EVOLUTION OF THE CONCEPT
In the early 1990s the concept of
relationship marketing was formally introduced into the
field of service marketing. And further the concept was also
found applicable in the case of industrial as well as
consumer products. As the concept of relationship marketing
has emerged the focus has been shifted from transaction
marketing to relationship marketing as under:
Transaction marketing - Relationship
Marketing
* Focus on single sale - * Focus on customer retention
* Orientation on product features - * Orientation on product
benefits
* Little emphasis on customer - * High customer service
emphasis
Service
* Limited customer commitment - * High customer commitment
* Moderate customer contact - * High customer contact
* Quality is primarily a concern - * Quality is concern for
all.
Of production - (TQM ).
NEED FOR RELATIONSHIP MARKETING
The aim of relationship marketing is
to create strong, lasting relationship with core group of
customers. It is to a firm's advantage to develop long term
relationship with existing customers because it is easier
and less expensive to make an additional sale to an exiting
customer than to make a new sale to a new customer.
BENEFITS OF RELATIONSHIP MARKETING
The relationship marketing helps the
customer on one hand and the service provider on the other
hand.
The benefits which are associated
with the customers are:
Customers remain loyal and receive
more value compared to the competitors.
Customers have the sense of well being and quality of life
as they have long term relationship with the service
provider.
Customer think that the service provider knows their
preferences and have tailored services to suit their needs
over a period of time and they do not want to change this
arrangement they have remain loyal.
The benefits for the service
producers are:
Due to good relationship
management the service provider gets committed and loyal
customers, thus increasing the purchases, which in turn
increase the profits of the company.
Lower cost retaining the current customers cost much lower
than making new customers as new customers attract
advertising cost and other promotional costs, operating
costs of setting up accounts and systems and cost of getting
to know the customers.
Free advertising through word of mouth.
It is easier for the firm to retain the employees when the
company has stable base of satisfied customers. CONSTRAINTS
OF CRM
CRM is not panacea for all marketing
maladies. It has its own constraints.
CRM is not for everyone. When the
market consists of a myriad of customers and the unit profit
margins are not much, for instance selling washing powders,
basic marketing is enough. CRM is an apt strategy when
customers are of long-time horizons and profit margins are
much.
CRM assumes that customers play a passive role in
relationships. But in the networked world, they have the
ability to play an active role in managing relationships.
Now a-days the marketing is towards collaborative marketing,
in which the company collaborates with customers and makes
them an integral part of the company's marketing activities.
CRM is mainly based on customer databases. The collection
of data and storage of data for CRM comes in handy only.
When the data collected is accurate and appropriate, is
collected at a reasonable cost, analysed diligently,
reported promptly in a lucid manner and kept secret from
competitors. Simon London opines, "Data have little value on
their own: They are useful only when they have context and
relevance."
(2) RELEATIONSHIP MARKETING IN
BANKING SECTOR
Introduction
In the past, customers were simple
persons and were happy at whatever banks dished out to them.
Over a period of time with the competition and technological
improvements customers have become fully aware of their
rights. They now demand nothing short of excellent and
prompt services. And further expect improvements there on.
In fact over a period of time customer service has become
customer satisfaction and customer delight and it can be
said what they look forward to now is customer ecstasy.
Umpteen alternatives are available to enlightened customers
and they choose only those banks that they consider best
suites them.
Why customer Service?
A customer is the most important
person who visits the premises of a bank. He is not
dependent on the bank - rather the bank is dependent on him.
He should not be considered as a rude interruption in work.
Rather he is the purpose of the work. Further it must be
realised that:
(a) It takes months to find and get
a good customer but only seconds to loose one.
(b) It is easier to rectify a mistake than to go on arguing
on a mistake with a customer.
(c) A satisfied customer brings in more customers and he is
the best advertisement for the back.
Initiatives by Banks
Of late, banks have been taking a
plethora of initiatives to reorient their basic customer
service ethos. These include
Emphasis on process reengineering
for improving customers' terms of transaction.
Shift from 'cost plus' pricing to competitive pricing of
services.
Progressive IT application for swift delivery channels
Universal service obligation by creating 'bank within a
branch' concept.
Improving value chain for customers.
Pursuit of TQM at operational and administrative units.
Three pronged strategy of product innovation, product
delivery and product servicing
Focus on product augmentation as well as hybridization.
Shift from a "selling" to "marketing" mode.
Multiple platforms for swift redressal of grievances.
Periodical rating of service quality in house as well as
by external agencies. Enrichment of training calendar,
with sharp focus on behavioral aspects of customer service.
Effective CRM: The Task Ahead
Any bank aspiring to grow in size,
diversity, profitability and clientele base must adopt a
four fold strategy. These relate to
1. Acquiring new customers more cost
effectively.
2. Increasing revenues from existing clientθle.
3. Increasing retention rates, especially among high value
clients.
4. Reducing the cost of sales and servicing.
Suggestions
For a better customer service, banks
should emphasis on :
Increasing the volume of business
by extending working hours with the use of technology
Widening the clientθle base by providing anywhere, anytime
and any channel banking service to the customers.
Increasing the number of delivery channels like ATM
banking, phone banking etc.
Improving service quality and operational efficiency.
Improving management information system to use data as a
business intelligence fool.
Enhancing cross selling of products to existing customer.
Service culture is to be developed among the staff. Human
Resource Development standards should be maintained in the
recruitments at all levels.
Conclusion
Banks, in the days to come, have to
provide their broad based service package in the midst of
stiff competition. To ensure their competitive edge in
future they have to fight with rivals in terms of quality of
their service. The challenges that lie before the bankers
are four fold. First, they need to satisfy customer needs
that are complex and difficult to manage. Second, they need
to face up to increased competition from within the sector
and from new entrants coming in to the financial sector
market. Third, they need to address the demands based in
supply chain. Finally they must continually invent new
products and services to attract and retain the customer.
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