Strategic plan for applying customer relationship management in Vietnam joint stock commercial bank for private enterprises

Strategic plan for applying customer relationship management in Vietnam joint stock commercial bank for private enterprises Lê Thị Thanh Tâm Khoa Quản trị Kinh doanh Luận văn Thạc sĩ ngành: Quản trị kinh doanh; Mã số: 60.34.05 Người hướng dẫn: Nguyễn Ngọc Anh, Megh Shetty Năm bảo vệ: 2007

Strategic plan for applying customer relationship management in Vietnam joint stock commercial bank for private enterprises Lê Thị Thanh Tâm Khoa Quản trị Kinh doanh Luận văn Thạc sĩ ngành: Quản trị kinh doanh; Mã số: 60.34.05 Người hướng dẫn: Nguyễn Ngọc Anh, Megh Shetty Năm bảo vệ: 2007 Abstract: Nghiên cứu định nghĩa lợi ích nguyên tắc triển khai hiệu quản trị quan hệ khách hàng Mơ tả phân tích thực trạng VPBank ba năm gần so sánh đánh giá VPBank ngân hàng đối thủ Đưa kế hoạch mang tính chiến lược gồm ba giai đoạn để xây dựng triển khai CRM VPBank Keywords: Quan hệ khách hàng; Quản lý tiếp thị; Quản trị kinh doanh; VPBank Content INTRODUCTION Necessity of the thesis Joint Stock banks (JSBs) systems in Vietnam are significantly competing with State-owned banks (SOBs) system Because of being result of opening the economy as well as characteristics of economy system, JSBs are controlled by Central Bank much more tight than SOBs Besides that, set up after SOBs they are really weak in infrastructure, competitive capacities and supported policies 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 Vietnam joint stock commercial bank for private enterprises (VPBank) is one of JSBs operating in Vietnam banking market It is entirely difficult for VPBank to compete with SOBs However, VPBank is opposing increasing competition of Joint Stock competitors in order to exist and development 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; ii) finding a relevant competitive strategy for VPBank in next five-year period and the relationship between VPBank new competitive strategy and CRM; and iii) how to apply CRM at VPBank Questions To achieve these objectives above, the dissertation will answer three key questions follow: 1) What factors have significantly affected operations of VPBank? 2) What will be competitive strategy for VPBank in 2006 – 2010 and the relationship between the new strategy and CRM? 3) How to apply CRM solution? Methodology To find a relevant strategy for VPBank, the thesis will analyze competitive advantages based on analyzing SWOT and value chain Data is definitely collected from secondary data source They are government’s reports, Central Bank’s annual reports, legal documents related to banking system, VPBank’s Annual reports, VPBank’s surveys and banking articles Besides that, the research uses data collected from other Joint Stock Banks and State-owned Banks The research also uses comparison and contrast methods in order to answer the research questions Structure of the thesis To regard to the research topic, the research is clearly divided into three chapters including: Chapter 1: Literature Review Chapter 2: Background on Vietnam banking market and VPBank situation analysis Chapter 3: Recommendation on competitive Strategy of VPBank in 2006-2010, and how to apply CRM solution as a competitive tool CHAPTER 1: THEORICAL FRAMEWORK 1.1 The definition of customer relationship management (CRM): 1.1.1 Definition of customer relationship management: There is no universal explanation of what CRM is, since the area is fairly new and still is developing It is therefore important to remember that several attempts of defining CRM exist and that many companies adapt the definition to their own business and their unique needs The following quotations are three examples of how CRM is defined: “CRM is a new customer-centric business model that reorients firm operations around customer needs (as opposed to products, resources, or processes) in order to improve customer satisfaction, loyalty and retention” “CRM is the integration of customer focus in marketing, sale, production, logistics and accounting, i.e in all parts of the company’s operations and structure” “The activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customer by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost CRM integrates sales, marketing, service, and enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contract CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees” 1.1.2 Comparison between relationship and transactional marketing: The transactional marketing focuses on the capability of taking over new customers, attracting the potential customers from competitors while relationship marketing focuses on the 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 remaining customers represent potential relationship buyers They can be divided into three district segments: - Those who are significantly the most profitable; - Those who are delivering good profit and suggest the capability of becoming top profit customers; - Those who are only marginally profitable  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 Even although it may be difficult to make these customers more profitable, CRM should help assure that none of them are lost to the competition  The middle group of buyers: The balance of the customers in top 40% or 50% as ranked by sales and profit It will be just as important to target this middle group of buyers who are delivering good profit but may be capable of moving up to the top of profit level Customers in this group are probably giving some of their business to your competitors CRM activities for these customers should be aimed directly at increasing your company’s share of their business CRM marketing strategy developed for this middle group of buyer more than paid for the company’s significant investment in database software within a year  The final, less profitable, group of customers: The third group of customers represents those who, while profitable, are only marginally so While it is