- Necessity of the thesis. - Furthermore, when Vietnam becomes member of the World Trade Organization, Joint Stock Banks will face increasingly competitive pressure by foreign banks that have much more high power of finance and technology.. - Moreover, I have been working in VPBank, one of the first Joint Stock banks in Vietnam, as an officer for nearly three years.. - Objectives of the thesis. - Based on defining difficulties of VPBank in terms of competing with not only other non-state banks but also state-owned banks, the research will significantly find out a relevant competitive strategy for VPBank in the period from 2006 to 2010 and answer Why VPBank should apply CRM as a competitive tool.. - To get the general objective the research thesis will take detail objectives: i) examining main effects of external and internal environment on VPBank’s operation. - Annual reports, VPBank’s surveys and banking articles. - Structure of the thesis. - in all parts of the company’s operations and structure”. - capability of protecting the market share in the market, keeping close relationship with the current customers, cross-selling and up-selling.. - 1.2 The principle of CRM. - The principle of CRM is that all customers are not the right customers, so in CRM each customer group will be treated in the different ways.. - The first group of buyers: Those customers who represent 10% of the company’s business and are the most profitable should be the first to be targeted for CRM. - The purpose of the CRM efforts will be retention. - The middle group of buyers: The balance of the customers in top 40% or 50% as ranked by sales and profit. - Typically, this group will represent almost half of the customer file. - Hence this simple analysis has greatly reduced the size of the challenge of implementing CRM.. - 1.3 The element of CRM:. - 1.4 The characteristics and the challenges of CRM:. - 1.4.1 The characteristics of CRM:. - Normally, each company has three classes of customers:. - 1.4.2 The challenges of CRM:. - Have to change the policies and process in the whole. - In the banking industry, 65% of customer will chose other suppliers if they are not satisfied.. - In Pareto's case it meant 20 percent of the people owned 80 percent of the wealth. - In Juran's initial work he identified 20 percent of the defects causing 80 percent of the problems.. - Project Managers know that 20 percent of the work (the first 10 percent and the last 10 percent) consumes 80 percent of your time and resources.. - 2.2 Situation of VPbank 2.2.1 Vision. - Up to 2010, VPbank will become the first-ranked commercial bank in the northern of. - Vietnam in the credit service. - You can see the total mobilized funds in the period as below:. - Total customer’s deposits in the period 2001-2004. - The customer’s deposits. - Forthly, VPBank has the strong relationship in the inter-bank market. - With new application software, the competitors can deploy some new services that attract customers like mobile-banking, home-banking…Although these services are not popular with the medium and low income customers now, they promote brand names for VPBank’s competitors.. - With VPBank, the domestic competitors do not arise but it is easy to appear the merge and acquisition trend in the future. - Secondly, Vietnam government are maintaining the market economy, so in the future the growth rate of Vietnam economy goes up stably and firmly. - Fourthly, the banking industry has the potential development trend and high profitability, at this time the stocks of commercial banks are so attractive in the investors’ eyes. - We can understand where VPBank is standing in the market and what competitive advantages from VPbank are better than others. - VPBank does not expose anything that is the best, VPBank only has some points that are relatively strong and able to compete (not much worse than VPBank’s competitors), they are credit business and service after sale. - In order to strengthen VPBank’s competitive advantage, they should apply CRM.. - The third phase (2010): Review, evaluate and develop CRM 3.2.1 The first phase: Build foundation for CRM. - However most of the successful companies are small and medium ones, VPBank must have the preparation period in order to build the foundation for CRM.. - As analyzed in the theory part, CRM consists of three elements: People, Procedure and Technology. - The tasks of CRM core team:. - In the first step to implement CRM at VPbank, we must build a qualified customer database. - it is the foundation of CRM. - There are some activities that help VPBank to attract more new customers, especially in the credit business- the strategic business of VPBank:. - o The students, who are in the last year or have just graduated, are also the potential customers for VPBank. - Maybe, in the current time they have not so much demand of banking services but in the near future everything will change.. - We need a year for this phase, after one year VPBank must have some KPI to evaluate for the preparation of the CRM foundation, they are:. - The customer retention and the percentage of customers who go away (closed accounts, non-performing accounts…).. - Train the employees from all levels, all departments about not only the tasks and functions that are changed when