Significance Of E Crm In Online Banking Marketing Essay

Published Date: 23 Mar 2015

This research study mainly attempts to explore the advantage of replacing traditional business by online business with a focus on e-CRM as an issue in online banking business within UK bank industry. The researcher has focused on both sides in terms of banks and customers of online banking, as per later issue with respect to customers it has been focused on students of the University of Salford with a questionnaire response from them and from other side of the bank business a case study of one the leading online banks in UK was chosen.

Primary data collection includes the traditional data sheets of questionnaire and 25 students were questioned on whether they agree with the fact that banks are communicating with them online and satisfying their needs .Based on the response of the students the banks are interested in maintaining online customer relationship with e-Technology for their business to be successful in the competitive market. Besides with banks perspective of using e-CRM in online banking, a case study of online bank of UK was chosen as a secondary data research.

To be continued……

Introduction

This chapter introduces the background of the selected area and there we will be followed by problem area discussion with an aim and objectives of the research study. This will help the reader to understand the insight of the research area. The problem discussion includes with research questions and at the end of the chapter the disposition of the dissertation structure is presented.

1.0 Background: In the early 1990's online banking was introduced in UK as number of banks conduct test with the internet services provided. Nationwide building society was the first financial institution to offer web based banking service which was launched in may 1997; the first bank to offer current account services online through internet is Royal Bank of Scotland. Now, almost all banks provide e-banking services.

A discrete number of benefits are added to banking services when internet acts as an communication channel which is impossible to replace by the use of other communication channels like Wireless Application Protocol (telephone), Digital TV or even more high street bank branches, almost all of these are business asset benefits that means it has tangible benefits but there are also some intangible benefits of the internet which has disadvantages on customer relationships and e-banking.

With the existence of web 2.0 technology, now a day's customers have become self reliant, thus the financial services looks for the new financial customer and they also search for personal financial empowerment. Producer-led approach was preferred by banking services for many years rather than consumer -led, potential revenue was the main reason to financial institutions to go online; An increase in profits cannot be guaranteed by transferring institution's business into online, only cost factor comes into existence as internet offers low cost for their operation of business over other distribution channels. At this stage of development, consumers continue to demand internet banking rather than high street branch banking and one-to-one or voice contact with their financial institutions.

With the advent of new technologies and also rapid growth of internet is expected to be in coming years, a major period of adjustment for the world of personal finance, and service providers will have to find ways to expand their customer bases for products and services offered over the internet, even though it's not invalidating other distribution channels. Thus the internet is profoundly changing the operations of the institutions .So it perhaps with the surprising fact that, despite the growth in e-business, so that online banking was one of the least developed areas.

Initially, online banking came into existence for private individuals and small business .But this has been changing as internet now is a proven technology with strong security. As a result, banks are targeting their critical functional operations and larger activities. These activities add values to services and facilitate CRM over the internet channel, which are important challenging tasks for the marketers; service sector has growth in online business rather than other sectors; therefore companies must be sure that they are in place for success. The best fit of CRM in online channel, and what difficulty might online business face in terms of CRM, one solution for this to banks is that successful migration of customers to the internet which lies in transferring the offline relationship to the online environment. The more closer the customer feels towards the services ,there are chances of remaining as " Future Customer" , therefore a customer focused culture needs to be developed through every channel of communication between banks and its clients , and internet is one of them.

Banks vying for market power are looking step headway from their competitors. With the advent in web technology like web 2.0, banks adopted to use internet in their strategic marketing services for providing loyalty to their customers within their limitations. Successful customer relationship management is implemented in order to prevent customers switching to other banks or competitors. The main aim of the e-CRM is to satisfy the customers at global level without any risk involved with in their limitations. Therefore the significance of e-CRM in the online banking and also assessing its impact on the bank outcomes for e-business are also crucial. Different banks have their limitations and within those limitations customers needs must be fulfilled, considering market competition and costs.(Dave Chaffey….et.al, 2003)

This dissertation will focus on to find the significance of CRM in online banking and improve CRM over the internet; under the conditions of given more effective and practicable CRM to gain customer loyalty. Data collection analysis is made through small structured questionnaires, which would be surveyed in traditional data sheets and online ways. Conclusions drawn from this study would have the significant social, economic, academic and practical value.

