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Successful CRM Implementation in Banks Essay


Introduction

Despite the growing awareness of the importance of customer relationship management, no empirical evidence exists of its successful implementation methods.

Objectives

The following paper analyzes the study of CRM implementation model to determine the important success factors and identify the expected outcomes.

Summary of the Article

The article explores the effect of customer relationship management (CRM) implementation in the banking sector. The study examines the sample of 159 banks and establishes its positive effect on completing marketing objectives.

Based on the literature review, the authors create a generic conceptual model that encompasses a variety of critical success factors (CSFs) required for successful CRM implementation. They are arranged in three groups, with each one bound to a specific stage of CRM organization. The first group includes factors present at the initial stage of implementation and responsible for the facilitation of the planned change. They are termed CRM enablers and include operational factors (e.g. selection of appropriate software), tactical factors (e.g. employee training), and strategic factors (e.g. identification of the specific areas of data collection relevant to the market segment).

The second category encompasses the factors which can be used as indicators of the positive effect of CRM – namely, relationship quality, transaction quality, and reduced cost. Finally, the third category is termed CRM success and centers around customer retention. Importantly, the relationship between the factors within the model is neither successive nor vertical – instead, the factors are interrelated. For instance, according to the formulated hypothesis (and confirmed by the findings), the CRM-enabling factors influence not only the intermediary stage but to have an observable direct effect on customer retention. It is also important to note that while the study does not determine the possible relationship between the factors within each group, there is evidence of influence each factor has on subsequent stages of CRM success. Finally, it is important to mention that the proposed model does not prioritize any of the said groups and instead takes a holistic approach – i.e. all of the factors are suggested for synergic implementation rather than in a step-by-step manner.

According to the research hypothesis, the ultimate expected outcome of the implementation of the described model is the increase in customer retention. The study results confirm these allegations and illustrate the benefits of the holistic nature of implementation – for example, each CRM enabling factor category shows a relatively similar relationship to each of the effectiveness factors of 56 to 60 percent. Therefore it is possible to expect a mutually supportive and self-sustaining quality of a holistic implementation. For instance, the involvement of top management segments in the process will ensure the prioritization of customer orientation in organizational operations and at the same time allow for better management and focus of employee training programs. Both activities will eventually create a more customer-oriented environment which displays consistency and integrity in customer-oriented operations and, by extension, result in improved customer satisfaction.

According to the article, on the average, the combined effect of the operational, strategic, and tactical factors is responsible for approximately 60 percent of CRM success (in our case – customer retention). Interestingly, the individual relations vary greatly (e.g. impact of strategic factors’ negligible impact), but are equalized once the indirect connections are accounted for. The success is based on the fact of gaining a better understanding of customer needs, establishment of reliable communication channels, and the resulting ability to communicate with the customer base more effectively. Therefore, the implementation of CRM in banking industry leads to far more favorable results when applied holistically.

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IvyPanda. (2020, November 18). Successful CRM Implementation in Banks. Retrieved from https://ivypanda.com/essays/successful-crm-implementation-in-banks/

Work Cited

"Successful CRM Implementation in Banks." IvyPanda, 18 Nov. 2020, ivypanda.com/essays/successful-crm-implementation-in-banks/.

1. IvyPanda. "Successful CRM Implementation in Banks." November 18, 2020. https://ivypanda.com/essays/successful-crm-implementation-in-banks/.


Bibliography


IvyPanda. "Successful CRM Implementation in Banks." November 18, 2020. https://ivypanda.com/essays/successful-crm-implementation-in-banks/.

References

IvyPanda. 2020. "Successful CRM Implementation in Banks." November 18, 2020. https://ivypanda.com/essays/successful-crm-implementation-in-banks/.

References

IvyPanda. (2020) 'Successful CRM Implementation in Banks'. 18 November.

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