possible that some in this group would move up the sales ladder as a result of increased communications, it will probably not be worth the effort 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: CRM consist of three elements: People, Process and Technology, that help companies to understand their customers To gain the success in CRM project, the company must coordinate all aspects Technology must be given a 20% weight, while people and business process should be 50% and 30% respectively 1.4 The characteristics and the challenges of CRM: 1.4.1 The characteristics of CRM:  Customer database centrally: Give to the company a overall view of relationship of each customer  Profitability of customer analysis: CRM helps to create the balance sheet of individual customer, and helps the company to invest more effectively on each customer, the profitability is the most important thing to evaluate and classify customers Normally, each company has three classes of customers: - The first class: Take about 10% of total customers, this class makes the highest profit and has long-term transactions with the company - The middle class: Take about 40%-50% of total customers, this class makes profit and is very potential - The last class: Also take about 40%-50% of total customers, the profit of this class is not high and mainly is the current customers who have few transactions or only come to the company in some special occasions like sale-off, discount  Customer segmentation: CRM classifies customers into different segmentations and measures the effectiveness of each segmentation  Marketing campaigns base on customer database: Use the database and information of each segmentation to plan and implement marketing campaigns  Analysis of customer’s needs: Help to give personalized product or service to each customer and find more new and potential needs from customers to compete with competitors 1.4.2 The challenges of CRM:  Have to change the policies and process in the whole  Need full support from the board of management and all staffs, for example: the way they import the customer information to CRM system and dig this database  Need large initial cost to invest on software, machine, equipment and human resource 1.5 Ideas support CRM: 1.5.1 The statistics of Harvard-Business review in December, 1995: - Only 4% of dissatisfying customers complain, the other say nothing but they will come to your competitors In the banking industry, 65% of customer will chose other suppliers if they are not satisfied - The average person with a problem eventually tells nine other people - Satisfied customers tell other people about their good treatment - The cost of acquiring a new customer is to times greater than retaining current ones - The cost of recruitment a new employee is 10 times greater than retaining current ones 1.5.2 Pareto's Principle - The 80-20 Rule: The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are trivial 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 CHAPTER 2: BACKGROUND ON VIETNAM BANKING MARKET AND VPBANK SITUATION ANALYSIS 2.1 Overview of Vietnam Banking Market State Commercial Bank: There are banks of this type now running their business These banks own a large system of branches that can join Inter-bank independently or dependently owing to its policy and management capacity or they can choose not to join Inter-bank market Joint-Stock Commercial Bank system consists of 37 members It is now seeing a decline in number but an increase in scale for each member Joint-Venture Bank, foreign bank branches: Joint-Venture Banks and 27 foreign bank branches are in operation in Vietnam Their customers are mainly foreign financial groups or joint-venture companies Several banks of this kind such as City-bank or Standard & Chartered Banks have been offering services in Inter-bank, though still humble Financial companies: financial companies that seem unable to afford big business due to shortage of long-term capital want to switch to Inter-bank market Most of these companies lack of banking tools These banks offer services mainly in sending and lending money, bond transactions, and moneyed papers 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; especially installment consuming loans and VPBank difference is created by effective customer relationship management 2.2.2 SWOT Analysis  Strength: - Firstly, Vpbank has the quick growth rate in mobilizing funds, especially in savings You can see the total mobilized funds in the period 2001-2004, as below: Total customer’s deposits in the period 2001-2004 Unit : Mil VND Criteria 2002 2003 % 2004 % Customer’s deposits 974,632 1,273,993 30.72% 1,869,589 46.75% * Savings account 797,116 1,032,513 29.53% 1,541,341 49.28% * Current account 134,697 210,371 56.18% 283,198 34.62% 42,819 31,109 -27.35% 45,050 44.81% * Others So, the growth rate in mobilizing fund is quick, it is because VPBank always offers the attractive mobilized interest rate, as compared with other Vietnam commercial banks and VPbank often provides many promotion programs or advertisements The customer’s deposits come from 30.7% to 46.7% during the two years 2003-2004, including that savings take the most percentage Mobilizing fund growth rates in 2003-2004 0.76 0.47 0.40 0.33 0.24 VPbank ACB Exim Techcombank Saigon Cong Thuong Source: VPBank, ACB, Eximbank, Techcombank, Saigon Cong Thuong bank’s anual reports 2003-2004 - Secondly, VPBank has a young and skillful human resource The graduated and upper graduated employees take 74% of total employees, and two-third is the new comers Of course, it says nothing, the most important thing is the capability of adapting with the new environment, processing the task but the youth will bring the fresh environment and be more active and creative - Thirdly, the NPLs rate over the total loan balance in VPBank is low at the current time After VPbank was in Hanoi state bank’s special control with the NPLs rate 37% (2001), this current rate is only 0.5% (2004) The number