Customer Relationship Management (CRM):

According to Bose(2002) Customer Relationship Management is an essential and vital function in the customer oriented marketing which is to gather and accumulate the information of the customer in order to provide effective service to meet the customer needs.CRM involves in attaining the information of the customers and analyzing the customers data in order to sell goods and services. CRM came into existence due to the changes and the developments in the marketing environment and web technology. With the advance in technology relationship with customers has become one of the key point to set competitive power of an organization. Companies gather information of their customers in order to perform customer relationship management more effectively. As the technology has been advanced now a day's web has become the new medium for business and marketing scope to enhance data analysis of customer's behavior and the one-one marketing have been advanced.CRM lies in the heart of every business transaction.

Massey et al.., (2000) described CRM as attracting, developing, maintaining and relating profitable customers over a period of time. In this increased global competition the new ways of working are firmly shifting into the hands of paying customers and organizations adapting e-CRM than CRM.

Electronic Customer Relationship Management (e-CRM):

Changing customer attitude is driving towards the Electronic Customer Relationship Management(E-CRM).According to Kennedy(2006) E-CRM can be considered as strategic technology centric relationship marketing business .According to Forrester research (2001) e-CRM is the combination of both traditional CRM with e-business market place applications. According to Dyche(2001) e-CRM can be combination of hardware, software ,application and management commitment. Depending upon the objectives of the organization e-CRM takes into different forms .Dyche (2001) identified e-CRM as two types like operational e-CRM and analytical e-CRM .Analytical e-CRM can be defined as collection of customer's data as a continuous process. Operational e-CRM can be defined as the diverse ways of providing the service to the customer by the web based e-mails, phone, fax, etc. The main aim of the e-CRM is to improve and provide the better customer service, develop a better relationship and also attain the customer lifetime value to the organization.

Research Area Discussion: Web based e-CRM is an amount of information available to the customers browsing internet. Future web-based e-CRM depends on the hands of one to one websites. We live in technological age and now a day's customers are fuelled by internet induced expectations and an increasing mood of reliance on their own capabilities. So each and every organization must compete in an environment where communication, buying processes, data management, delivery and service are all important in the battle for maintaining long term and profitable organizations. ECRM helps organizations to measure, create, increase income and reduce costs along with them it also helps the organization to operate efficiently and profitably.

The main role of e-CRM is to enhance the marketing effectively and serve the customers effectively in a better way. It also helps to reduce the cost of communication with customers as it is web based and streamlines the workflow as it is integrated with the enterprise system which makes better market segmentation and also helps in enhancing the customer interaction, personalization and relationship opportunities.

It was further stated that e-CRM has the power to develop and attain customer value by allowing the organizations to collect, organize and segregate customer's information. The data obtained from organization website can be captured, integrated and distributed by the e-CRM. For successful management of customer relation current CRM process must be integrated with e-CRM application, but this integration is not easy to all the organizations.

1.1 AIM and OBJECTIVES: To Evaluate the Significance of e-CRM in Online banking using customer's response from questionnaire.

Objectives:

How banks use e-CRM in online banking?

What benefits can bank and its customers achieve by e-CRM technology in online banking?

To evaluate the implementation of e-CRM technology in the online banking?

1.2 DISSERTATION STRUCTURE

INTRODUCTION

iint

LITERATURE REVIEW

APPENDIX

CONCLUSION

RESEARCH ANALYSIS

RESEARCH METHODOLGY

2.0 LITERATURE REVIEW: In this chapter researcher discuss about the theory related to the research questions and also presents the online banking business, purpose of online banking ,e-CRM in online banking ,different e-CRM models, drawbacks or failure of e-CRM in online banking, benefits of e-CRM in online banking.

