The biggest management challenge in the new millennium of liberalisation and globalization for a business is to serve and maintain good relations with the king-the customer. In the past, producers took their customers for granted because at that time customers were not demanding nor had many alternative sources of supply or suppliers. Since he was a passive customer, the producer dictated terms and had little customer commitment. But today there is a radical transformation. The changing business environment is characterised by economic liberalisation, increasing competition, high consumer choice, enlightened and demanding customer, more emphasis on quality and value of purchase.
All these changes have made today's producer shift from traditional marketing to modern marketing. Modern marketing calls for more than developing a product, pricing it, promoting it and making it accessible to target customers. It demands building trust, a binding force and value added relationship with the customers to win their hearts. The new age marketing aims at winning customers for ever, where companies greet the customers, create products to suit their needs, work hard to develop life time customers through the principles of customer delight, approval and enthusiasm.
WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT ( CRM )
The process of developing a cooperative and collaborative relationship between the buyers and sellers is called customer relationship management shortly called CRM.
CRM aims at focusing all the organizational activities towards creating and maintaining a customer. CRM is a new technique in marketing where the marketer tries to develop long term collaborative relationship with customers to develop them as life time customers. CRM aims to make the customer climb up the ladder of loyalty.
CUSTOMER FOCUS IN BANKING SERVICES
As the intense competition becomes a way of doing business, it is the customer who calls the shot in deciding the nature of products and services offered in the market. The customers are becoming demanding, dominant and selective. In fact the perceptions and the expectations of the customers have undergone a sea change, with the availability of banking services to the customers at their door steps through the help of technology.
Marketing of customer services aims at two important goals: prosperity to the bank and satisfied customers. Banks offer tangible services like loan schemes, interest rates and kinds of account and the intangible services like behavior and efficiency of staff, speed of transactions and the ambience. The banks may need to include customer oriented approach or customer focus in their five areas of businesses such as Cash accessibility, asset security, money transfer, deferred payment and financial advices.
There are four strategies available to customer relations' managers:
o To win back or save customers
o To attract new and potential customers
o To create loyalty among existing customers and
o To up sell or offer cross services.
The future of banking business very much depends upon the ability of the banks to develop close relationship with the customers. In order to develop close relationship with the customers the banking industry has to focus on the technology oriented innovations that offer convenience to the customers. Today customers are offered ATM services, access to internet banking and phone banking facilities and credit cards. These have elevated banking beyond the barriers of time and space.
MARKETING OF BANKING SERVICES
Marketing of banking services means organizing right activities and programmes in rendering right services to the right people at the right place, at the right time at the right price and with right communication and promotion. Marketing of banking services embrace the following unique features
o Intangibility-they cannot be seen or possessed physically but can only be experienced.
o Inseparability-their production and consumption occur simultaneously.
o Variability-they are highly variable depending on the merit of customers.
o Perishability -they cannot be stored.
"Change" is a continuous process and banking industry is no exception to this natural law. Change in the Indian banking industry is inevitable due to the implementation of the financial sector reforms and policies in the country. The main objective of financial sector reforms is to promote an efficient, competitive and diversified financial system in the country. Indian banking industry has undergone tremendous transformation after liberalization and globalisation process initiated from 1991. These changes have forced the Indian banking industry to adjust the product mix to effect the rapid changes in their process to remain competitive in the globalised environment.
COMPETITION FROM FOREIGN BANKS AND NEW PRIVATE SECTOR BANKS
The entry of more and more foreign banks and new private sector banks, with lean and nimble footed structure, better technology, market orientation and cost effective measures, have intensified the competition in the Indian banking industry. Financial Institutions have also started entering into the domain of banks. In recent years, the share of business of public sector banks has declined considerably. So there is a compelling need for the Indian banking industry to modify its marketing strategy to attract the customers and to withstand the stiff competition from foreign banks and new private sector banks.
The advent of technology both in terms of computers and communications has drastically altered the methodology of banking business. In the banking sector, the technology has opened new vistas and in turn has brought new possibilities for doing the same work differently and in a most cost-effective manner. Technology helps to have 24 hours a day banking, all seven days in a week. Tele banking, Internet banking and E-banking have opened new business potentials and opportunities which hither to remained unexplored. All these technological advancement may pave the way for home banking rather than branch banking.
Another important force of change in the Indian banking sector is innovation. Banks are innovative, pro-active now-a-days and offer top class service to customers. They play a dynamic role not only as a provider of finance but also as a departmental store of finance. As a result of this, new products like merchant banking, mutual funds, leasing, factoring, forfeiting, corporate advisory services and venture capital are emerging. These innovative services may augment revenue with cost effective measures.
DEVELOPMENT OF THE SKILLS OF BANK PERSONNEL
To meet the new challenges, banks have to devise novel ways of meeting the customer's demands. To help the banking staff to get sufficient exposure to technology, suitable packages relating to hardware and software applications in relation to their works are to be provided. Further, a separate marketing wing may be created in every bank to market their banking services. They must be trained suitably to keep pace with the changing environment. In order to meet the challenges, the Human Resource Department in banks have to prepare appropriate manpower plans and strategies.
The recent trend of globalisation and liberalization has posed serious problems to domestic banks. The entry of new foreign banks and private sector banks with their advanced knowledge base of automation in the banking operations and aggressive marketing strategies has pushed public sector banks to a tight corner. Potential customers have started moving towards foreign banks and private sector banks. To survive and succeed, banks must identify their marketing areas, develop adequate resources, convert these resources into healthy and efficient services and distribute them effectively satisfying the manifold tastes of customers.