Tài liệu Crm activities at vietcombank ho chi minh city branch

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --------- Tr n Qu c Ánh CRM ACTIVITIES AT VIETCOMBANK HO CHI MINH CITY BRANCH MASTER THESIS Ho Chi Minh City, 2011 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --------- Tr n Qu c Ánh CRM ACTIVITIES AT VIETCOMBANK HO CHI MINH CITY BRANCH Major: Business Administration Code: 60.34.05 MASTER THESIS Supervisor: Tr n Hà Minh Quân Ho Chi Minh City, 2011 Abstract Globalization and technology improvements have exposed companies to a situation with tough competition. In this new era, companies are focusing on managing customer relationships in order to efficiently maximize revenues. Today marketing is not just developing, delivering and selling, it is moving towards developing and maintaining long-term relationships with customers. Relationship marketing is becoming important in financial services. Managers really need to look at areas where opportunities lie, because industry consolidation, virtual delivery channels and the ability to move money around with a click of a mouse are making it easier for customers to leave one bank for another. In this situation CRM is an opportunity that banks can avail to rise above minor advantages by developing actual relationships with their customers (Rahman, 2005). The purpose of this study was to investigate CRM activities (view of CRM, CRM processes, CRM technology and CRM structure and people) that are already exist at one of the biggest Vietnamese Commercial Banks in the South of Vietnam_Vietcombank Ho Chi Minh City Branch. The results revealed that the Bank is already adopting CRM. The Bank has implemented CRM processes which is considered necessary for a customer centric organization. The Bank has integrated technology with the business process in a good way and is organisating its structure towards CRM. So far, the Bank has achieved a certain rate of success in terms of customer satisfaction and customer relationship management. A descriptive approach with exploratory and explanatory touches, therefore, would reveal important insights and draw some conclusions for management. Keywords: Customer relationship management (CRM), qualitative research i Acknowledgement This thesis was written from April 2010 to June 2011 at Hanoi and Ho Chi Minh City. During the entire process of this thesis, many people encouraged and helped me to make this work possible. I would like to take this opportunity to show my sincere gratitude and appreciation to all people involved in this thesis work. Firstly, I would like to express my sincere gratitude to my supervisor, Dr. Tran Ha Minh Quan, Executive Associate Dean, International School of Business for his helpful guidance, support and contribution and for giving me the opportunity to work with him on this thesis. Thanks for providing me with thoughtful supervision, invaluable guidance and constructive suggestions for this thesis. I would also like to thank the respondents at Vietcombank Ho Chi Minh City Branch for their fruitful discussion and valuable information during my interview and data collection process. This study would not have been possible to be executed without their helps. On a personal level, my sincerely appreciation went to my parents, my brother, my sisters, and my relativies for their great support whenever I got any problem. Ho Chi Minh City, Vietnam June 2011 ii Table of Contents Abstract ...................................................................................................................................i Acknowledgement .................................................................................................................ii Table of Contents..................................................................................................................iii Chapter 1: Introduction ..........................................................................................................1 1.1 Statement of Research Problem .............................................................................1 1.2 Objectives of the Research and Research Questions .............................................2 1.3 Research Methodology ..........................................................................................5 1.4 Limitation of the Study ..........................................................................................7 1.5 Structure of the Thesis ...........................................................................................7 Summary of the Chapter ........................................................................................................8 Chapter 2: Literatue Review on Customer Relationship Management .................................9 2.1 Customer Relationship Management (CRM) .........................................................9 2.1.1 Relationship Maketing (RM) ......................................................................9 2.1.2 Customer Relationship Management (CRM) .............................................9 2.2. CRM Process ........................................................................................................14 2.2.1 Buyer-Seller Relationship.........................................................................14 2.2.2 Seller’s CRM Process Cycle.....................................................................16 2.3 CRM Technology .................................................................................................18 2.4 Organisational Structure and People for CRM .....................................................25 2.4.1 Organisational Structure ...........................................................................25 2.4.2 People........................................................................................................26 2.5 Benefits of CRM...................................................................................................27 