauritian Bank Marketing Essay

Customer Relationship Management System In Mauritanian Bank Marketing Essay20 years nates Mauritius was a struggling to make its place in the Indian Ocean and to become recognized for its well established economy. At that time, non every radical condescension had the capital required to start and expand. This is where edges played an important role in our economy.At the then time, Banks did not fork out a proper online musical arrangement with their branches. Customers needed rendez-vous with Bank Managers before meeting with them. It was a glamorous time for swearers. Customers remained loyal to the buzzword.With the evolution in engineering and with Bank of Mauritius imposing on Mauritian banks to be Y2K compliant, bank moved towards the implementation of a proper Core Banking trunk to serve their nodes. And with the introduction of ATMs and online banking, nodes visit less and lesser their bank branch. The self-colored concept of banking has shifted. Customers now pre fer delivery channels instead of branch base banking. This perfect Banker Customer relationship slowly disappe bed as the nation grew, the customer started to work with different banks at the same time as the competitors kept on increasing.As per latest figures of Central Statistics Office there are curtly 21 financial banks in operation with a population of approximately 1.2 million out of which only 45 %( 548,300) are in the operative sieveWe need to contain in mind, though a bank needs clients deposit to work, its main profit leave alone be generated by credit facilities. This income bequeath be generated by those 45%. (Not taking into account a small percentage of offshore business)If our figures are correct, we have 21 banks that are fighting for 548,300 apply people and out of which two giant banks have been established since 1838 and in 1973 respectively.The aim of this search is to analyze the impact of Customer Relationship Management system in the banking sector an d how it canful befriend in customer retention, reduce deep in thought(p) opportunities and enhance midland process thus increasing profitability.The aim of this dissertation is not purely for academic purpose. There is currently a need to implement a proper Customer Relationship Management system (CRM) in the bank I am currently working.Table of Contents1.0 Introduction1.1 Introduction of the claimThe vision for all Mauritian banks is to be the best bank for customers to bank with.CRM is the concept of building a strong relationship with your customer and making sure that he comes back again by providing him with a eminent quality service.CRM is an integration of technologies and business processes utilise to satisfy the needs of a customer during both given interaction. More specifically, CRM involves acquisitions analysis and use of knowledge just about the customers in order to sell more(prenominal) goods or services and to do it more efficiently (Bose. 2002. Pg 1 )Cu stomers are now more than ever demanding a different relationship with their suppliers, managing a close relationship has become a central aspect in delivering the business goals (Xu, pine et al, 2002). With the increase in applied science available to customers to daytime the world has become a much smaller marketplace and the relationship an even more important selling aspect. Walton Xu (2005) explain that CRM is astray regarded as method of retaining and developing customers, through increased commitment and satisfaction.According to Drucker (1996) knowledge is the only meaningful resource and the only real competitive discriminator. Xu Yen et al (2002) further state that successful companies go away use customer information systems to build relationships on the aims that customers want them, and by organizing the information about individually customer a singular 360 degree view can be made of each client throughout the company no matter how many a(prenominal) customer s they have. Companies are also realizing they can more easily lock in customers by understanding their needs and competing with exceeded expectations, something which CRM systems can help organize (H. Kale, 2004).The realization of the benefits of CRM are also noted in the market of colligate software product, in 2008 the CRM market reached 8.9 billion USD and to increase by nearly 50% by 2012 (Gartner Group, 2008).The poll is to investigate how CRM will benefit the bank I am currently working with.1.2 Problem StatementI have been in the banking sector for more than 13 years and had held different positions starting from teller, officer and currently to be the Head of Business Solutions.Currently the bank has expanded and merged with another infant company, information and customer retention has become amongst others the center of motion. Currently we could note that data is being held in different systems and consolidation is a big headache. This has wedge on service delivery. Duplication of data and heaviness in process has strongly been felt within the organization. Currently the bank does not hold a proper CRM system to address most of these issues and to minimize missed opportunities. Having highlighted this, a proper CRM will help in achieving greater height by the organization.The centralise of most CRM systems according to Xu Yen et al.(2002) is to aid in the understanding of customers. By warehousing collected data about many different customers, forecasts of both customers proximo buying trends as well as individual customer behavior can be made.Customer Relationship Management can also help in breaking down the barriers between departments, something which can prove to be quite difficult, as in some firms there are even indistinct rivalries between departments (Edwards. 