2.1 Relationship Marketing: There are numerous definitions for relationship marketing and many readers are directed toward Harker (1998) for a thorough review. Some of the most commonly used definitions offered by particular influential authors, which are outlined below:

"[marketing is ] the process to identify ,establish, maintain and enhance relationships with customers and other stakeholders , at a profit , so that the objectives of all the parties involved are met , this is achieved by a mutual exchange and fulfillment promises".(Gronroos,1997,p.407)

"All marketing activities directed towards establishing , developing and maintaining successful relational exchanges" (Morgan and Hunt,1994: pp4)

According to Moller and Wilson, RM can be defined as understanding, creating and managing exchange relationships between economic partners; manufacturers, service providers, various channel members, and final consumers. (Moller and Wilson ,1995, p.1)

According to Gummesson, marketing is seen as relationships, networks and interaction. (Gummesson, 1994, P.12)

In relationship marketing , customer experience is the main focus and supply of requirement to generate continuing individual customer satisfaction.

2.2 Customer Relationship Management: Relationship marketing, direct marketing, and database marketing have combined together to create a powerful marketing paradigm. This paradigm is often referred as Customer Relationship Management. In one to one marketing, relationships are managed on individual basis. If the relationships are managed at individual level the cost increases for this banks approach CRM, which can give customer service in segments or groups. Direct marketing delivers tactics to the marketing communications and sometimes the product itself to the individual Customer .Relationship marketing provides the conceptual strengthening of CRM since it provides the customer service through knowledge of the customer. Database marketing provides the technological enabler to store the customer related data and access it to create strategic and tactical marketing opportunities

Importance of CRM:

The main of Customer Relationship Management is to gather information or data about the customers. By using the data the customer service is made easy for those dealing with the customers as they have the readily available information needed to solve the issues. If customer is satisfied then the organization can have profitable business and also the support staff have the more resources available. A more data work is needed for the customer relationship management and these data work include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfillment dates , account information and many more etc..,

The support staff must have the information from the customers as to provide answer to their needs to solve the issues without having to wait in the queue for long time and also to avoid them from going to other departments of the bank. With these customer service representatives will also be able to see customer's previous concern's. According to Lynette Ryals; Andrian Paine (2001) with all the information about the customer's previous concern the customers with the same issue again will not have to say again the same story all over again. This helps the support staff in taking less time to solve the problem and helps in increasing higher productivity of the support staff.

Management success depends on the customer relationship management as it give the customer satisfaction and efficiency of service information by the help desk people at banks. This system also helps the organizations future course of act, whether it involves separating out one of the products in the shelve and the products that are sold. The information provided by the customer relationship management also helps the marketing and advertising people in identifying what ideas work and which do not work.

Integration of Customer Relationship Management systems is an important task in achieving successful business profits but it's not that easy task to integrate CRM system in banks. Most of the banks fail to integrate the CRM system as they need to share information for it to be effective. These systems also help in business expansion as they can handle huge amount of data which helps in coping with the increased number of customer's and their data. By successful installation and implementation of CRM system can be sure that banks business will be successful and their customers are lot more satisfied than before.(Adrian Payne; Pennie Frow 2003)

Why Customer Relationship Management is important to the organizations? Some of the reasons are stated below:

The main strength of the Customer Relationship management system is that it organizes and collects the information about the customers and with this information the marketing staff can analyze for the future opportunities for example by this system the banks analyze the needs of the based to the customer's and what's the customer needs but they aren't buying. By available information the marketing staff develops a sales strategy. This includes package of new products and services offering to the customers with some incentives.

The other reasons for the importance of Customer Relationship Management System is that each every customer is important to the business but some other customer are more worth than others . By differentiation of sales efforts organizations can produce more profits per sale hour and also they can increase more sales. With the help of CRM tools they can identify the position of department sales are most profitable and which customer's are expected to buy them.

