Customer relationship management practices: A study on retail banking In Bangladesh

Abstract

Customer Relationship Management is critical to conducting business in today’s competitive marketplace, and banks are no exception. Commercial banks in Bangladesh have embarked different management strategies to promote customer satisfaction and loyalty, which in turn, possibly influence behavioural pattern of retail banking customers’ and one of them is customer relationship management. Customer relationship management has been widely regarded as a set of methodologies and organizational processes to attract and retain customers through their increased satisfaction and loyalty (Campbell, 2003; Hansotia, 2002; Khodakarami and Chan, 2014). Practices of customer relationship management in private commercial banks need to determine because retaining loyal customers are more profitable than attracting new customers’ (Eid, 2007). Furthermore, services and offerings in banking sector are more or less alike among the rivals which cause higher rate of lost customers’. Researchers found that marketers should take precautions before implementation of customer relationship management programs because of its high failure rate (Bolton, 1998; Boulding et al. 2005; Osarenkhoe and Bennani, (2007). However, although the positive impact of CRM on organizations has been addressed in many studies (Avlonitis and Panagopoulos, 2005; Hart et al., 2004; Kaura et al. 2013; Vijaykumar, 2013; Vijaykumar and Velu, 2011; Xu et al., 2002), there are a few studies pointed to the effectiveness of CRM practices in Retail banking sector. For that reason this thesis aims to measure the effectiveness of customer relationship management in the private commercial (domestic) banks in Bangladesh and specially focused on retail banking sector.