2007)1.3 Objectives of the StudyAs per Doran, G. T. (1981), we need to consider the following criteria when setting up the fair gamesSpecific Objectives are exclusively re lated to the business.Measurable The objective can be quantified. For e.g. Increase in profit amounting to Rs1 million instead of Higher profits.Agreed The parties who will be affected directly or indirectly by these objectives need to be informed and also have their consent.Realistic The objective should be challenging, but yet also be achievable.Time specific The objective should be delimited by time, having a specific start and end date.The following objectives have been identified for this studyIdentify the benefit bank already enforced CRM have obtainedDetermine the hurdles and barriers in implementing a proper CRMEvaluate the impact of CRM in the Mauritian Banking CommunityDetermine the benefit that bank will obtained in implementing a proper CRM1.4 research QuestionsThe research questions in this proposal shall include but not limited to the followingHow CRM has wedged on the internal process of banksWhat are the barriers and obstacle for implementing a proper CRMWhat a re the main benefit obtained for a proper implemented CRMHow far do bank staff agree on the benefit of a CRMBy how much has missed opportunities been reduced1.5 Hypotheses (Assumptions)The following hypotheses based on the objective of the study have been formulated surmise IHo Banks in Mauritius do not agree that CRM improves their internal processHA Banks in Mauritius do agree that CRM improves their internal processHypothesis IIHo Banks in Mauritius do not face any barriers and obstacles for the implementation of CRMHA Banks in Mauritius face barriers and obstacles for the implementation of CRMHypothesis IIIHo Banks Staff do not agree that CRM has ease their day to day tasksHA Banks staff do agree that CRM has ease their day to day tasksHypothesis IVHo Banks do not agree that CRM has reduced missed opportunitiesHA Banks do agree that CRM has reduced missed opportunities2.0 lit ReviewThe idea behind Customer Relationship Management is not untried even the earliest merchants knew it was a good idea to build relationships with customers to keep them coming back.(Jobber , 2004)Customer Relationship Management (CRM) is a business approach that integratespeople, process and technology to maximize relationships with customersBarton Goldberg, ISM, CRM Strategic Advisors.Jobber has stated the need for loyalty because it is customer loyalty that will go out that the repeated purchase in made with your business.According to Storbacka and Lehtinen(2001, p 5) the three main pillars of CRM are Customer economic value CreationViewing the product as a process and it is the business responsibility for developing customer relationshipsOffering customers the possibilities to create value for themselves.With the help of technology and human resources, CRM will help a business to gain insight into the behavior of customers and the value of those customers.For CRM to be effective and bear its fruits, an organization must excogitate an adequate business strategy that it will ha ve to follow.The organization must also look at the different ways information about customers comes into a business, where and how this data is stored and how it is currently used.With an effective CRM strategy, a business can increase revenues byProviding adequate services and products that are exactly what customers expectIncrease customer service takeInitiate cross sellingProvide the banks staffs with an extra tool that will help them increase businessRetaining existing customers.Bringing new customersPersonalized serviceTarget the right customer with the right productAggressive marketingAll elements are mixed in to increase and oblige greater business to customer relationships. CRM has an impact mostly on marketing, sales, and customer service strategies. CRM helps create time efficiency and savings on both sides of the business spectrum.Through correct implementation and use of CRM solutions, companies gain a better understanding of their strongest and weakest areas and how they can improve upon these.Therefore, customers gain better products and services from their businesses of choice.In any business, CRM will start from the Back office and will go throughout the whole company to reach the front office. It is nowa days a must to instal the customer at the center of the business.Customer experience is the sum total of all the interactions a customer has with your brand during his customer lifecycle. It has become the critical differentiator in todays hypercompetitive, hyper connected global marketplace.Differentiation based on product innovation is no longer sustainable because competitors can leapfrog feature/ power advantages more quickly than ever. And differentiation based on price kills profitability. On the other hand, research shows that 86 percent of consumers said they would be willing to buckle under more for a better customer experience.2011 Customer Experience Impact Report conducted by Harris InteractiveBeing now the Head of Business so lution of the bank, I found it suitable to perform this research in the Mauritian market for implementing a proper CRM solution in the bank ensuring that the bank reap its benefit.3.0 Research MethodologyThis section describes the methodology that will be followed to address the hypotheses or research questions. It includes the research design, sampling method, data collection procedures, research instrumentation and related data analysis.3.1 Research DesignResearch design provides the basic direction for carrying out a research project so as to obtain answers to research questions (Cooper Schindler, 2003). A descriptive research design will be adopted for this study since it involved collection of both qualitative and quantitative information by conducting a survey. The descriptive research design would therefore, make predictions and analyse the behaviour of the respondents with respect to the survey.3.2 Population and consume3.2.1 Target PopulationA population is considered to be any group of people, events, or things that are of interest to the researchers and that they wish to investigate (Sekaran, 2000). The target population for this study will include banks in Mauritius and staff working in the banking sector.3.2.2 Sampling MethodSampling is the process of selecting units (e.g. people, organizations) from a population of interest so that by studying the warning we may fairly derive our results back to the population from which they were chosen. Trochim (2006). It is therefore, important to adopt the entrance sampling techniques and to design the sampling method to minimise any error or response bias.The appropriate sampling technique that will be adopted for the study will be the wide random sampling technique so as to ensure that each officer has