INTRODUCTION

The biggest management challenge in the new millennium of liberalisation and glo
balization for a business is to serve and maintain good relations with the king-
the customer. In the past, producers took their customers for granted because at
that time customers were not demanding nor had many alternative sources of supp
ly or suppliers. Since he was a passive customer, the producer dictated terms an
d had little customer commitment. But today there is a radical transformation. T
he changing business environment is characterised by economic liberalisation, in
creasing competition, high consumer choice, enlightened and demanding customer,
more emphasis on quality and value of purchase.
All these changes have made today's producer shift from traditional marketing to
modern marketing. Modern marketing calls for more than developing a product, pr
icing it, promoting it and making it accessible to target customers. It demands
building trust, a binding force and value added relationship with the customers
to win their hearts. The new age marketing aims at winning customers for ever, w
here companies greet the customers, create products to suit their needs, work ha
rd to develop life time customers through the principles of customer delight, ap
proval and enthusiasm.
WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT ( CRM )
The process of developing a cooperative and collaborative relationship between t
he buyers and sellers is called customer relationship management shortly called
CRM.
CRM aims at focusing all the organizational activities towards creating and main
taining a customer. CRM is a new technique in marketing where the marketer tries
to develop long term collaborative relationship with customers to develop them
as life time customers. CRM aims to make the customer climb up the ladder of loy
alty.
CUSTOMER FOCUS IN BANKING SERVICES
As the intense competition becomes a way of doing business, it is the customer w
ho calls the shot in deciding the nature of products and services offered in the
market. The customers are becoming demanding, dominant and selective. In fact t
he perceptions and the expectations of the customers have undergone a sea change
, with the availability of banking services to the customers at their door steps
through the help of technology.
Marketing of customer services aims at two important goals: prosperity to the ba
nk and satisfied customers. Banks offer tangible services like loan schemes, int
erest rates and kinds of account and the intangible services like behavior and e
fficiency of staff, speed of transactions and the ambience. The banks may need t
o include customer oriented approach or customer focus in their five areas of bu
sinesses such as Cash accessibility, asset security, money transfer, deferred pa
yment and financial advices.
There are four strategies available to customer relations' managers:
o To win back or save customers
o To attract new and potential customers
o To create loyalty among existing customers and
o To up sell or offer cross services.
The future of banking business very much depends upon the ability of the banks t
o develop close relationship with the customers. In order to develop close relat
ionship with the customers the banking industry has to focus on the technology o
riented innovations that offer convenience to the customers. Today customers are
offered ATM services, access to internet banking and phone banking facilities a
nd credit cards. These have elevated banking beyond the barriers of time and spa
ce.
MARKETING OF BANKING SERVICES
Marketing of banking services means organizing right activities and programmes i
n rendering right services to the right people at the right place, at the right
time at the right price and with right communication and promotion. Marketing of
banking services embrace the following unique features
o Intangibility-they cannot be seen or possessed physically but can only b
e experienced.
o Inseparability-their production and consumption occur simultaneously.
o Variability-they are highly variable depending on the merit of customers
.
o Perishability -they cannot be stored.
GLOLBALISED SCENARIO
"Change" is a continuous process and banking industry is no exception to this na
tural law. Change in the Indian banking industry is inevitable due to the implem
entation of the financial sector reforms and policies in the country. The main o
bjective of financial sector reforms is to promote an efficient, competitive and
diversified financial system in the country. Indian banking industry has underg
one tremendous transformation after liberalization and globalisation process ini
tiated from 1991. These changes have forced the Indian banking industry to adjus
t the product mix to effect the rapid changes in their process to remain competi
tive in the globalised environment.
COMPETITION FROM FOREIGN BANKS AND NEW PRIVATE SECTOR BANKS
The entry of more and more foreign banks and new private sector banks, with lean
and nimble footed structure, better technology, market orientation and cost eff
ective measures, have intensified the competition in the Indian banking industry
. Financial Institutions have also started entering into the domain of banks. In
recent years, the share of business of public sector banks has declined conside
rably. So there is a compelling need for the Indian banking industry to modify i
ts marketing strategy to attract the customers and to withstand the stiff compet
ition from foreign banks and new private sector banks.
TECHNOLOGICAL ADVANCEMENT
The advent of technology both in terms of computers and communications has drast
ically altered the methodology of banking business. In the banking sector, the t
echnology has opened new vistas and in turn has brought new possibilities for do
ing the same work differently and in a most cost-effective manner. Technology he
lps to have 24 hours a day banking, all seven days in a week. Tele banking, Inte
rnet banking and E-banking have opened new business potentials and opportunities
which hither to remained unexplored. All these technological advancement may pa
ve the way for home banking rather than branch banking.
INNOVATION
Another important force of change in the Indian banking sector is innovation. Ba
nks are innovative, pro-active now-a-days and offer top class service to custome
rs. They play a dynamic role not only as a provider of finance but also as a dep
artmental store of finance. As a result of this, new products like merchant bank
ing, mutual funds, leasing, factoring, forfeiting, corporate advisory services a
nd venture capital are emerging. These innovative services may augment revenue w
ith cost effective measures.
DEVELOPMENT OF THE SKILLS OF BANK PERSONNEL
To meet the new challenges, banks have to devise novel ways of meeting the custo
mer's demands. To help the banking staff to get sufficient exposure to technolog
y, suitable packages relating to hardware and software applications in relation
to their works are to be provided. Further, a separate marketing wing may be cre
ated in every bank to market their banking services. They must be trained suitab
ly to keep pace with the changing environment. In order to meet the challenges,
the Human Resource Department in banks have to prepare appropriate manpower plan
s and strategies.
CONCLUSION
The recent trend of globalisation and liberalization has posed serious problems
to domestic banks. The entry of new foreign banks and private sector banks with
their advanced knowledge base of automation in the banking operations and aggres
sive marketing strategies has pushed public sector banks to a tight corner. Pote
ntial customers have started moving towards foreign banks and private sector ban
ks. To survive and succeed, banks must identify their marketing areas, develop a
dequate resources, convert these resources into healthy and efficient services a
nd distribute them effectively satisfying the manifold tastes of customers.
Dr. V. GOMATHI VISWANATHAN