MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --------- Trần Quốc Ánh CRM ACTIVITIES AT VIETCOMBANK HO CHI MINH CITY BRANCH MASTER THESIS Ho Chi Minh City, 2011 123doc MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY --------- Trần Quốc Ánh CRM ACTIVITIES AT VIETCOMBANK HO CHI MINH CITY BRANCH Major: Business Administration Code: 60.05 MASTER THESIS Supervisor: Trần Hà Minh Quân Ho Chi Minh City, 2011 123doc 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 123doc 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 123doc Table of Contents Abstract .ii Table of Contents.iii Chapter 1: Introduction .1 Statement of Research Problem .2 Objectives of the Research and Research Questions .4 Limitation of the Study .5 Structure of the Thesis .7 Summary of the Chapter .8 Chapter 2: Literatue Review on Customer Relationship Management .1 Customer Relationship Management (CRM) .2 Customer Relationship Management (CRM) .1 Buyer-Seller Relationship.2 Seller’s CRM Process Cycle.4 Organisational Structure and People for CRM .5 Benefits of CRM.6 The Reasons to Apply CRM in the Financial Services Industry .7 CRM Activities in the Banking Sector .8 Research Questions and Frame of Reference .32 Summary of the Chapter .36 Chapter 3: CRM Activities at Vietcombank Ho Chi Minh City Branch .1 Overview about Vietcombank .2 Investigating CRM Actitivies at Vietcombank Ho Chi Minh City Branch .1 How do people at VCB HCM view CRM? .2 How is the CRM Process at VCB HCM be described?.3 How the information technology being applied in CRM at VCB HCM? 45 3.4 How are the CRM organization structure and people at VCB HCM be described? .55 Summary of the Chapter .1 Implicated Recommendations for VCB HCM. CRM Organisational Structure.2 General Recommendation for VCB HCM.3 Recommendation for further research .68 iv 123doc 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 re- establish 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 123doc 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 long- range 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.2 Objectives of the Research and Research Questions 2 123doc 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 123doc 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. 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 123doc 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.