an equal chance of selection since a simple random sample is meant to be an unbiased representation of a group3.2.3 Sample SizeTo determine the sample coat we need to calculate the necessary the sampl e size for a different combination of levels of precision, confidence level (93%), and variability. The level of precision also called as the sampling error, is the range in which the true value of the population is estimated to be. This range is often expressed in percentage points, (e.g., 7 percent). A proportion of 0.07 indicates the maximum variability in a populationTherefore the Solvins formula, as described below, will be used to calculate the sample size at 7% level of precision.Where n is the sample size, N is the population size and e is the level of precisionHence the sample size for this study will be 68 on a population of 100.3.3 The research InstrumentThe research instrument for this study will include a structured questionnaire to elicit relevant information from the respondents employ primary and secondary sources of data.Questionnaires have advantages over some other characters of surveys in that they are cheap do not require as much effort from the questioner as v erbal or telephone surveys, and often have standardized answers that make it simple to compile data. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them.An open-end question asks the respondent to formulate his own answer, whereas a closed-ended question has the respondent pick an answer from a given number of options. For this paper, the questionnaire will include both open ended and closed ended questions. The close ended will comprise of dichotomous, multichotomous as well as likert scaled information.The questionnaire will consist of some main sections such(prenominal) asFirst section will demonstrate the barriers and obstacles in implementing CRMSecond section will point out the benefit obtained from CRMThird section will evaluate the impact of CRM in the Banking Community3.4 Data Collection methodThe choice of the data collection method is influenced by the data collection strategy, the type of variables i nvolved, the accuracy required, the data collection points and the skill of the enumerator. The links between the variables, its source and practical methods for its collection helped in choosing appropriate method. Therefore, for the data collection, the survey method will be adopted given that the survey involved a structured questionnaire given to respondents and designed to elicit specific information with respect to the objectives of the study.Moreover, the data will be gathered by scheduling a meeting with the different targeted organization where the questionnaires will be distributed to the different respondent and collected some days later to allow them to give the maximum information in a precise way.3.5 Validity and ReliabilityValidity is defined as the extent to which differences in observed scores reflect the true nature among objects on the characteristics being mensural and Reliability relates to consistency of results over a period of time. Hence, consideration rega rding robustness and reliability will be taken into account for this study.3.5.1 Pre testingPilot testing is used to identify and eliminate problems before the main survey takes place. 10% of the sample size will be used for pilot testing prior to the data collection phase. The pilot test will be used to check questions relevancy, whether respondent understands all questions, and logic of question order.3.5.1 Reliability of dataReliability of data is used to check for internal consistency of data which is measured using coefficient alpha (also known as Cronbachs alpha).According to George, D., Mallery, P. (2003), the acceptable level for the Cronbach alpha depends on what is being measured, with the general rule of thumb being 0.7. Therefore, for the purpose of this study a Cronbachs alpha of 0.7 or higher will be considered acceptable, and that below 0.75 was regarded as multidimensional3.6 Data Analysis and interpretationThe data file will then be organized and analysed employi ng the SPSS software version 16.0 or above. Both descriptive and inferential statistics will be used for analysis where descriptive statistics will include frequency, percentage, mean and standard deviation. Inferential statistics will include regression analysis, correlation, chi square, T-test, ANOVA.Significant tests will be conducted at 5% level using p-value as indicator for both substance and hypothesis testing whereIndicator for significanceP-value less than 0.05 = statistical significanceP-value greater than 0.05 = no significanceIndicators to be used for hypothesis testingP-value less or equal to 0.05 = reject unprofitable hypothesis (H0)P-value greater than 0.05 = do not reject Null hypothesis (H0)4.0 Expected ResultsThe following results might be expectedIt is expected that Mauritian Banks has benefited from CRMIt is expect that Mauritian Banks has faced barriers and difficulties in implementing CRMIt is expect that CRM has positively impacted on the internal process of Mauritian Banks.It is expected that number of customers has increased5.0 Ethical ConsiderationsIn order to protect confidentiality, the data collected will not be revealed to others except in the form of processed data/information without detailing the identity of the individual responses. Relevant permission will be sought-after(a) from the concerned authorities prior to administering the questionnaires.6.0 Limitation of this studyThe limitation of the study is that not all bank staff will responds due to time constraints. besides only banks where CRM has been implemented will be contacted. However, the data collected from respondents will be analyzed and interpreted within the limited framework allowed.7.0 ConclusionThis study will endeavor to demonstrate to my senior management the benefit in implementing a proper CRM in the bank in order to align back-office processes and to leverage the use of IT system. This proposal will quantify the impact on the business in terms of custo mer retention and new offerings possibilities while reducing missed opportunities. Definitely this study will bring a better insight on the capabilities of a CRM.Definitely greater profit would be achieved if the CRM is properly implemented and used.