OFF CAMPUS DIVISION PROJECT REPORT BSc Business Management A study on the importance of customer relationship management (CRM) capabilities in enhancing customer retention at Tien Phong Commercial Joint Stock Bank. Student’s Name: Do Thanh Dat Student’s ID: 2124761 Email: dtd2ocd@bolton.uk Tutor: Dr David Ratcliffe Supervisor: Dr Mathew Shafaghi Cohort:16 Word Count: 12663 Words HO CHI MINH CITY, DECEMBER - 2022 University of Bolton 1 DECLARATION The dissertation is a product of my independent investigation conducted with the support and guidance of my supervisor, Dr. Mathew Shafaghi, as well as my colleagues at the Thao Dien branch of Tien Phong Commercial Joint Stock Bank (TPBank). All figures presented in this report are entirely accurate, and all citations have been diligently adhered to in accordance with regulatory guidelines.
In the event of any fraudulent activity, I accept full responsibility for the content of this report. Students Signature Ho Chi Minh City, December 27, 2022 Datt Đỗ Thành Đạt 2 ACKNOWLEDGEMENT The topic of my dissertation examines the intersection between theory and practice, drawing on the scientific knowledge I have gained during my four years of study at the Banking University of Ho Chi Minh City. I am grateful for the invaluable assistance of my teachers and friends in completing the project entitled "A Study on the Importance of Customer Relationship Management (CRM) Capabilities in Enhancing Customer Retention at Tien Phong Commercial Joint Stock Bank." The completion of this research would not have been possible without the support and encouragement of my teacher, Professor Dr. David Ratcliffe, who provided me with the opportunity to work and study under his guidance.
I am grateful to him for arranging several discussions to guide me in the right direction. I extend my heartfelt gratitude to Professor Dr. Mathew Shafaghi, who offered me the necessary guidance and motivation to persevere through this journey. I am deeply grateful for his constant encouragement and valuable feedback to my dissertation.
It has been an honor to be mentored by such talented, dedicated, and supportive individuals throughout my academic pursuits. I would like to express my gratitude to all the participants, especially the interviewees, who generously contributed their time and insights to this study on CRM in the banking industry. Lastly, I would like to thank my family for their unwavering support and encouragement throughout my studies. Their unwavering dedication and love have been a constant source of inspiration for me.
Despite my best efforts, I acknowledge that this report may contain errors, given my limited time and knowledge. 3 ABSTRACT The importance of Customer Relationship Management for banks has increased as competition in the market intensifies. Focusing on CRM plans banks' ability to accurately understand customers' current needs and behaviours, including past actions and future. This practice enables banks to design CRM strategies based on individual customer preferences to meet their needs.
The implementation of CRM in the banking industry greatly depends on organizational factors such as human resources and systems. Vietnam's banking industry currently benefits from advanced technologies, making it essential for organizations to investigate key competitive capabilities related, especially the use of current CRM systems. This study examines issues related to the overall system and policies of CRM in banks using both quantitative and qualitative research methods. The study developed questionnaires and interview formats to collect necessary data from the field and focused on the case study method, choosing TPBank as a bank with strong technology development.
The survey results were analysed, compared, and discussed using an in-depth cross-case analysis method to identify strengths, weaknesses, and some issues related to CRM operations in the banking sector. The findings suggest that although TPBank's system and CRM capabilities are optimized and developed compared to the market, a more refined CRM strategy is needed due to competition and convenience of customer service. Furthermore, while CRM strategies are seen as value-added to some extent, these strategies have existed for many years and need to be updated and changed to help the bank meet current business challenges and priorities. 4 LIST OF TABLES AND FIGURES Figure: Figure 2.
The three dimensions of CRM (Ocker and Mudambi, 2003). The four dimensions of CRM (Sin at al. Gantt chart of time scale. The bar chart responses to customer-question 8.
The table of interview participants. The demographic characteristics of the sample. The Descriptive Statistics. The table of responses to customer-question 1,2,3,4.
The table of responses to customer-question 5,6,7. The table of responses to customer-question 9. The table of responses to customer-question 10,11. The table of responses to customer-question 12,13,14,15.
The table of responses to customer-question 16,17,18. 61 5 LIST OF ACRONYMS Acronyms Original Word TPBank Tien Phong Commercial Joint Stock Bank CRM Customer Relationship Management ASEAN Association of Southeast Asian Nations AI Artificial Intelligence SFA Sales Force Automation systems RBV Resource-Based View GEN Z Generation Z GEN Y Generation y CRMT Customer Relationship Management Technology CO Customer Orientation SC Service capability CR Customer Retention 6 TABLE OF CONTENTS Chapter 1: Introduction. Background to The Problem:. Statement of The Problem: .3 Introduction to Tien Phong Commercial Joint Stock Bank: .6 Scope of Research:.
14 Chapter 2: Literature Review .2 Theoretical Background of CRM in banking:. Conceptualization of Customer Relationship Management (CRM):. The Purpose of Customer Relationship Management:. Aspect of CRM Systems:.
Customer Relationship Management Implementation:. The Drivers of CRM Capability:. The Functionality of CRM in the Banking Industry:. Findings from literature review:.
30 Chapter 3: Research Methodology. The stand of philosophical research method:. Research Methodological Choice:. Techniques and Procedures:.
Data Collection Technique:. The Survey Questionnaire:. The validity and reliability of research instrument:. 46 Chapter 4: Findings and Analysis.
Qualitative results and analysis:. CRM Operation at TPBank:. Quantitative results and analysis:. A Description of The Study Sample: .1 CRM Technology at TPBank:.
