Paper Example Doctorate 1,729 words

Customer Relationship Management (CRM) and Customer Loyalty

Last reviewed: August 14, 2013 ~9 min read
Abstract

While most businesses and institutions have been aware of CRM for decades, there is an abundance in the realm of schools of thought on how to best implement this technique for the highest level of customer satisfaction and ultimately, profitability. This paper examines the latest literature connected with CRM and engages in a research study on CRM, marketing and customer satisfaction as it manifests in the banking system in China.

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.

You’re 82% through this paper. Sign up to read the full paper.

Sign Up Now — Instant Access Already a member? Log in
130,000+ paper examples AI writing assistant Citation generator Cancel anytime
References
70 sources cited in this paper
  • References:
  • Albert, M., Njanike, L., &Mukuch, P. (2011).Gender effects on customer satisfaction in banking industry a case of commercial banks in Bindura, Zimbabwe. E3 Journal of Business Management and Economics, 2(1), 040-044.
  • Angelini, P., &Cetorelli, N. (2003).The Effects of Regulatory Reform on Competition in the Banking Industry. Journal of Money, Credit and Banking, 35(5), 663-684.
  • Ashta, A. (2010). Evolution of Mobile Banking Regulations. Challenges, 33(March 2010), 3394-3394.
  • Balmer, J. M., &Stotvig, S. (1997). Corporate identity and private banking: a review and case study. International Journal of Bank Marketing, 15(5), 169-184.
  • Bangniyel, P. (2012). Business information system strategy-How managers use CRM, ERP and SCM systems. USA: GRIN Verlag.
  • Baran, R. J., Galka, R. J., &Strunk, D. P. (2008). Principles of customer relationship management.South-Western Pub.
  • Bohling, T., Bowman, D., LaValle, S., Mittal, V., Narayandas, D., Ramani, G., &Varadarajan, R. (2006).CRM Implementation Effectiveness Issues and Insights. Journal of Service Research, 9(2), 184-194.
  • B owen, J. (2001). The relationship between customer loyalty and customer satisfaction. International Journal of Contemporary Hospitality Management , 213-217.
  • Bryman, A., & Bell, E. (2007). Business research methods. USA: Oxford University Press.
  • Bull, C. (2003). Strategic issues in customer relationship management (CRM) implementation. Business Process Management Journal, 9(5), 592-602.
  • Burdon, M., Reid, J., & Low, R. (2010). Encryption safe harbors and data breach notification laws. Computer Law Security Review, 26(5), 520-534.
  • Chandola, V., Eilertson, E., &Ert, L. (2006).Data Mining for Cyber Security. Data Warehousing and Data Mining Techniques for Computer Security, 2.
  • Chen, I. J., &Popovich, K. (2003). Understanding customer relationship management (CRM): People, process and technology. Business Process Management Journal, 9(5), 672-688.
  • Choy, K. L., Lee, W. B., & Lo, V. (2004). Development of a case based intelligent supplier relationship management system–linking supplier rating system and product coding system. Supply Chain Management: An International Journal, 9(1), 86-101.
  • Cokins, G. (2009). Performance management: integrating strategy execution, methodologies, risk, and analytics (Vol. 21). Wiley.
  • Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.
  • Dusuki, A. W., & Abdullah, N. I. (2007). Why do Malaysian customers patronise Islamic banks?. International Journal of Bank Marketing, 25(3), 142-160.
  • Gilbert, D. C., & Choi, K. C. (2003). Relationship marketing practice in relation to different bank ownerships: a study of banks in Hong Kong. International Journal of Bank Marketing, 21(3), 137-146.
  • Gillham, B. (2000). Case study research methods. USA: Bloomsbury Academic.
  • Grigoroudis, E., Tsitsiridi, E., &Zopounidis, C. (2012).Linking customer satisfaction, employee appraisal, and business performance: an evaluation methodology in the banking sector. Annals of Operations Research, 1-23.