Customer satisfaction is vital in the CRM systems as customer satisfaction involves two ideas: one is to meet the customer needs and other is to keep the keep the promises or words to the customers. For example if a customer requests for an appointment and request was confirmed with appointment date , then if u deny his appointment on given time then this shows your respect or value given towards the customer . In this way, CRM is used to make sure that the organization is meeting the customer needs as fully as possible. Professional handling of after sale contacts such as service calls, resolving customer issues or helping the customer to choose the right product.

Last but not the least is CRM system helps the organization sales and customer support representatives to work in smarter way because it provides the improved information about the customer's at their finger tips which helps in maximizing the revenue of the organization.

Electronic Customer Relationship Management (e-CRM) :(from benefits of e-crm)

According to Dyche (2001) e-CRM is the combination of software, hardware, application and management commitment. Operational and Analytical are different types of e-CRM. Customer Touch up point is the main importance given by operational e-CRM where the bank officials can have contacts with the customers through telephone or letters or web mails. Analytical e-CRM is a continuous process where customer's data is collected. It requires technology to process customer's data. This gives importance to identify the demographic patterns of customers purchasing etc in order to create new business opportunities giving importance to customers.

Based on the objectives of the organizations e-CRM takes into different forms. E-CRM is about the people, process and technology and these are key paramount's for success (Rosen k, 2001)

According to Stanton et .al.,(1994) , the traditional definition of e-CRM is show the attitude for entire business. This means that identifying and defining the primary goal of the organization to everyone and creating a sustainable competitive advantage. This strategy helps the organizations to meet their internal marketing objectives.

According to Dyche (2001) the main aim of the e-CRM is to improve the customer service, develop relationship and retain valuable customers. The main feature of e-CRM is that it enhances the customer value and also motivates the valuable customers remain loyal with these e-CRM features, where e makes huge difference in this competitive market.

2.5 UK Banking Industry

According to BBA (British Bankers Association) there were altogether of 385 banks and authorized financial institutions operating in UK. All banks provide different services like account opening and closing, balance information, account query, bill payment, inter-account transfer, set up/amend standing order or direct debit, stop payment, foreign currency exchange, money withdrawals and many other services. In the present market, Lloyds TSB is the market leader in terms of 8.74% of current market, followed by NatWest (5.47%), Barclays (5.35%), HSBC (4.35%) and Halifax (2.98%)

2.3 Online Banking: "process of allowing the consumer to perform banking functions online .Internet is the communication channel with specific account information and password of the consumer" .Transferring funds, paying bills, checking of saving account balances, paying mortgages, and purchasing financial instruments and certificates of project are the banking activities done online through online banking using the internet as a delivery channel.. In internet banking customer accesses his or her accounts from a browser -which is software that runs internet banking programs resident on the banks ' world wide web server, not on the user's pc'.

According to kajuarulato ..et.al (2002) electronic banking refers to internet banking, where consumers can deliver the bank services 24 hrs a day, seven days a week. This shows those customers using online banking can be young, well educated, and having high level income and good job

According to Ravi…et.al (2001) there are two types of internet banking which are like e-banks and e-branches .e-Bank exits only on the internet where as paper record is not kept and it can operate all over the world which is available all the time without any opening and closing time.

Purpose of Online Banking:

With the banking experiences all the banks has entered the online bank market with them traditional banks have also been moving to Internet banking(Geralch, 2000) , there is a wide acceptance that future retail banking will be influenced by electronic transactions( Jhonson et al.,1995; Graham,1997; Treanor, 1997). With the estimation there would be 60% of retail banking transactions will be online in the next ten years time( Barwise, 1997), These estimation can also be increased now a days as some internet banks have no branch offices; which they can reduce costs of operating and fixed costs by having replaced staffs and physical facilities with Information Technology (IT). These facilities or services gave the internet banks to offer lower or no fee services and also offering higher interest rates on saving accounts than to the traditional banks(Geralch, 2000). To be continued

2.4 E-CRM in Online Banking:

In the early 1980's Relationship Marketing came into existence in the banking sector (Berry, Lang & Colgate 2003, p: 29) due to market competency as a result of " Deregulation, market saturation and harsh competition".( Murphy 1996, Kapulas & Ellis 2002) .The undifferentiating of customer services and financial packages led to build long term relationships with consumers in which they could become more competitive in this environment.(Lai Man & Speece 2000, perrin, Filatrault & richard 1992).