2.6 The Reasons to Apply CRM in the Financial Services Industry ..........................29 2.7 CRM Activities in the Banking Sector .................................................................30 2.8 Research Questions and Frame of Reference .......................................................32 Summary of the Chapter ......................................................................................................36 Chapter 3: CRM Activities at Vietcombank Ho Chi Minh City Branch ............................37 3.1 Overview about Vietcombank ..............................................................................37 3.2 Investigating CRM Actitivies at Vietcombank Ho Chi Minh City Branch ..........39 iii 3.2.1 How do people at VCB HCM view CRM? ..............................................39 3.2.2 How is the CRM Process at VCB HCM be described?............................41 3.2.3 How the information technology being applied in CRM at VCB HCM? 45 3.2.4 How are the CRM organization structure and people at VCB HCM be described? .............................................................................................................51 3.2.5 Conclusions...............................................................................................55 Summary of the Chapter ......................................................................................................57 Chapter 4: Recommendation ...............................................................................................58 4.1 Implicated Recommendations for VCB HCM......................................................58 a. CRM Process ....................................................................................................58 b. CRM Technology ..............................................................................................59 c. CRM Organisational Structure.........................................................................61 d. CRM People......................................................................................................62 4.2 General Recommendation for VCB HCM............................................................63 4.3 Recommendation for further research ..................................................................64 References............................................................................................................................65 Interview Guide ...................................................................................................................68 iv Chapter 1: Introduction 1.1 Statement of Research Problem In this Internet age, when the customer is having access to a variety of products and services it is becoming very difficult for banks to survive. In this situation, when customer inquiries are not met easily or transactions are complicated, the customer will ask for new levels of services, and only chose those credit institutions who are making a real effort to provide a high level of quality, fast and efficient service through all the bank’s touch points, call centers, ATMs, voice response systems, internet and branches (Puccinelli, 1999). Managers really need to look at areas where opportunities lie because industry consolidation, virtual delivery channels and the ability to move money around at the click of a mouse are making it easier for customers to pack their bags and say bye to the bank (Puccinelli, 1999). Of course, only depending on technological capabilities can’t ensure customer service (Dyche, 2001). Researches suggest that customer satisfaction, fundamental concept of relationship marketing, is important in achieving and retaining competitive advantage. Many banks today are racing to reestablish their connections to new as well as existing customers to boost long-term customer loyalty. Some banks are competing effectively and winning this race through the implementation of relationship marketing principles using strategic and technology-based customer relationship management (CRM) applications. Banking in Vietnam has traditionally operated in a relatively stable environment for decades. However, today the industry is facing a dramatically aggressive competition due to three fundamental factors: new technological opportunities, increasing competition from new market entrants, and customers’ changing behaviour. The net result of the recent competition and legislation is that local 1 banks have lost a substantial proportion of their domestic business to foreign banks and financial instutions. Competition will undoubtedly continue to be a more significant factor. Finding a place in this heating sun becomes vital to the longrange profitability and ultimate survival of the Vietnamese banks. Those banks that are not considering the new atmosphere to build and protect their competitive position will likely become victims of that heating sun. In this difficult situation CRM is an opportunity that banks can avail to rise above minor advantages by developing actual relationships with their customers. Unlike manufacturing and some service industries, bankers are not only selling products and services. First and foremost, they are selling their organization reputation with every “customer relationship”. A bank has to create customer relationships that deliver value beyond the provided by the core product. This involves added tangible and intangible elements to the core products thus creating and enhancing the “product surrounding”. That is the nature of competition. If there are many others who can do what you do, then you do not have many added values. This dynamic erodes your added value. To protect its added value, a bank needs to manage, create and enhance long-term customer relationships. CRM is not a new terminology in Relationship Marketing in banking on the world. However, it is likely in the premature