VPBank applies CRM but also the serving and communicating skill in the new environment.. - Standardize all steps in the procurement to bring the best and stable quality services to customers (one of the main limitations in service industry is inconsistent in the service quality. - CRM software is the important tool to help VPBank not only collect and record the information from their customers but analyze and forecast the demand of customers in the current period or near future as well. - VPBank will meet all demands completely and perfectly and they will understand their customers deeply, they can build the relationship based on the customers’ wishes, habits, and needs. - The profit margin in the individual customer may be reduced but the total profit will increase.. - In the CRM implement process, the people are the key factor to succeed. - The objectives and the benefits of CRM are. - According to the statistic from Havard business review, the failure of CRM is not mainly from CRM software solution but mainly from each individual person in the company. - 3.2.2.3 Accomplishment of standardization of the procedure. - The benefits of standardization of the banking procedure are as followings:. - Improving the prestige and making differentiation for the bank - Improving efficiency and easily evaluating work of each staff. - Saving time for customers and facilitating them in transactions with the bank - Reducing errors in work. - The change and standardization of the procedure should be clearly declared and lectured to each staff to ensure that all the customers of the whole system of the bank are served in a speedy and professional manner.. - 3.2.2.4 Classification of customers. - It depends on the target of the bank in implementing CRM that the bank could choose certain criteria to classify customers. - For example, the bank chooses Profitable Capability and Satisfaction Level to classify customers:. - Satisfaction Level reflects satisfaction and feelings of customers with services. - profit for the bank. - Based on each type of group, the bank must plan:. - Call center: Maximize the capability of meeting customers’ demand, customizing and consulting.. - Some incentives to spending activities of customers : o In sense of spirit:. - Keep in mind the name of customers. - The bank should send flowers and/or gifts and/or greetings cards for congratulations.. - Send news, magazines periodic updated information of the bank and customer- oriented descriptions of services and instructions of procedure (the easiest the best) to customers.. - Make call to customers to inquire after and inform them about new policies in case they have no transactions with the bank for a certain/stipulated period of time or intend to use banking services of other banks.. - Upon various numbers of total score, the bank will grant out many options of rewards for customers.. - Herewith are some of the rewards granted to customers - Reduced price and fee of banking services - Rewards and preferred interest rates - New products without fee in certain time. - It depends on kind of customers that the bank choose the appropriate customer incentive policy. - It is noted that this is the most important phase in implementing CRM plan at the bank. - The success of this phase could determine the success of the whole program. - The profit growth of the bank. - Number and ratio of customers that do not use the bank’s services anymore in certain time. - Profit ratio derived from the customers that leave the bank in certain time. - Number of new customers (In implementing CRM, the target is to maintain the current customers, however, it is the advantage of CRM that attracts more new customers) 3.2.3 The third phase: CRM development. - Some of CRM solutions of privatization:. - It could be done through call/mail to require after or advise information of the bank, etc. - All of the channels should be directed to customers with real name.. - If it is possible, the bank will offer customer-oriented products.. - For example, on the chance of 8/3 or 20/10, the bank should send flowers to female ones with various kinds, etc.. - Nowadays, if one bank operates without any competitive advantage, it is not sure that the bank can no longer exist. - it cannot live without the customers’ belief.. - Given the competitive nature of the banking business with its intricate diverse demands today, nurturing and deepening customer relationships is integral to any bank’s success. - After all, satisfied customers are loyal customers, their retention rate is much higher and so is their overall profitability for the bank. - A powerful CRM solution provides a complete perspective of a customer’s relationship with the bank across multiple channels like e-mail, telephone, IVR, branch, web chat and across multiple products ensuring that every bank employee is better informed to deal effectively with customers and their needs. - Further, in the face of the recent spate of Know Your Customer (KYC) regulations, CRM systems provide the optimum solution to the need for unified customer data, information and intelligence.. - So, the effective way to keep customer in the long term is customer relationship management (CRM). - The Customer Management. - CRM unplugged releasing CRM’s strategic value.