Relationships between both the banks and customers must be mutually beneficial and it is also agreed that consumers and banks alike benefit from them. Relationships are considered more importance to the customers in the financial arena due to high risk and complex nature of banking (Barnes & Howlett 1998) .Relationships for the banks had increased loyalty, retention and profits (Clare 2001)

According to Barnes and Howlett(1998) ,it is the persons who are key to develop these relationships and it is important that banks train their staff in order to meet the customer needs at each interaction .Furthermore, Boyes and stone(2003) identified that" members of the staff have potential to build relationships with customers that is not easy for the competitors to replicate easily and quickly" .Therefore employees in the banks are important source in building relationships with the customers.

Kennedy (2006) says the E-CRM is considered as application technology to the marketing to achieve CRM or strategic technology centric relationship marketing business framework. The purpose of e-CRM is to serve customers and enhance analytical capabilities in an organization (Fjermestad and Romano, 2003)

To gain further competitive knowledge banks began to open new delivery channels like PC, Internet, Interactive TV and WAP banking .competitive advantage can be reduced by internet banking in many ways as. "Customers rely on FSI brand, website design and the tone of voice from the telephone based on evaluation criteria but not on the evaluation of face-to-face relationship with the FSI's staff". Thus the internet banking had the opposite effect to what was originally intended.

Competitive advantage can be reduced not only by the fact that customers have less knowledge on which to access the service, but also due to competitors following ahead through entering internet banking. In order to differentiate themselves banks needs to do something and so build relationships with customers than even before .According to Kapoulas ,Murphy and Ellis (2002, p:309) "relationships and branding differentiation cannot be so readily appropriated". Thus the complication now is that the relationships must be built through the delivery channel like internet.

The customers prefer physical banks because they can have the face to face interactions and also they can have personal interactions and the main the benefit is that they achieve trust through face to face interaction rather than any other means .With addition to these the security is also an another issue for customers not adopting internet banking.

The weakened relationship in internet banking has also an impact not only on customers but also on the banks. According recent past literature, customers compare the offers from the competitors easily by browsing their websites and accounts can be easily switched from one bank to another at press of a button. (Kapoulas, Murphy & Ellis 2002, p.303).

According to Kapoulas, Murphy and Ellis (2002, p: 309) "something must be done to maintain e-relationship with customers, if not customers will change easily from one e-bank service to another". The importance of loyalty with the customers is very important in order to reduce the switching of the customers and also it can retain customers in the long-term.

Within the literature, a controversial issue has come into existence that whether loyalty can in fact be built over the internet. Clare (2001) ascertains that" recent facts and figures of UK internet banks suggest that there is no existing reason why e-business should not generate same degree of customer loyalty as all the traditional businesses do". According to Jayawardhena & Foley 2000, p: 23) the customer loyalty can be gained when the service is personalized or customized according to the customer needs.

According to Salemen and Muir , Further two approaches in which banks can ask commitment from the customers i.e. through 'positive' and 'negative ' loyalty elements. Where negative loyalty elements includes creation of barriers to change and positive loyalty elements include satisfying of the customer needs and achieving satisfaction among themselves.

Some authors highlight that with capabilities of technology involved in internet banking, it is easier to satisfy customer rather than traditional banking. Customer Relationship Management (eCRM) software can store vast amount of customer information or data. This can allow the banks to better know their customers and their target products and also the services that better suit their needs ( Clare 2001, p: 168).But conversely , Harden(2002,p:326) identified that despite having more customer data available, the banks personal knowledge of the customers is becoming increasingly reduced. It can be argued that the banks are becoming data rich rather than having information of the customer needs. As this is because of the information systems and the way in which the organization is structured. In order to manage relationships the organizations must be 'customer centric' relationship oriented. An integrated view of customer data must be developed which is very difficult to achieve.