stage of the implementation at Vietnamese Commercial banks, eventhought at Vietcombank Ho Chi Minh City Branch (VCB HCM), one of the biggest commercial banks in the South of Vietnam. Based on this, the research problem has been formed as “How are the customer relationship management activities at Vietcombank Ho Chi Minh City Branch described”. Following the investigation, some recommendations are proposed to VCB HCM. 1.2 Objectives of the Research and Research Questions 2 Bearing in mind that the phenomenon of CRM in banking is quite recent in Vietnam, the purposes of this research is to investigate CRM activities that already exist at VCB HCM. Afterward, some recommendations were proposed to improve CRM activities of the Bank. From the research objectives above, some research questions have been designed to support different corners of the research. The first question is “How do people at VCB HCM view CRM?”. This question is to evaluate their attitudes toward CRM activities. Banks are realizing that customers have different economic value to them, and they are subsequently adapting their customer offerings and communications strategy accordingly. However, more than half of all companies investing in CRM consider it a disappointment, according to several recent surveys (Anupam et al, 2004). Most show weaknesses in one or more of the following areas – market analysis, marketing strategy, distribution channel management, program planning, people, processes, data management, understanding the customer’s perspective, and measurement (Anupam et al, 2004). Consequently, the second question will find out “How is the CRM process at VCB HCM be described”. CRM technology is the information technology that is utilized for the specific purpose of better initiating, maintaining, and/or terminating customer relationships (Werner et al, 2004). It plays a critical role in the CRM activities and contributes to improved organizational performance in the market; also, it can be a powerful tool to help banks segment clients and provide targeted products and services (Calvelli, 2004). Banks can better understand their customers' needs and preferences by the use of custom-developed methodologies, software, and Internet capabilities. 3 The technological issue can offers a natural linkage between the internal environment and the interaction process. Marketers and managers must be aware of new developments in technology and their possible effects because technologies, consumers and organizations are a function of a win-win interaction (Zineldin, 2000). Thus, it is necessary to investigate the third question: How is the information technology being applied in CRM at VCB HCM? The last question is “How are the CRM organizational structure and people in banks be described?”. It is clear that managing customers better is supported by a broad supporter of the issue, cross-functional working at different levels of the organization. So it is increasingly important to restructure the organization for CRM. Building, modifying, or running a CRM solution involves a large numbers of roles. It can include systems experts; business analysts; backroom operations specialists, managers, and frontline sales and service people who are responsible for inputting much of the data the CRM needs to create rich insights (Anupam et al, 2004). Practitioners believe that the key to organizational effectiveness is to find the good people and get them into positions of power (Galbraith.1997). All new ideas originate from employees. Identifying who is responsible for which results is success requires. Thus, this 4th question is to know how the banks structure their organizations and also to know how they trains and motivates employees who can share the values of the bank and plan those values at every point of customer and consumer interaction. RQ1: How do people at VCB HCM view CRM? RQ2: How is the CRM process at VCB HCM be described RQ3: How is the information technology being applied in CRM at VCB HCM? RQ4: How are the CRM organizational structure and peoplea at VCB HCM be described? 4 1.3 Research Methodology The research problem is to get better understanding of how CRM actitivies of Commerical Bank in Vietnam be described? The aim of this research was clearly structured, so the purpose of research is descriptive. We intended to describe the area of research and tried to find out the differences and similarities with the reviewed theories. However, this thesis is also somewhat exploratory. Because CRM is a rather new area of interest for Banks and also by the fact that we had not been able to find studies that focuses on exactly the same topic as we chosen to do in this thesis. Research approach The study was started by using existing theories in the area of CRM to get a solid foundation of the research and to further construct the questions in the interview guide and then logically to draw conclusions based on the knowledge and empirical findings. This research was studied on both types of data, primary data and secondary data, since the face-to-face and telephonic interviews were source of primary data, and web site data was our source of secondary data. The primary data can be considered as qualitative data since the correspondent’s opinions and point of view had a great importance of the outcome of this study. The data is also based on meanings expressed through words and not derived from numbers. Consequently the qualitative method is conducted in this study. To deeply understand attidutes of employees of VCB HCM toward CRM, 13 faceto-face interviews represented for many departments from management level to normal staffs were conducted. The interviewees were: 5 No. Name Title Department 1 Mr.Son Deputy General Manager In chage of overall business operation 2 Mr.Toan Deputy General Manager In charge of Risk Management 3 Mr.MinhTriet Deputy Head of Commercial Banking Commercial Banking 4 