“A Study on Customer Relationship Management (CRM)

in Jammu & Kashmir Bank with special reference to

Kashmir”

Dr.Samreena Tariq
Bank Employee at Jammu & Kashmir Bank

ABSTRACT
Customer Relationship Management (CRM) came into the power when banking institutions were getting more
and more competitive. The focus of CRM helped banks to understand the customers’ current needs, what they
have done in the past, and what they plan to do in the future to meet their own goals (Xu, et al., 2002). Even
though most of the banks in the developing countries such as: Pakistan, India etc. have realised the importance
of CRM and implemented its applications, but the initial investigations of the current research have shown that
quite a number of CRM goals does not produce required results and even worse, in some cases users say that
CRM has damaged customer relationships.
Apart from competitive environment, there has been deregulation as to rate of interest, technology intensive
delivery channel like Internet Banking, Tele Banking, Mobile banking and Automated Teller Machines (ATMs)
etc have created a multiple choice to user of the bank. The banking business is becoming more and more
complex with the changes emanating from the liberalization and globalization. For a new bank, customer
creation is important, but an established bank it is the retention is much more efficient and cost effective
mechanism. CRM is a sound business strategy to identify the bank’s most profitable customers and prospects,
and devotes time and attention to expanding account relationships with Banking Industry in India has undergone
a rapid changes followed by a series of fundamental developments. Keywords - Customer, Management,
Banking sector, CRM

I.INTRODUCTION
Today, many businesses such as banks, insurance companies, and other service providers realize the importance
of Customer Relationship Management (CRM) and its potential to help them acquire new customers, retain
existing ones and maximize their lifetime value. At this point, close relationship with customers will require a
strong coordination between IT and marketing departments to provide a long-term retention of selected
customers. This paper deals with the role of Customer Relationship Management in banking sector and the need

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for Customer Relationship Management to increase customer value by using some analytical methods in CRM
applications.
CRM is a sound business strategy to identify the bank’s most profitable customers and prospects, and devotes
time and attention to expanding account relationships with Banking Industry in India has undergone a rapid
changes followed by a series of fundamental developments. Those customers through individualized marketing,
repricing, discretionary decision making, and customized service-all delivered through the various sales
channels that the bank uses. Under this case study, a campaign management in a bank is conducted using data
mining tasks such as dependency analysis, cluster profile analysis, concept description, deviation detection, and
data visualization. Crucial business decisions with this campaign are made by extracting valid, previously
unknown and ultimately comprehensible and actionable knowledge from large databases. The model developed
here answers what the different customer segments are, who more likely to respond to a given offer is, which
customers are the bank likely to lose, who most likely to default on credit cards is, what the risk associated with
this loan applicant is. Finally, a cluster profile analysis is used for revealing the distinct characteristics of each
cluster, and for modeling product propensity, which should be implemented in order to increase the sales

II.DEFINITIONS:
Definition of a Customer
Imhoff et al., (2001) defines customer as: "A party who is involved with the acquisition of the company’s goods
and services, and who is also of interest to the organization"
In the above definition, party or customers can be either individuals or organizations. Customers can also be
loose group of individuals joined together as a membership organization, such as the Civil Aviation Authority
(CAA) in UK. This definition is too broad in this paper but in the current research, we mean customer as a
“Bank Client”.

Customer Relationship Management (CRM)

Customer Relationship Management is defined in many ways by many authors. Dyche’ (2002) in his book
defines CRM as: “The infrastructure that enables the delineation of and increase in customer value, and the
correct means by which to motivate valuable customers to remain loyal-indeed, to buy again.”
Providing customers with a good experience however and whenever they choose to contact you is a key part of
managing relationships with them. For the purpose of current research, CRM is defined as a business strategy
that: “comprises a set of processes and enabling systems supporting a business strategy to build long term,
profitable relationships with specific customers.
The key objective of CRM is to enhance customer value through a better understanding of individual needs and
preference” (Ling and Yen, 2001).