can say that VPbank are operating very safely - Forthly, VPBank has the strong relationship in the inter-bank market It helps VPBank increase the profit that comes from the inter-bank market investments, securities trading…At the current time, these activities are mainly feeding all VPBank system  Weakness: - Firstly, sparse experienced managers and staffs, insufficient pool of good staff for expansion - Secondly, management and control still a distance from good banking practices - Thirdly, lower reputation compared to leading competitors - Fourthly, small and high risks customer base - Fifthly, varying service quality, small range of products and services - Sixthly, VPBank weak point is the information technology system, the software that VPBank is applying is not very useful anymore because the demand of customers is developing; they want to buy modern bank services While other competitors have finished the modernizing-bank project, VPBank still use B2K 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  Opportunity: - Firstly, it is the high entry for the new comer In fact, to open a new one, the legal regulations are required so complexly Moreover, the state bank’s guideline is to build the really strong commercial banks to compete with the foreign ones, they encourage opening more new small banks With VPBank, the domestic competitors not arise but it is easy to appear the merge and acquisition trend in the future The competitors are the current domestic banks, foreign banks, and the financial companies that provide the same services such as insurance company, post office savings, and securities exchange… - Secondly, Vietnam government are maintaining the market economy, so in the future the growth rate of Vietnam economy goes up stably and firmly This environment encourages the private economy sector to develop; this is also the target market of other retail banks and VPBank 10 - Thirdly, the habit of Vietnamese people is changing day by day, the new generation has newer thinking, newer habit The intellectual has the high and stable income; they want to be independent with their parents when they are still young It will increase the demand of instalment loans for purchasing car, house… Besides, Vietnamese people are turning into using non-cash payment, they will use plastic and chip payment cards like ATM, Credits card…This is the big opportunities for banks including VPbank - 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 This opportunity still offer to other bank like VPBank, they still keep investors’ belief because Vietnam commercial banks’ strategies are to develop stably and firmly and to reduce the risk as much as possible  Threat: - Firstly, SOCB reform resulting in SOCB’s targeting SME segment - Secondly, leading competitors have accelerated - Thirdly, foreign banks preparing for market penetration - Fouthly, non-bank financial services: insurance, leasing, postal savings are potential threats - Fifthly, Vietnam’s economy is still high-risk - Sixthly, many sectors are facing difficulties with economic integration 2.2.3 Value chain analysis After taking value chain analysis and comparing with some selected competitors 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 11 CHAPTER 3: RECOMMENDATIONS TO BUILD A STRATEGIC PLAN FOR APPLYING CRM IN VPBANK With the competitive strategy above in 2006-2010 period, the application plan of CRM program is divided into phases: + The first phase (2006-2007): Build foundation for CRM, especially VPBank customer database + The second phase (2007-2009): Deploy CRM + The third phase (2010): Review, evaluate and develop CRM 3.2.1 The first phase: Build foundation for CRM CRM is a long-term program with the success ratio that is only 50% 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 So, what does VPBank have to for this phase? 3.2.1.1 VPBank has to prepare “people” VPBank must build a core team for CRM application They are the key persons for the whole project; they come from all departments for example: the board of management, deposit, credit, and accounting…  Some basic requirements to recruit human resource for CRM core team: + Have long experience in VPBank + Come from all departments + No need long experience in IT + Need one person who will be expert at the changes and procedure management 12  The tasks of CRM core team: + Evaluate and analyze the current situation of customer relationship management at VPBank + Propose the strategy and objectives for CRM program + Notice and transmit not only the ideas but also the method of implementing CRM as well to all the employees Consistently, all the staffs have to understand the customercentric culture + Choose the suitable information technology system like software and hardware for the selected strategies of CRM + Control the process of implementing CRM 3.2.1.2 VPBank must build the plan for selecting CRM vendor VPBank must build the plan for selecting the suitable supplier of CRM information technology IT is not the key element to decide the success or fail of CRM project but we can not be lack of one information technology Study CRM strategies and demands of VPBank carefully before purchasing 3.2.1.3 VPBank must improve customer database In the first step to implement CRM at VPbank, we must build a qualified customer database; it is the foundation of CRM With VPBank current rag and desultory customer database, we need to complete and improve it The current number of VPBank customer is so small, so we have to find and attract more new customer in this phase CRM bases on the qualified customer database, it means that we must have a certain number of customers with their clear profile There are some activities that help VPBank to attract more new customers, especially in the credit business- the strategic business of VPBank: 13 o Create the close relationship with the middleman in housing and land trading and the construction companies o Associate with the head hunting companies to have the list