According to Kapoulas, Murphy and Ellis (2002) banks can gain customer commitment by stressing the role of communication in relationships and also building loyalty should not be underestimated. They also say that interactive communication is one way to build trust and commitment and develop among interested customers.

Even though it's not easy to create loyalty and meaningful relationships in internet banking but it is necessary for the banks to cease trying. If the relationships are mutually beneficial then the benefits of internet banking are also mutually beneficial. Customer as well as banks benefit from internet banking. Banks can reduce the operating and fixed costs while customers can benefit from convenience (Marr and Prendergast, 1993), ease of use, lower service fees and high interest rates when compared to accounts in traditional banks. It's also important factor that these benefits can also make the customers attitude towards the internet banking and also out weight them to have online relationship with the bank representatives or officials.

Different e-CRM models in Online Banking:

One of the models for e-CRM is one-to-one relationship collecting the data about the individual customer and trying to offer them the products closer to individual need.

Transparent Marketing: In this the company involves in giving the individual customer as much control of the offer as possible to customer.

Classic CRM: here the customer data is grouped as to be managed in a limited number of segments with giving different offers to each segment.

Personalized communications and targeting: here the offer is similar to each individual customer but there is a light difference in their movements towards specific individual customer.

2.6 Drawbacks of E-CRM:

Up to the organization limits customers receive the service

No human interfacing is involved ,what you see is what you know

Impersonal does not recognize user

Cannot access in the remote areas.

ELEMENTS OF E-CRM:

Customer selection: In this context the customer selection refers to the customer targeting, segmentation and mass customization which offers together as customized product with low cost and also which fulfills the individual needs via mass marketing. As each every individual has unique desires and needs, mass customization came into existence as there is a fast growth in information and production technologies

The combination of internet and customer relationship management gives the possibility to track the customer needs and desires by data mining the clicks and streams of the customer's when they are online. By this information the mass customization can help in satisfying the customer needs and desires and it can also lock and bind the customer, which can reduce the threat of switching the website.

Customer Acquisition: In this context it focuses mostly on promotion and other incentives to acquire new customers and also to serve the existing customers to keep them online. Firms must at least have the email address of the customers in order to promote the offers and incentives as to attract the customers. To get the information of the customers like email, address, and mobile number the firm offers the incentives through banner where the detailed information of the customers can be found.

Customer Retention: In this context the customer retention turns the one time customers into regular customers and keeps them online as long as possible. This can be achieved through two possible ways like personalization and online communities.

Customer Extension: In this context customer extension focus on the maximization of the lifetime value of the customer. They can get the information through customer relationship via cross selling like if there is any change in the address, customer account and also the transaction history in order to keep them online without moving to other websites.

Figure(1)

Customer relationship management life cycle

Source: http://www.davechaffey.com/static/6-E-CRM.png accessed on 15th july 2010

2.8 Process of E-CRM: There are four processes in E-CRM according to Julta et.al (2001) which are engage, purchase, fulfill and support components.

Engage component: This process involves in enhancing the right customers to find the right product or service. This can be achieved through search engine or advertising banner. E-CRM helps in supporting the traditional channels like storefront, resellers through internet but it doesn't play a active role in online marketing. When a customer searches for a product looks for contents, comparisons, configure, interact and ask questions and listen, with this information E-CRM can identify the customer needs and solves the problem. While ongoing this process advertising helps effectively to the customers to look for their right products.

A merchant can have personalized view of the customer through traditional and online marketing tools where he can pick and choose products and forwards the related information to customer .the requirements of the customers are understood and the contents are tailored to them ,where they can get a clear picture like costs ,rules and regulations. Thus the complete information of the customer can have better customer experience and the online information is recorded in the database. Customer data helps the sales leads to analyze and create marketing campaigns. Most of the banks are using traditional media which includes newspaper, radio and television. For a successful marketing campaign customer data warehouse is important to attract the customers according to their needs. This helps in personalization and one-one marketing.

