VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS PHUNG THI PHUONG THAO SOME SUGGESTIONS TO IMPROVE CURRENT ACCOUNT SERVICE ENHANCEMENT AT TECHCOMBANK Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisors: Dr. Tran Doan Kim Ha Noi, 2012 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT SOME SUGGESTIONS TO IMPROVE CURRENT ACCOUNT SERVICE ENHANCEMENT AT TECHCOMBANK Phung Thi Phuong Thao MBA candidate, ReMBA8 Viet Nam National University, Ha Noi. School of Business Supervisors: Dr. Tran Doan Kim December, 2012, 101 pages Current Account (CA) is a very important and indispensable meant for not only industrialists, firms, enterprises etc but also for individual customers, who have demand of banking transactions on a daily basis.
Customers use their CA neither for the purpose of earning interest nor for the purpose of savings, but only for convenience and comfort of the business. The CA interest rate, hence, is quite low or event equal to zero. The balance from CA, then, becomes a low-price and significant source for banks. CA is bringing 10 times profit higher than savings and time deposits; about 2.5 – 4 times higher than loan in NII index.
Also, as showed in some studies, customers tend to chose bank with their inflow and outflow of CA to be primary bank to have other bank’s service relationships. Therefore, banks are focusing on developing current account to be the champion product in market expanding strategy. In Vietnam, as information from Vietnam Card Association, there are about ii TIEU LUAN MOI download : skknchat@gmail.com 20 million people, mainly in cities, joining current account services. It makes the urban market which contributing up to 70-80% income and profit from current account, almost saturated.
It is estimated that “acquiring new customer can cost five times more than the cost of satisfying and retaining current customers” (Philip Kotler, 2001). From this fact, banks are now paying more attention to improve services to satisfy customer who become harder and harder to please. The thesis focuses on discovering deeply insides individual customer using current accounts, what the factors of satisfaction are and giving out some initiatives of customer satisfaction improvement. iii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ACKNOWLEGEMENT.
iv TABLE OF CONTENTS. vi LIST OF TABLES. ix LIST OF FIGURES. xi CHAPTER 1 LITERATURE REVIEW .1 CUSTOMER REALATIONSHIP MANAGEMENT .2 IDIC: Four implementation tasks for creating and managing customer relationships.
The role of expectations and perceptions. Service quality and GAP model .6 CHAPTER 2 TECHCOMBANK CASE STUDY .1 TECHCOMBANK AND CURRENT ACCOUNT SERVICES .2 Techcombank current account strategy and ambitious plan to 2014 .2 Techcombank current account’s performance .2 A REVIEW OF TECHCOMBANK’S CUSTOMER RELATIONSHIP MANAGEMENT.30 vi TIEU LUAN MOI download : skknchat@gmail.2 CRM in process .3 A REVIEW OF TECHCOMBANK’S SURVEY ON CURRENT ACCOUNTS SERVICE .3 Quantitative survey on customer satisfaction.4 Quantitative survey on customer satisfaction.2 CUSTOMER GAP ANALYSIS .3 PROVIDER GAP ANALYSIS.1 Not knowing what customers expect and not selecting the right service designs and standards .2 Not delivering to service designs and standards and not matching performance to promises .1 INTERNAL TRANING AND COMMUNICATION .2 KPIs AND SALES ORIENTATION .3 ENHANCE SERVICE STANDARDZATION .4 IMPROVEMENT PROCEDURE TO REDUCE SERVING TIME.5 DEVELOP ALTERNATIVE CHANNEL TO REDUCE OTC WORKLOAD .60 vii TIEU LUAN MOI download : skknchat@gmail.97 viii TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 2.1: Techcombank current account portfolio to 2014 .2 : Techcombank CA NIM performance .3 : Techcombank CA multiple-service Customer ratio .4 : Techcombank CA’s balance portfolio by products .5 : Prompt responses to customers’ requests .6 : Customer satisfaction on Enthusiastic bank staff .7 : Product structure to fulfill customer needs .8 : Effective added services .9: Survey Systematic Sampling – Single Product user .10: Survey Systematic Sampling – Multiple-Product users .11: Feedback on customer choice (%) .11: Other banking services using (%) .12: Which offer will do customers interested in opening ATM card or registering for internet banking with TCB? .13: Feedback on CA opening and services registered procedure (%) .14: Feedback on card issuance time (%).15: Feedback on Token key issuance time (%) .16: Customer’ first Chanel chosen .17: Prompt responses to customers’ requests .18: Satisfaction level with “Enthusiastic bank staff”.19 : Product structure to fulfill customer needs .20 : Effective added services .42 ix TIEU LUAN MOI download : skknchat@gmail.20 : What factor influences customer to start using a CA ? .21 : Which factor decide the main bank ?.1: Data ware-house status .2: Data avalable sources .3 : GAP on customer satisfation .5 : Sales force activities .techcombank TIEU LUAN MOI download : skknchat@gmail.techcombank LIST OF FIGURES Finger 1.1: IDIC: Analysis and Action (Peppers and Rogers, 2004) .2: GAP Model (Parasuraman, A.3: Provider Gap 1 (Parasuraman, A.4: Provider Gap 2 (Parasuraman, A.5: Provider Gap 3 (Parasuraman, A.6: Provider Gap 4 (Parasuraman, A.1: Current account key proposition [TCB, 2011-2014 strategy] .2: Customer interactions procedure [TCB, 2011-2014 strategy] .3: Cross-sell process [R&D department, PFS action 2013 plan] .4: CRM Capabilities will be mapped [R&D department, PFS action 2013 plan]63 Finger 4.4: CRM assessment Approach [R&D department, PFS action 2013 plan] .techcombank TIEU LUAN MOI download : skknchat@gmail.techcombank CHAPTER 1: LITERATURE REVIEW This chapter reviews literature relating to the research questions and hypotheses of this study. First, the chapter begins with a summary of customer relationship management (CRM); then, the relationships of four implementation tasks for creating and managing customer relationships. Finally the definition of customer satisfaction and the impact of factor on customer satisfaction are provided.1 CUSTOMER REALATIONSHIP MANAGEMENT 1.1 Definition Customer Relationship Management (CRM) is “a set of business practices designed, simply, to put an enterprise into closer and closer touch with its customers, in order to learn more about each one, with the overall goal of making each one more valuable to the firm” (Don Pepper & Martha Rogers, 2004).
