Customer Relationship Management CRM and Customer Loyalty essay

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Customer relationship Management (CRM) and customer loyalty are successful marketing strategies in banking industry in Hong Kong

The role of customer relationship management is significant to facilitate the customer satisfaction within several industries including banking. Integration of marketing strategy, customer relationship and customer satisfaction processes results into reduced cost and performance improvement. Business allows the optimal use of resources resulting into optimal performance; it is facilitated through several initiatives of customer service and marketing tactics. The assimilation of information systems and customer relationship management processes facilitates effective flow of communication for all the participants of the systems. The increased flow of information allows the organizations to optimize the business processes performance. Cost reduction, shorter lead time, and improved communications are substantial benefits of customer relationship management.

The case of Hong Kong banking industry is investigated in order to understand the impact of customer service and customer satisfaction. The marketing strategy based on a customer centric approach is required to undertake initiatives of customer relationship management as well as measure customer satisfaction. The survey of 150 individual and corporate customers is performed to validate the research hypothesis. The staffs of 15 different banks are also interviewed to understand the initiatives taken by the relevant institutes in order to adopt customer relations functions of these initiatives in improving business performance.

I am sincerely and heartily grateful to my supervisor, Philip Snelle, for the support and guidance he showed me throughout my dissertation writing. I am sure it would have not been possible without his help. Besides I would like to thank to Dr. Terence Li, my classmates and my colleagues helped me strongly and provided me great information materials.

Table of Contents

Abstract:

First Chapter - Introduction (research purpose and objectives)

Customer relationship Management (CRM):

Customer loyalty:

Successful marketing strategies in banking industry:

Understanding the Market:

Level of Competition:

Marketing Strategy:

Hong Kong Banking Sector:

Customer Centric Approach:

Conclusion:

Second Chapter -- Literature Review

Customer Relationships Management:

Concept:

Strategy:

Tools:

Uses of CRM:

Impacts of CRM:

21 CRM and Customer Loyalty:

Marketing Strategies in Banking Industry:

Role of Information Systems:

Automating CRM:

Application of CRM:

Risks in Implementation of CRM:

Strategic Gap Analysis:

Figure: Generic Strategic Gap Analysis:

Regulatory environment in Banking

Technological Change

Developments of Issues

Security issues

Legal issues

Regulatory and Compliance Issues

Enhance IT Security

Payment Flows

Second Chapter -- Research Methodology

Research design

Questionnaire:

Customer Survey Form:

Interview:

Interview Questions:

Interview Analysis:

Population:

Sample

Method of Data Collection:

Ethical Considerations:

Results and Discussion:

Chapter 4 - Data Description:

Demographic information:

Sample Characteristics:

Chapter 5 -- Findings and Data Analysis:

Findings:

Literature review findings:

Service Charges as a factor:

Income level:

Consumer attitude:

Social and Personality factors:

Economic and ethical phenomenon:

Internal factors and ethnicity:

Relationship between internal and external factors:

Results of primary research:

Response Percentage Analysis:

Mean Response:

Impact of internal factors:

Chapter 6 - Conclusions and Recommendations:

Measures for Customer Satisfaction for Banks in Hong Kong:

References 73 Appendices 74

Chapter 1- Introduction (research purpose and objectives)

The complex relationship between customer relationship management, marketing and overall customer satisfaction, are several dynamics which have long had a complex relationship and which economists and other experts have studied and scrutinized for decades and decades. During the time of the writing of this research paper, there were still many fundamental aspects of comprehension which pertained exactly to these elements/tactics and how they impact optimal performance. However, deeper levels of understanding can always be gained, particularly when it comes to specific industries. This paper looks at the Hong Kong banking industry in an in-depth fashion in order to determine the following:

The impact of customer service and customer satisfaction on the efficiency and success of the banking industry. Experts understand the importance of these two components but quite often it still remains to be seen just how they function in terms of being adapted, adjusted and manipulated within this professional arena.