Order Component: Selection and commitment are the two things customers prefers while ordering a product. There is no distinction between the departments when the customer interacts with the business, it does not create any difference in dealing with marketing, sales or support service. In dotcom customer views the business all at once. In real-time shopping environment the overall view of price, shipping, availability and tax rules of the products are given.

Back office system plays an important role while a customer's orders a product, as it creates more customer expectations and also more accurate in presenting the delivery date and order status information. Customers can make changes in their order until the time of shipment, they can also view their past order transactions. For these things, order system must facilitate not to hold orders but to create a real value to the customer. Order system must contain the real time supply chain management data such as demand planning and forecasting, manufacturing planning and scheduling, distribution and deployment planning .In b2c environments payments are made mostly through credit cards, micro payments and electronic fund transfer, and non- cash settlements like contract and invoices.

Fulfillment component: Fulfillment of components depends on management and movement of information on product and service. When a problems is found in a product customers sends the product back and gets replacement

2.9 BENEFITS OF E-CRM:

2.9.1 E-CRM customer benefits:

Interaction with customers and satisfaction: Due to E-CRM, members of the bank staff can interact with customer's right in front of your website through phone call, chat, email. According to Harris, E.K (2000) e-CRM will provide the customers any service at anytime throughout the year in the way he needs. The bank officials can also promote their products through passing the information to the customer .Thus E-CRM maintains long term relationship with the customers with trust, ethics and friendship

Transaction processing speed through e-response: According to Jason C.H. Chen et.al (2006) e-responses are mostly used by the business in order to acknowledge the receipt of orders, payment and delivery of information. Many banks have changed their target time for the transaction from 48 hrs to 24hrs by the usage of e-CRM as the bank official reaches the customers in order to confirm the transaction. Thus the e-responses help in maintaining the relationship between the bank staff and the customers.

Service Quality: According to Brandon Randall (2007) Service quality means customer satisfaction. The behavioral factors like the outcomes from a mouth of human has its connections to the service quality .A lot of attention has been focused on service quality and its outcomes such as profitability and retention of customers and their loyalty. Service quality also relates to reliability, responsiveness, quality, empathy and assurance. Delivering high quality services helps the banks to manage and improve the customer relationships. Secondly, most of the quality dimensions of the e-CRM are new and most of them are related to technology: ease of navigation, flexibility, efficiency, price knowledge.

Convenience and Trust: With the increasing knowledge and superiority of the customers, banks are now trying to gain the customer by establishing different aspects which are vital for them. Thus the different aspects include the facilities, reputations, service, operation hours, interest on savings as well as on loan, location of the bank and convenience.

Convenience is major factor in deciding the brand and if the customers are not happy with convenience of the brand, it doesn't take much time to switch the brands. Location is also one of the main factors as helps the customers to reduce the travel costs. It also helps the customer in saving time, money and acquisition etc.

2.9.2 E-CRM BANKING BENEFITS:

Personalized Services: To build a strong relationship with the customers, each and every contact is important for the bank officials. According to Adebjano. D. (2008) serving the unique needs of the customers is defined as the personalization. Better conversations with the customers can improve the customer relationships. The main aim of these conversations is to find out the needs of the customer and to provide them with the best possible solutions which makes quality service to the customers , as this is most important in banking sector as now a day's customers has become choosier.

Better relationship with customers: In the earlier days the sole aim of relationship marketing is gather the customer preferences information and store them in their databases, so as to protect and deal with one-one relationship with the customers CRM was developed. According to Shanmugam, B (2001) once when a bank acquires customers and when is has ability to have them lastingly forever, then the customers become more loyal and makes better use of the services of the organization.