  • Gupta, P. (2012). Small Business Credit Card Scheme of State Bank of India [SBI] and Other Public Sector Banks in Gangapur City, Rajasthan-Analysis of Customer Satisfaction. Rajasthan-Analysis of Customer Satisfaction (May 1, 2012).
  • Gustafsson, A. (2005). The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of Marketing , 210-218.
  • Harvard Business Review. (2011). Harvard Business Review on Increasing Customer Loyalty. Harvard Business School Press.
  • Hoq, M., Amin, M., &Rumki, N. (2011).The Effect of Trust, Customer Satisfaction and Image on Customers’ Loyalty in Islamic Banking Sector. South Asian journal of management, 17(1), 70-93.
  • Hogan, J. (2002). Customer Equity Management: Charting New Directions for the Future of Marketing. Journal of Service Research , 4-12.
  • Humby, C., Hunt, T., & Phillips, T. (2008). Scoring points: How Tesco continues to win customer loyalty. USA: Kogan Page.
  • Ian, S. (2009). Online Banking and the role of CRM. USA: GRIN Verlag.
  • Jamal, A., &Naser, K. (2002). Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking. International Journal of Bank Marketing, 20(4), 146-160.
  • Jo, H., Kim, S., & Won, D. (2011). Advanced Information Security Management Evaluation System. KSII Transactions on Internet and Information Systems, 5(6), 1192-1213.
  • Kahreh, Z., Shirmohammadi, A., &Kahreh, M. (2012).An empirical study to analyze customer relationship management strategy using balanced scorecard. Management Science Letters, 2(5).
  • Khatri, N., & Ng, H. A. (2000).The role of intuition in strategic decision making. Human Relations, 53(1), 57-86.
  • Kim, H. W., & Pan, S. L. (2006). Towards a process model of information systems implementation: the case of customer relationship management (CRM). ACMSIGMIS Database, 37(1), 59-76.
  • Klein, M., & Mayer, C. (2011). Mobile Banking and Financial Inclusion: The Regulatory Lessons. World Bank Policy Research Working Paper No 5664, (May), 3-34.
  • Kotler, P., & Armstrong, G. (2009). Principles of marketing. USA: Pearson Education.
  • Kumar, V. (2010).A customer lifetime value-based approach to marketing in the multichannel, multimedia retailing environment. Journal of Interactive Marketing,24(2), 71-85.
  • Lam, R., & Burton, S. (2006). SME banking loyalty (and disloyalty): a qualitative study in Hong Kong. International Journal of Bank Marketing, 24(1), 37-52.
  • Law, M., Lau, T., & Wong, Y. H. (2003). From customer relationship management to customer-managed relationship: unraveling the paradox with a co-creative perspective. Marketing Intelligence & Planning, 21(1), 51-60.
  • Lee, C. H., Huang, S. Y., Barnes, F. B., & Kao, L. (2010). Business performance and customer relationship management: the effect of IT, organisational contingency and business process on taiwanesemanufacturers.Total Quality Management, 21(1), 43-65.
  • Li, E. Y., Zhao, X., & Lee, T. S. (2001).Quality management initiatives in Hong Kong’s banking industry: A longitudinal study. Total Quality Management, 12(4), 451-467.
  • Magi, A. (2003). Share of wallet in retailing: the effects of customer satisfaction, loyalty cards and shopper characteristics. Journal of Retailing , 97-106.
  • Mermod, A. Y. (2011). Customer’s Perspectives and Risk Issues on E-Banking in Turkey: Should We Still be Online? Journal of Internet Banking and Commerce, 16(1), 1-16.
  • Pan, S. L., & Lee, J. N. (2003).Using e-CRM for a unified view of the customer. Communications of the ACM, 46(4), 95-99.
  • Partridge, L., & Sinclair-Hunt, M. (2005).Strategic Management.USA:Select Knowledge limited.
  • Payne, A., &Frow, P. (2005).A strategic framework for customer relationship management. Journal of marketing, 167-176.
  • Pham, T. Q. (2007). Small Business Usage of IQMS Customer Relationship Management Application: An Investigation of the Extended Technology Acceptance Model. ProQuest.
  • Raguse, M., Meints, M., &Langfeldt, O. D6.2–Criteria for privacy enhancing security technologies.