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Information Technology Consideration of CRM
Several writers have taken different views about which technologies comprise a best CRM consideration.
According to Dyche’ (2002), there is no one right answer to CRM implementation as long as business
requirements drive the initiative. The author presented two different approaches of CRM solution i.e.,
operational CRM and analytical CRM.
a) Operational CRM
It is also known as “front office” CRM. It involves the areas where direct customer contact occurs also known
as “touch points”. A touch point can be an inbound contact e.g., a call to a company’s customer support hotline;
or an outbound contact e.g., an in-person sales call or an e-mail promotion. In other words, the operational CRM
is also used to capture customer’s data. The operational CRM also enables and streamlines communications to
and from customers, but it does not necessarily mean optimizing service. Just because a banking customer
checks his/her balance on a website won’t conclusively establish that he/she does not prefer to perform his/her
transaction in the branch (Dyche’, 2002).
b) Analytical CRM
It is also known as “back office” or “strategic” CRM. It involves understanding the customer activities that
occurred in the front office. The analytical CRM requires technology (to compile and process the mountains of
customer data to facilitate analysis) and new business processes (to refine customer-facing practices to increase
loyalty and profitability). Under pressure from analysts and industry experts, most of today’s CRM vendors are
either creating analytical CRM capabilities or partnership with business intelligence (BI) vendors to incorporate
analysis into their offerings (Dyche’, 2002).

III.REVIEW OF LITERATURE
T.S Ravisankar in his study “Marketing strategies and planning for business growth in banks stressed that the
marketing plan for banking service be supported by appropriate marketing strategies. He suggests that the
marketing strategy for banks must be oriented to customer – current and potential.
John Brooks former president and chairman of the council of the charted institute of Bankers, London states
“Customer care is emerging as a critical factor in the banking industry and bankers are fully conscious of the
need for attaining international standard
for service”.
Dr. B.C. Saraswathyin her article has stated that the mail objectives of CRM are building long term, sustaining
relations with customers by delivering superior customer value and satisfaction. Instead of trying to maximize
profit for each every transaction,
CRM focuses on maximizing profits over the lifetime value of customers. Undoubtedly, CRM is a potential tool
in sustaining and boosting sales in this era of hyper competitive world.

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Kamath in his thesis entitled “Marketing of bank services with special reference to branches in Bombay city of
syndicate bank” has concluded that quicker and better service offered by bank will be the most important
variable in attracting and retaining
customer.
S.G Shah in his article has stated that quality of customer service in bank has to very sunk to very low and poor
levels because of two vastly different reasons. The first is that even the simple routine service have broken
down. The second area in which customer service is lagging is that of special situation.

Objectives of the Study

1) To examine the opinion of the customers as to CRM of the banks with respect to service quality management.
2) To analysis the opinion of the customers as to CRM of the banks with respect to customer interaction
management.
3) To study the opinion of the customers as to CRM of the banks with respect to customer retention
management.

Methodology & Sampling Design

This research work will depend on both primary and secondary data. Primary data will be collected by ways of
well structured questionnaire that will be administered by the researcher. Secondary data will be collected from
published records of RBI and other Bank authorities, standard text book and published research papers. The
required primary data will be collected from the bank branches in Baramulla District. A minimum of 10
branches will be approached, apart from collecting information from banks, the general public who holds
accounts with the banks in the District.

IV.ANALYSIS OF DATA
Table 1. Are you satisfied with bank ?
Options Frequency (n = 200) % of Respondents
YES 144 72
NO 56 28
TOTAL 200 100

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 Table 2. Do you Think Bank values you?

Options Responses (n = 200) % of Respondents

YES 140 70
NO 60 30
TOTAL 200 100

Table 3. Are you satisfied with the problem solving attitude of bank?