of high-income employees because they are the potential customers (young, risk-taker, high and stable income) for VPBank services After that VPbank approaches these subjects by providing the prefer cards, customer care They are the target customer of consuming loans o Organize the meeting in some enterprises to market for VPBank product and service This is the chance for both VPBank and the employees in those enterprises; VPbank can offer some prefer policies for them And this must be the win-win relationship because of CRM long-term strategies 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 So, VPBank should approach these subjects but with the limited resources, VPBank only concentrates on the best-graduated students VPBank will apply the special customer care policies for this group, for example: VPBank will provide the card named “Vietnamese talent” for them, with this card they can receive birthday’s gift, discount fee or other prefer policies… 3.2.1.4 Evaluating activities 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 number of new customers (this is the most important thing)  The customer database (completeness, clearness, and qualification…)  Turnover from VPBank credit business 14  The customer retention and the percentage of customers who go away (closed accounts, non-performing accounts…) 3.2.2 The second phase: Deploy CRM After one year preparing for CRM application, now the main objective is not to find new customers, the main objectives in this phase as below (within three year):  Finish procurement, and deploy the software of customer relationship management at VPBank  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; it is affected by people and information technology)  Classify VPBank customers and creat action plan for building customer relationship at VPBank 3.2.2.1 CRM software application 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 After that VPBank customers will not see VPBank as a normal company but as a close friend This relationship is based on the WIN-WIN foundation 15 Customer - VPbank Be offered prefer policies and - The profit margin in the individual special care customer may be reduced but the - Save costs total profit will increase - Be met maximum the demand - Save costs - Create well-known brand and differentiation from competitors - Develop stably and firmly After defining the mission and strategy and application solution of CRM at VPBank, the core team has to raise the customer relationship management requirements for the tender About customer information collection, the CIF module from all core bank solutions can meet, however this module can not provide analysis and evaluation tools and create the model of analyzing and forecasting the demand, the risk of customers in order to support VPBank to build and maintain the relationship 3.2.2.2 VPBank employee training: In the CRM implement process, the people are the key factor to succeed CRM concentrates on creating and maintaining the relationship between VPBank and customers, so the staffs will the face of VPBank They are representatives for VPBank to communicate, to serve and to keep the relationship with customers The objectives and the benefits of CRM are understood and committed much clearly by VPBank staffs 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 They not commit and perform inconsistently from the board of management to the employees 16 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: Profitable Capability reflects potentiality to create turnover Satisfaction Level reflects satisfaction and feelings of customers with services Profitability Satisfaction - The red box shows customer group that provides the highest profitability and satisfy perfectly with VPBank services Certainly, this rate of this customer group is not high compared with the total number But only small ratio can makes the considerable 17 profit for the bank If they go to another bank, VPBank will lose so much One customer of this group can create the profit that is ten or hundred times bigger than normal - The yellow box shows the customer group that brings the highest profit but has average satisfaction or the one that bring the average profit but satisfy perfectly with VPBank services They are the subjective that CRM should impact and VPBank should use some CRM policies to bring them to the first group - The blue box shows the customer group that provides the highest profitability but dissatisfies with VPBank services or the one that has the low profitability but satisfy perfectly They are the customers that VPBank must pay attention and consider carefully because it is very easy for them to say “good bye” with VPBank and only low profitable customers stay - The grey box show the customer group that has the average profitability, dissatisfy with VPBank and has the low profitability, average satisfaction VPBank cannot put additional marketing cost for this group - The black box shows the low profitability and low satisfaction VPbank can forget this group Based on each type of group, the bank must plan: + Budget + Human resource + Customer care policies 3.2.2.5 Some customer relationship solutions and customer services for VPBank In this phase, VPBank has supports from CRM software solution; all the customers will be divided into different groups like above In order to influence the customer behavior, 18 especially the old customers in VPBank, the customer service department must know what their customers are thinking and caring When VPBank has already CRM solution, it means that VPBank will not launch so many other marketing campaigns anymore The most impotant thing is the long-term relationship Some loyalty solutions: - Customer consuming behavior - Motivation in both physical and spirit - Social activities Some motivated ways as below: - Mail, e-mail, SMS message, fax Congratulation letter, thank letter - Website: Exchange information, collect the ideas and comments from customers - Prefer card, monthly