  • Rajola, F. (2003). Customer relationship management: Organizational and technological perspectives. Germany: Springer.
  • Reinartz, W., & Kumar, V. (2002). The Mismanagement of Cuastomer Loyalty. Harvard Business Review , 4-12.
  • Richard, J. (2007). The strategic value of CRM: a technology adoption perspective. Journal of Strategic Marketing , 421-439.
  • Ribbink, D., Van Riel, A. C., Liljander, V., &Streukens, S. (2004). Comfort your online customer: quality, trust and loyalty on the internet. Managing service quality, 14(6), 446-456.
  • Rigby, D. (2003). Management tools survey 2003: usage up as companies strive to make headway. Strategy & Leadership , 4-11.
  • Ryals, L. (2005). Making Customer Relationship Management Work: The Measurement and Profitable Management of Customer Relationships. Journal of Marketing , 252-261.
  • Shaikh, J. M. (2005). E-commerce impact: emerging technology – electronic auditing. Managerial Auditing Journal, 20(4), 408-421.
  • Shanmugasundaram, S. (2008). Customer relationship management: Modern trends and perspectives. New Delhi: PHI Learning Pvt. Ltd.
  • Sivaraks, P., Krairit, D., & Tang, J. (2011). Effects of e-CRM on customer–bank relationship quality and outcomes: The case of Thailand. The Journal of High Technology Management Research, 22(2), 141-157.
  • Skrobot, K. (2011). Implications of Measure Method Customer Loyalty and Satisfaction. GRIN Verlag.
  • Slattery, D. J., &Nellis, J. G. (2005). Product development in UK retail banking: Developing a market-oriented approach in a rapidly changing regulatory environment. International Journal of Bank Marketing, 23(1), 90-106.
  • Sullivan, U. Y., Peterson, R. M., & Krishnan, V. (2012). Value creation and firm sales performance: The mediating roles of strategic account management and relationship perception. Industrial Marketing Management, 41(1), 166-173.
  • Sultana, R., & Point, C. (2012). Mobile banking: Overview of Regulatory framework in emerging markets. South Asia, 2009, 1-17.
  • Sunarto, H. (2007). Understanding the role of bank relationships, relationships marketing and organizational learning in the performance of people's (No. 404).USA: Rosenberg Publishers.
  • Tan, M., &Teo, T. S. (2000).Factors influencing the adoption of Internet banking. Journal of the AIS, 1(1es), 5.
  • Tashi, I. (2009). Regulatory Compliance and Information Security Assurance. International Conference on Availability Reliability and Security, 670-674.
  • Tavana, A. F., Bakiyan, B., Farjam, H., Karami, M., &Ostovari, S. (2013).Electronic Customer Relationship Management and Its Implementation in Business Organizations. computer science, 4(11).
  • Veismoradi, A. (2013). The Study Relationship between Marketing Knowledge Management Assets and Capabilities and Banking Industry Performance of Iran. International Journal of Management and Humanity Sciences , 25-34.
  • Vella, J., Caruana, A., & Pitt, L. F. (2012).The effect of behavioural activation and inhibition on CRM adoption. International Journal of Bank Marketing, 30(1), 43-59.
  • Verhoef, P. (2003). Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development. Journal of Marketing , 30-45.
  • Winnie, Y. L. W., & Kanji, G. K. (2001).Measuring customer satisfaction: evidence from Hong Kong retail banking industry. Total Quality Management, 12(7-8), 939-948.
  • Yiu, C. S., Grant, K., & Edgar, D. (2007).Factors affecting the adoption of Internet Banking in Hong Kong—implications for the banking sector. International Journal of Information Management, 27(5), 336-351.
  • Zichermann, G., & Linder, J. (2010). Game-Based Marketing: Inspire Customer Loyalty Through Rewards, Challenges. Hoboken: John Wiley & Sons.
Cite This Paper
PaperDue. (2013). Customer Relationship Management (CRM) and Customer Loyalty. PaperDue. https://www.paperdue.com/essay/customer-relationship-management-crm-and-94587

Always verify citation format against your institution’s current style guide requirements.