In a simple world, CRM is a tool helping an enterprise to set up and manage individual customer relationships. The CRM is also known by other terms such as integrated marketing communication (Don Schultz), one-to-one relationship management (Don Peppers & Martha Rogers), real time marketing (Regis Mc Kenna), customer intimacy (Michael Treacy & Fred Wiersema)… “CRM is more than just an outgrowth of direct marketing and the advent of new technology. It requires new skills, systems, processed and employee mindsets (Philip Kotler, 2001).” The central purpose of CRM are setting up and operating us for the enterprise to focus on increasing the value of customer base, whether through cross- selling (getting customers to buy other products or services) or up-selling 1 (LUAN.techcombank TIEU LUAN MOI download : skknchat@gmail.2 IDIC: Four implementation tasks for creating and managing customer relationships. Setting up and managing individual customer relationships can be broken up into four interrelated implementation tasks: identifying, differentiating, interacting with and customizing treatment.
Identify customer The first task in setting up a relationship is to identify, individually, the party of the relationship as much detail as possible. An enterprise must have an ability to recognize a customer when he comes back in person, directly, by phone, online or whatever. Differentiate customers Customer represents different level of value to the enterprise, therefore, they requires differently from the enterprise. Grouping customer bases on specific variable allows a company (1) to focus its resources on the most value customer groups, and (2) design and control customer-specific strategies of products, services enhancement.
Interact with customer Enterprise must improve the effectiveness of their interactions with customers. Instead of talking to customer with whatever dialog, the company should continue with prior communication if it has occurred before. Customize treatment Base on individual’s needs and value, the enterprise should adapt some aspect of its behavior toward a customer. This customization could involve the way a newsletter is rendered or how a product is bundled.techcombank TIEU LUAN MOI download : skknchat@gmail.techcombank Treating different customer differently could be very expensive if every interaction and transaction had to be individually adapted.
Many enterprises are now using a technique of mass customization. “A mass customizer actually does is not customization, but configuration. The mass customizer pre-produces a dozens, or hundreds, of “modules”, for a product, and/or its related services, delivery options, payment plants, and the like. Then, base on an individual customer’s needs, the company puts different modules together to yield thousands, or even millions, of possible product configuration (Don Pepper & Martha Roger & Bob Dorf, 1999).” The biggest obstacle is ensuring that different parts actually work with one another and can be fit together easily.
The implementation of the IDIC methodology can be broken down into two categories: analysis and action 3 (LUAN.techcombank TIEU LUAN MOI download : skknchat@gmail.1: IDIC: Analysis and Action (Peppers and Rogers, 2004) 1. Definition Customer satisfaction, a term frequently used in Marketing and product R&D, is a measure of how a product or service meet or surpass customer expectation. Satisfaction is a widely accepted concept despite real difficulties in measuring and interpreting. The most common approach is the use of general satisfaction surveys undertaken every few years and designed to track changes over time.techcombank TIEU LUAN MOI download : skknchat@gmail.techcombank There are however, a number of difficulties with the concept of satisfaction (Communities Scotland, 2006): “It is not static, but changes over time; new experiences and levels of awareness will alter the potential levels of satisfaction that could be achieved.
It is likely to be complex and the result of a mix of experiences before, during and after the point at which it is measured. It occurs in social contexts which are varied and changing and may be unpredictable or inexpressible to the service user. It may be difficult to express the reasons for satisfaction; particularly where less tangible aspects of services are being considered. It may be easier to express the reasons for dissatisfaction, particularly if this is the exceptional state.” In order to get a better view on satisfaction, we describe some key elements in this part.
If experience of the service greatly exceeds the expectations clients had of the service, then satisfaction will be high, and vice versa. In the service quality literature, perceptions of service delivery are measured separately from customer expectations, and the gap between the two, P (perceptions) – E (expectations), provides a measure of service quality and determines the level of satisfaction (Parasuraman, A. The role of expectations and perceptions Customer expectation is the main element influencing customer satisfaction. It is important to understand how they are formed.
The basic key factors most commonly seen to influence expectation are: Personal need Any customer or user of a service will have what they consider as a set of key personal needs that they expect from the service. These will vary from service to service and from customer to customer. A clear understanding of these needs is necessary to design an appropriate service. Previous experience 5 (LUAN.techcombank TIEU LUAN MOI download : skknchat@gmail.techcombank Many customers will have had experience of using services before.
This previous experience will influence their future expectation of the service. This can include their past experience of a similar services. Word of mouth communications Expectation of customer may be influenced by other sources other than the service provider itself. Family, friends, colleagues, media…also influence in customer expectation shaping.
Explicit service communications. Statements from leaflets or other publicity material can have a direct impact on expectation. Implicit service communication. This includes factors such as: the physical appearance of the building, well lighted parking lot…which customer may sense only vaguely.
The overall model of key factors influencing expectation of public services is widely recognized that the nature and impact of each of these influences will vary for different customers and services. This is not an additional determinant of expectations in the same way as those outlined above, but it is critical to understand when making comparisons between public services: for some services, the greatest influence on the level of expectations is likely to be the nature of the customer group that is being served.