Options Frequency (n = 200)) % of Respondents

YES 130 65
NO 70 35
TOTAL 200 100

Table 4. Quality of service and staff

Options Frequency of Percentage of

Respondents Respondents
Highly dissatisfied 10 3.5
Moderately dissatisfied 20 10
Neutral 35 17.5
Moderately satisfied 63 31.5
Highly satisfied 82 41
Total 200 100.00
Table 5.Interactive Management

Options Frequency of Percentage of

Respondents Respondents
Highly dissatisfied 9 4.5
Moderately 6
dissatisfied 12

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 Neutral 38 19
Moderately satisfied 60 30
Highly satisfied 81 40.5
Total 200 100.00

Table 6. Relationship with customers

Options Frequency of Percentage of

Respondents Respondents
Highly dissatisfied 3 1.5
Moderately 4
dissatisfied 8
Neutral 45 22.5
Moderately satisfied 62 31
Highly satisfied 82 41
Total 200 100.00

V.FINDINGS
1. Maximum customers are satisfied with bank.
2. 70% of customers think that JK Bank values them.
3. We can analyse from above table that maximum number of customers are highly satisfied with problem
solving attitude of bank.
4. Quality and staff highly satisfy customers.
5. The bank has an interactive management,
6. Customers are highly satisfied with the relationship with bank.

VI.SUGGESTIONS
The Banks should more focus on service quality as they are facing a huge competition from various banks. So it
is suggested that JK Bank may take steps to improve their service quality, strategies, customer interaction
management strategies customer retention management strategies.

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VII.CONCLUSION
Today, many businesses such as banks, insurance companies, and other service providers realize the importance
of Customer Relationship Management (CRM) and its potential to help them acquire new customers, retain
existing ones and maximize their lifetime value. At this point, close relationship with customers will require a
strong coordination between IT and marketing departments to provide a long-term retention of selected
customers. This paper deals with the role of Customer Relationship Management in banking sector and the need
for Customer Relationship Management to increase customer value by using some analytical methods in CRM
applications. The present study provides some guidelines for customer relationship management satisfied
customers are loyal customer, their retention rate is much higher and so is their overall profitability for the bank.
CRM offers the most holistic route for banks to enhance customer relationships. Banks can enhance customer
retention, profitability and loyalty and get an increased share of banks from their customers. Banks need to
embrace CRM as a principle and adopt a strategy for managing customer relationships that effectively addresses
three key areas, customers, processes and technology. Finally banks should take actions such as recognition and
delegation of work, freedom to handle customer’s grievances and management’s approval to take decision
according to the situations.

REFERENCES AND NOTES

[1.] Berry, M.J.A. & Linoff G.S., Mastering Data Mining: The Art and Science of Customer Relationship
Management, John Wiley & Sons, Inc.
[2.] Cabena, P., Choi H.H., Kim I.S., Otsuka S., Reinschmidt J. & Saarenvirta G., Intelligent Miner for
Data Applications Guide, IBM Redbooks, SG24-5252-00.
[3.] Cook, W.D., & Hababou, M., 2001, Sales Performance Measurement in Bank Branches, Omega, 29,
299 –307.
[4.] Mihelis, G., Grigoroudis, E., Siskos, Y., Politis, Y., & Malandrakis, Y., 2001, Customer Satisfaction
Measurement in the Private Bank Sector, European Journal of Operational Research, 347-360.
[5.] Peppard, J., 2000, Customer Relationship Management (CRM) in Financial Services, European
Management Journal, Vol. 18, No. 3, pp. 312–327,
[6.] Peppers, D., & Rogers, M., A New Marketing Paradigm, Planning Review, 23(2), 14–18.
[7.] Ryals, L., & Knox, S., Cross-Functional Issues in the Implementation of Relationship Marketing
Through Customer Relationship Management, European Management Journal, Vol. 19, No. 5, pp.
534–542.
[8.] Yli-Renko, H., Sapienza, H.J., Hay, M., The Role of Contractual Governance Flexibility in Realizing
the Outcomes of Key Customer Relationships, Journal of Business Venturing, 16, 529–555.

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