Mr.Hoai Nam Credit Officer Commercial Banking 5 Mr.Cuong Credit Officer Commercial Banking 6 Mr.Chi Hieu Deputy Head of Personal Banking Personal Banking 7 Ms.Hoai Ngan Credit Officer Personal Banking 8 Mr.Nghia Credit Officer Personal Banking 9 Ms.Thanh Thao Counter Staff Personal Financial Transaction Department 10 Ms. Cam Tu Counter Staff Personal Financial Transaction Department 11 Ms.Linh Giang Deputy Head of Payment and Operation Payment Department Department 12 Ms.Giau Staff Payment Department 13 Ms.Hoa Staff Payment Department The personal interviews lasted from 20 to 45 minutes and were conducted in Vietnamese. In the interview, the interview guide (see appendix) was followed but other relevant questions related to this study were also asked at the interview. In addition, the free-response interview with open-ended questions was applied so that interviewees have free choice of words and can express about the phenomenon freely. Moreover, 10 telephonic interviews were also conducted to employees working in back-office departments such as guarantee deparment, credit administration department, bulk cash department. Their views about CRM and CRM actitives being applied at VCB HCM were also consolidated so that this study could have a larger view of the Bank's perspective toward CRM. 6 1.4 Limitation of the Study Due to constrain of time and work commitment, the study only focused on internal views of VCB HCM's employees about CRM being applied at VCB HCM. Therefore, feedbacks or evaluations of their clients about their CRM actitives hadn't been surveyed and presented in this thesis. Accordingly, the scope and depth of this thesis might not be as detailed as the author originally expected it to be. 1.5 Structure of the Thesis The study consists of four chapters. Chapter one, Introduction, contained the research background followed by problem discussion and also covered the adopted methodological choices for this study. Chapter two, Literature Review on CRM, presented a review of previous researches relevant to the purpose of this thesis. Chapter three, CRM activities at Vietcombank Ho Chi Minh City Branch, would present and analyse the collected data from documentation and interview. The thesis ended with chapter four, Recommendation, where implicated and general recommendation for management were drawn based on the findings of the research conducted. 7 Summary of the Chapter The primary goal of this chapter was to introduce the area in which the study was conducted, drilling down from a general viewpoint towards the specific study problem. The chapter started with a brief introductory background covering the scope of this thesis. Thereafter, the research problem, research purpose and questions of this thesis were formulated followed by the limitations of the research study. The next chapter comprises the relevant literature review. It will cover related issues and theories of different CRM activities in banking which mentioned in previous researches. 8 Chapter 2: Literatue Review on Customer Relationship Management 2.1. Customer Relationship Management (CRM) 2.1.1. Relationship Maketing (RM) Existing research states that relationships are the foundation to the effective development and adaptation of new business philosophy, although businesses have taken care of relationships with their customers for many centuries (Gronroos, 1994). Relationships necessitate much more than mere transactions. Rather, they represent strategic and tactical issues based on a new philosophical shift that is geared towards long-term organisational survival (Sheth and Parvatiyar, 1995) At the strategic level, organisations are encouraged to define themselves as service organizations, and do their business from a process-management perspective that develops partnerships, alliances, and networks (Gronroos, 1996) Relationship marketing got popular in 1990s but it has a long history under different names. In its beginning, one-to-one marketing appeared in the mid 1990s, which changed into CRM (Customer Relationship Management) as the No. one business buzzword at the turn of the millennium (Storbacka, 1994). Today, CRM is the dominant and has generally been used. (Reynolds, 2002) 2.1.2. Customer Relationship Management (CRM) Customer relationship management (CRM) is one of the fastest growing management approaches being adopted across many organizations. CRM has been widely regarded as a company activity related to developing and retaining customers through increased satisfaction and loyalty. Customer relationship 9 management (CRM) is a customer-focused business strategy that dynamically integrates sales, marketing and customer care service in order to create and add value for the company and its customers. There are various definitions of CRM in the literature. Ovum (Bradshaw and Brash, 2001), an independent research and consulting company, define CRM as: a management approach that enables organizations to identify, attract and increase retention of profitable customers, by managing relationships with them. According to Bose and Sugumaran (2003), CRM is about managing customer knowledge to better understand and serve them. It is an umbrella concept that places the customer at the center of an organization. A survey done by META group suggests that there are different answers about the view of CRM (Greenberg, 2004). Robert Shaw (quoted by Gooding, 2003) defined CRM as “an interactive process for achieving the optimum balance between corporate investments and the satisfaction of customer needs to generate the maximum profit. CRM involves: • Measuring both inputs across all functions including marketing, sales and service costs and outputs in terms of customer revenue, profit and value. • Acquiring and continuously updating knowledge about customer needs, motivation and behaviour over the lifetime of the relationship. • Applying customer knowledge to continuously improve performance through a process of learning from successes and failures. • Integrating the activities of marketing, sales and service to achieve a common goal. • The implementation of appropriate systems to support customer knowledge acquisition, sharing and the measurement of CRM effectiveness. 