banking magazine, and postcard, catalogue on some special occasions - Directly meeting: Focus group, private meeting - Call center: Maximize the capability of meeting customers’ demand, customizing and consulting - Gift and Discount: The more customers make profit for VPBank, the more benefit they get Some incentives to spending activities of customers : o In sense of spirit: - Keep in mind the name of customers - Associate, organize and issue member card for customers in activities such as bodybuilding, tennis, swimming, dancing, etc 19 - Note down important anniversaries of each customer such as birthday, wedding day, special days, for example give birth to a child, etc The bank should send flowers and/or gifts and/or greetings cards for congratulations - Send thankful cards to customers on specials days in various ways - Send news, magazines periodic updated information of the bank and customeroriented descriptions of services and instructions of procedure (the easiest the best) to customers - Establish central switchboard 24/24 availably give answers to all questions and comments as well as consult usage of appropriate banking services 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 o In sense of material: There are many ways to encourage the spending activities of customers Most of companies that implement CRM issue cards for royal customers CRM software solutions could make score for customers based on the turnover derived from them 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 - Preferred prices when using non-banking services such as restaurants, hotels, tourism, cosmetic, household utensils, etc - Credit guarantee in certain cases 20 3.2.2.6 Evaluation 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 estimated time to perform and evaluate the result of CRM in this phase is three years, however it is required to annually review and evaluate the performance Hereunder are some important criteria (KPI) in this phase: - The profit growth of the bank - Average profitable capability of each customer - The number of customers of “diamond” and “gold” group in certain time - Average returns on investment cost (cost for relationship with customers) ratio and ROI for each kind of customers - Make comparison of average returns on investment cost ratio between pre and post CRM - Do periodic researches to evaluate comments and feelings of customers - Number and ratio of customers that 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: - Arrange account manager: arrange certain account manager serving the whole services to each royal and important customer 21 - Individualization in communications with customers Each customer wants to be respectfully treated; hence, individualization is very important 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 - Customer researches should be individualized too This will make a greater efficiency because customers will be respectfully treated and in turn, giving out precise and careful answers - Marketing activities are directed to certain customers (marketing one to one) Each customer is differently characterized; hence they need to be differently treated in order to get the best result from them For example, on the chance of 8/3 or 20/10, the bank should send flowers to female ones with various kinds, etc 3.2.4 Conclusion The competition on the market is increasing domestically as well as globally Nowadays, if one bank operates without any competitive advantage, it is not sure that the bank can no longer exist In order for VPBank to survive and grow they must find the new way of thinking to operate Banking industry is the special one; 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 As it happens, CRM offers the most holistic route for banks to enhance customer relationships 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 It enables banks to 22 understand their customer's expectations and preferences better and offer the potential to deliver higher levels of personalized service and more effectively implement cross-selling and up-selling strategies By doing so, banks can enhance customer retention, profitability and loyalty and get an increased “share of wallet” from their customers 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 goal with CRM is to maximize the company profits by maximizing the value of interaction with the customers And this chapter 3, there are recommendations a plan to VPBank how to build an effective CRM program References Arthur Middleton Hughes The Customer Loyalty Solution: What Works (and What Doesn't) in Customer Loyalty Programs McGraw-Hill Brock Richard and et al 2000 Profitable Customer Relationships: The Keys to Maximizing Acquisition, Retention, and Loyalty Apastore Inc Frederick Newell Why CRM Doesn't Work: How to Win by Letting Customers Manage the Relationship Bloomberg Michael T Bosworth and John R Holland Customer Centric Selling McGraw-Hill Neil Woodcock, Merlin Stone and Bryan Foss The Customer Management Scorecard: Managing CRM for Profit Kogan Page Limited Philip Blight and Douglas Turk CRM unplugged releasing CRM’s strategic value John Wiley and Sons, Inc Sarah Dougan Customer relationship strategies in financial services Business Insights Lmt Tom Sant Persuasive Business Proposals: Writing to Win More Customers, Clients, and Contracts Amacom www.guru.com 10 www.asiabanker.com 11 www.vpb.com.vn 23 24 ... now seeing a decline in number but an increase in scale for each member Joint- Venture Bank, foreign bank branches: Joint- Venture Banks and 27 foreign bank branches are in operation in Vietnam. .. However, VPBank is opposing increasing competition of Joint Stock competitors in order to exist and development Moreover, I have been working in VPBank, one of the first Joint Stock banks in Vietnam, ... branches that can join Inter -bank independently or dependently owing to its policy and management capacity or they can choose not to join Inter -bank market Joint- Stock Commercial Bank system consists