Transaction security: According to Goldfinger (2001), a major barrier in internet banking was safety. Banks were much worried about their access to the systems with unauthorized permission, and also customers are worried about their personal data and the risk of false transactions. Nowadays banks are exploring security measures like electronic signatures, digital certificates, smart cards and biometrics. The cost of these measures and adoption is high budget for the banks. So it is important all banks must provide sufficient privacy statements, security measures explanation and also customer's needs to be educated about the unauthorized users like hackers. Now a day's banks are trying to ensure secure payments on the internet through latest technologies like encryption and firewalls.

E-mail for business communication: One of the fast and inexpensive source used to send information like order confirmations , transaction updates, promoting new products and responding to the queries from the customers.

Benefits of e-CRM to Bank's and Customer's:

e-CRM

e- CRM benefits to customer's

Customer's Interaction and Satisfaction

Convenience to the customer's

Transaction processing speed through e- response

Quality service

Trust

e-CRM benefits to Bank's

Better relationship with the customer's

Using e-mail as communication channel

Personalized or one to one services

Using internet and websites to market their products

Transaction security is benefited

3. Research Methodology

In this chapter the main purpose is to look at the research methodology implemented by the researcher in this dissertation in order to collect data which will lead to successful literature review and to approach the theory by drawing conclusions from articles, theories and along with these some questionnaires that will lead to aim and objectives of the project. This chapter also gives some specific reasons why a research methodology has been used and it also shows how it helped to structure the content of this dissertation from a theoretical and also practical point of view.

Primary and secondary data research may not be taken into consideration sometimes as it may not answer all the research questions the researcher wants to find out. This is because the information available may be out of date or it cannot relate the certain company or organization. But to answer the research question the researcher approaches primary research methods to find relevant information of the theory.

3.1 Research Approaches:

Here the researcher will discuss about the different research approaches of research. According to Saunders et.al (2000) there are two different research approaches such as the inductive approach and the deductive approach. The inductive approach can be defines as the collection of data and developing theory as a result of the data analysis, where as in the deductive approach the researcher develops a theory and hypothesis which also needs to design a research strategy to test the hypothesis. The differences between these two approaches are as following:

The Inductive Approach

In this approach, the researcher tries to makes sense of the information that has been collected from different research strategy and analyzing those data which leads to a formulation of a theory. So from this we can say that theory would follow data rather than vice versa.

Tentative Hypothesis

Theory

Hill Climbing Approach

Pattern

Observation

Figure 2: Inductive approach

Source: http://www.drburney.net/INDUCTIVE%20&%20DEDUCTIVE%20RESEARCH%20APPROACH%2006032008.pdf accessed on 2nd august 2010.

The Deductive Approach

In this approach development of theory from a thorough test takes place. According to Robson (1993) Deductive approach research progress with five different sequential stages.

Hypothesis (a testable proposition about the relationship between two or more concepts) is deduced from the theory.

To propose a relationship between two specific variables, hypothesis is expressed in operational terms ( which indicates how exactly the variables should be measured)

Experimenting or some other form of empirical enquiry tests the operational hypothesis.

For particular confirmation of the theory or any modification needs, examining the specific outcome of the inquiry must be established.

After testing the operational hypothesis, theory can be modified in the light of findings if necessary.

According Saunders et al.. , the major differences between Inductive and deductive approach can be summarized below in the following table:

Deductive approach

Inductive approach

It has scientific principles

It's related to moving the theory to data.

Operational terms between the variables are explained.

It's the collection of quantitative data.

To ensure data validity application of controls are implemented.

It's highly structured approach.

The researcher has independence of what is being researched

Samples of sufficient data must be selected in order to generalize conclusions.

Researcher attempts to make sense of the data collected.

Humans are related to the concepts involved.

Research context is understood clearly

A flexible structure to the research emphasis as to permit changes as the research progresses.

Less concern with need to generalize

Researcher is also a part of research process.

In this research, a mixed method of both qualitative and quantitative methods of deductive approach is implemented, where there will be examining of specific outcome and analyzing the data through comparison of theories will relate to literature review that's supports the theory and also indicate the need for any modification to the theory.