Customer Orientation at TPBank: .3 Service Capability at TPBank:. CRM Organization at TPBank:. 64 8 Chapter 6: Recommendations and Further Research. Improve CRM technology:.
Improve customer orientation:. Improve service capability and organization:. 83 RESEARCH INSTRUMENT - CUSTOMER QUESTIONNAIRE. 87 CUSTOMER QUESTIONNAIRE SUMMARY.
89 RESEARCH INSTRUMENT - STAFF INTERVIEW QUESTIONS. 91 RESEARCH ETHICS CHECKLIST – FORM RE1. Background to The Problem: Currently, there is a strong trend of globalization and world economic integration accompanied by rapid advancements in scientific and technical progress across all fields (Nam and Barnett, 2011). Ocampo nd n (2003) have further supported this notion by highlighting that technological innovations have resulted in unprecedented improvements in productivity, economic growth and international trade.
The liberalization of trade, financial flows and investment in developing countries, combined with the speed of liberalization, has emerged as a crucial factor in this phase of globalization. These developments have led to the establishment of a new international banking network that facilitates financing of international trade (World Bank Group, 2011). However, while the global expansion and industry consolidation have had positive impacts on banks, it is important to question whether they can effectively deploy technology investments and developments on an industry-wide basis to achieve outstanding performance (Kamath et al. Moreover, according to Okin and Pfau (1999), a company that optimally leverages its intellectual assets, capabilities and resources will develop the most promising business opportunities.
These trends highlight the growing significance of growth opportunities in the financial services industry in emerging Asian markets such as China, India and ASEAN countries (Kumar, 2014). Pham et al. (2020) argue that a compelling case of a young and dynamic economy that has achieved significant success over the past 30 years is Vietnam, specifically in the ASEAN-5 economies of Indonesia, Malaysia, Philippines, Singapore and Thailand. Le (2019) asserts that Vietnam's banking 10 system plays a leading role in the country's economy, contributing up to 18% to the Gross Domestic Product (GDP) annually (Stewart et al.
Thus, as the banking industry occupies an important place in the economy, the Vietnamese banking industry must be continuously reformed in order to function effectively during the events of history. Continuous innovation necessitates that necessitates that each Vietnamese commercial bank must adopt appropriate solutions to develop, enhance competitiveness, master the domestic financial market and expand to the international financial market (Dinh and Kleimeier, 2007). According to Akther and Rahman (2022), integration of digital transformation management systems is imperative to achieve optimal results for modern businesses, including commercial banking. Statement of The Problem: As a participant in the financial services sector providing analogous products to banks of comparable or greater size, the competition is notably intense.
This competitive milieu has necessitated that bank management adopt the fundamental theory that customer relationships are a crucial asset within an organization, requiring effective development and management to enhance sales. Nonetheless, a salient inquiry that managers frequently pose is how to efficiently manage customer relationships to perpetuate the continual develop of the bank's products and services. Customer Relationship Management (CRM) is one of the widely adopted systems for managing customers. In recent years, TPBank has achieved significant successes but to meet customers' expectations, it is imperative to implement effective methods in CRM.
Therefore, building and nurturing strong relationships with customers are a top priority for banks in general, and TPBank in particular. 11 The purpose of the foregoing is to present a summary of TPBank Thao Dien's customer relationship management capabilities, which constitutes the primary case study of this research. This serves as the initial step towards identifying the bank's viability, a crucial aspect that this study aims to analyse and address. Specifically, the study seeks to examine the efficacy of implementing a CRM capabilities, which aims to enhance customer retention, and sales, as part of TPBank's e-banking solutions.
Furthermore, the study endeavours to proffer more viable solutions and propose a viable CRM implementation strategy for TPBank in the future. The implications of these findings are expected to shed light on the potential of customer relationship management in the broader context of Vietnam's banking industry, with TPBank serving as a particular case in point.3 Introduction to Tien Phong Commercial Joint Stock Bank: Tien Phong Commercial Joint Stock Bank was established on May 5, 2008 through leveraging the support of domestic and foreign shareholders such as DOJI Jewellery Group, IFC International Finance Company (a member of the World Bank), FPT Technology Group, SBI Ven Holding Pte. Ltd (Singapore), among others. Currently, TPBank is expanding its transaction locations across the North, Central, and South regions of Vietnam.
The expansion includes over 65 branches and transaction offices distributed among 16 provinces and cities throughout the country. TPBank's revenue has always grown by double digits year by year, specifically TPBank's revenue in 2022 has reached VND 15,567,189 million. As a bank that is constantly at the forefront of digital innovation and continually expanding its product and service ecosystem with solutions that prioritize customer needs, TPBank has recently made 12 strides in accurately positioning and rapidly adapting to trends by launching personalized features that enhance the user experience (Anh, 2022). TPBank currently serves over 7 million individual customers across the nation, among which 70% are young customers belonging to the Gen Z and Gen Y generations.
This figure implies potential opportunities for strengthening the relationship between the bank and its customers, provided that such opportunities are appropriately leveraged. TPBank has declared its unwavering commitment to being the preferred service partner for its customers by leveraging advanced technologies that enable the provision of cutting-edge electronic services and solutions. In the domain of management, TPBank has instituted various contemporary systems, among which is a Customer Relationship Management (CRM) system that substantially enhances its ability to cultivate customer relations, particularly through digitizing paperwork and swiftly processing customer records using Artificial Intelligence (AI) technology. TPBank has accomplished notable growth and garnered a high level of customer trustworthiness over the previous years, largely due to the implementation of its advanced CRM system.