The inner-workings of a customer-centric approach. This approach is necessary for taking on the enterprises of customer relationship management along with customer satisfaction. However, it's still not clear what the best marketing strategy is to capitalize and empower this approach most thoroughly.

The results and indications of a survey to 150 individual and corporate customers is scrutinized and analyzed to determine how thoroughly it validates the research hypothesis. Ultimately, when the research findings were found to validate the research hypothesis this only helped to inform the research study even more, and helped to guide the methodology and techniques.

Interviews with staff members from 15 different banks are also interviewed in order to create a higher level of comprehension regarding the moves taken by particular institutes so that customer relations were better empowered to refine business performance and the practices which inform and promote a higher level of professional excellence.

This report starts by defining, describing and assessing the various terms which shape this research. For example, terms such as customer relationship management (CRM), customer loyalty, successful management strategies and a deeper understanding of the market are explained. The level of competition is described, as is the Hong Kong banking sector; the potential impact of a customer centric approach is discussed. The paper then focuses on a literature review and the most effective uses of customer relationship management and its consequences. The research presented then focuses on the nuanced relationship between CRM, customer loyalty and highlights the best marketing strategies in the banking industry. A reflection of information systems is highlighted, as is all methods of automating CRM, focusing on the close connection to clients and the most effective applications of CRM.

The researchers then engage in a strategic gap analysis with the cause and effect of certain strategies presented. Regulatory, security and legal issues are discussed, in isolation and in connection with one another. Regulatory and compliance issues are also engaged in heavily, included the details connected with IT security issues. An entire section is dedicated to the research methodology selected and the pros and cons of quantitative research vs. qualitative research are also presented. The questionnaire used on the sample is also presented along with the motivations for each question used. The population, sample and related details of the research study are detailed, such as the ethical issues encountered, like the danger copied content. Data description, consumer factors and nearly every large and small detail are presented, described and discussed, individually and in relation to one another.

Customer relationship Management (CRM):

The customer relationship management is applied in almost all progressive organizations. The concepts of CRM are widely applicable and implementable in different industries. The services industries are one of the most applicable industries with requisite of CRM as the nature of business and operations is affected through internet. It is essential to understand the applicability of the CRM concepts as it can also be misunderstood in terms of providing service to customers. A long terms relationship with clients is the major requirement for any CRM program to be denoted as effective (Skrobot, 2011).

There are several implementation issues when it comes to practical adoptability of CRM. The corporations develop CRM programs based on the devised strategy for creating a continuous relationship with their clients on the basis of mutual trust and benefits. The customer's feedback is also integral in order to implement an effective program. The issues related to implementation of CRM starts with the strategy for the program. The technology awareness, acquisition, and implementations require a central focus on aims and objectives (Skrobot, 2011). The organizational mission provides an overall direction for the business to adhere strategies for customer satisfaction. The CRM operations provide a wide range of data and information that can be served as measure to gauge customer's satisfaction. The services industries in particular are under sheer competition and as a result require corporations to develop programs for customer satisfaction according to the market requirements.

The technical aspects of CRM are mainly addressed under technological issues. The widespread availability of internet and related services e.g. mobile services are also essential instigators of requirements change in the consumer markets. The technological paradigm of CRM has created an impact on the customer perceptions. The customers are physically present in various locations expect similar treatment from corporations and their competitors. The advancements in technology have not only created a prerequisite for perception about customers but at the same time it also emphasized on customer value. The organizations perceive their customers as a valuable asset and provide them services accordingly. The personalized and customized nature of services also facilitates the business to create a comfort zone with their clients.

According to Ribbink, Van Riel, Liljander, and Streukens (2004) it is noted that the CRM facilities and adoption of latest techniques in industries also has a cost. The cost of resources allocated to provide services and maintain a relationship with customers is also one of the considerable factors. The businesses seeking to adopt CRM initiatives should also consider cost of offering the services. The sustainability factor of the…[continue]

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