10 • Constantly flexing the balance between marketing, sales and service inputs against changing customer needs to maximize profits.” However, a lot of researchers and practitioners relate CRM with people, processes and technology. Injazz (2004) defined “CRM is a combination of people, processes and technology that seeks to understand a company’s customers. It is an integrated approach to managing relationships by focusing on customer retention and relationship development.” CRM is a coherent and complete set of processes and technologies for managing relationships with current and potential customers and associates of the company, using the marketing, sales and service departments, regardless of the channel of communication. CRM is a relatively new management concept – a new approach to managing customers –in the professional service sector. CRM, though not a formal program, generally combines various elements of technology, people, information resources and processes in order to create a business that takes a “360-degree” view of its customers. As a point of reference, the definition CRM is: activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contact. CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees (Galbraith, 1999). Sin and Tse (2005) hypothesize that CRM is a multi-dimensional construct consisting of four broad behavioural components: key customer focus, CRM organization, knowledge management, and technology-based CRM (see Figure 1.1). 11 1. Key customer focus: Key customer focus involves an overwhelming customercentric focus, and continuously delivering superior and added value to selected key customers through personalized/customized offerings. Key facets of this dimension include customer-centric marketing, key customer lifetime value identification, personalization, and interactive-creation marketing. 2. CRM organization: CRM essentially means fundamental changes in the way that firms are organized and business processes are conducted. Firms should pay heightened attention to the organizational challenges inherent in any CRM initiative. The key considerations to successfully organize the whole firm around CRM include organizational structure, organization-wide commitment of resources, and human resources management. 3. Knowledge management: According to the knowledge-based view of the firm, the primary rationale for a firm’s existence is the creation, transfer, and application of knowledge. From a CRM perspective, knowledge can be understood as what has been learned from experience or empirical study of consumer data. Key facets of “knowledge management” include knowledge learning and generation, knowledge dissemination and sharing, and knowledge responsiveness. 4. Technology-based CRM: Accurate customer data is essential to successful CRM performance and, consequently, technology plays an important role in CRM in adding to firm intelligence. In fact, the startling advances in IT equip enterprises with the capability to collect, store, analyze, and share customer information in ways that greatly enhance their ability to respond to the needs of individual customers and thus to attract and retain customers. The promise of one-to-one relationships, customer-value analysis, and mass customization are now brought to reality by unprecedented advances in IT, transforming the traditional 12 approach to CRM to an integrated, web-enabled approach, featured by tools like customer information systems, automation of customer support processes, and call centers. CRM calls for “information-intensive strategies” which utilize computer technologies in building relationships, leveraging existing technology and rigorously linking technology deployment to targeted business initiatives. Computer technologies such as computer-aided design/manufacturing, flexible manufacturing systems, just-in-time production databases, data warehouses, data mining, and CRM software systems enable firms to provide greater customization with better quality at lower cost. It also helps staff at all contact points serve customers better. Many customer-centric activities would be impossible without appropriate technology. Obviously, technology is certainly one of the key enabling or supporting factors in CRM, but by itself it does not constitute CRM. Figure 2.1: The four dimensions of CRM (Sin and Tse2005) The above four dimensions of CRM is in accordance with the notion that successful CRM is predicated on addressing four key areas: strategy, process, technology, 13 structure organisation & people, and that only when all these four work in concert can a superior customer-relating capability emerge. 2.2. CRM Process According to Peck (1999), value is created for customers and consumers through “process”. Processes are ‘the way we do things’. It means they are linked sets of activities that enable market demand to be satisfied (Peck, 1999). In the following part, there are two types of CRM process to be presented, one describe the buyerseller’s relationship development stages. The other is concerning the seller’s intention to build the long relationship with their customers. 2.2.1. Buyer-Seller Relationship According to Egan (2001) some times it takes a lot of time and effort to develop relationships. Dwyer and Tanner (2001) talked about the same phenomenon and developed marriage metaphor using business examples to illustrate the concept from interpersonal relationships research. Dwyer and Tanner (2001) described buyer seller relationship in different relationships development stages, which are shown in figure 1.2 Figure 2.2: Evolution of Relationships (Dwyer et al. 2001) 14