The Importance of Crm for a Bank Finance Essay

3.1. Introduction

According to Beins (2008), research methodology is a focused way to systematically investigate the raw information available and process it into a specific piece of information that is available to be analysed and clarifying comments on the topic of enquiry. (Kothari, 2008) states it as a set of procedures or rules and methods adopted by an individual to get valid and authenticated results on the research. Some argue that it is an analysis of principles whereas some say that it is just a collection of data and procedures. The following chapter has covered the various aspects of the research methodology such as the design, techniques, questions, approaches that have made research a success and credible. It will also throw light on why a certain method is used in the research and why others have been dropped, its advantages and disadvantages in regarding to efficiency of CRM services in HDFC bank. The chapter has been divided into two parts first where the theory regarding the subject topic is discussed and second where the administration of techniques and the methods required for data collection are described.

3.2. Objectives

The objectives of this research are very clear in order to achieve the desired results. This study deals with the importance of CRM for a bank in Indian economy like HDFC bank. It has determined determine the impact of CRM on the organizational effectiveness of the bank and its business operations and if improvements in customer services are needed. There is an assessment of awareness of CRM to the bank employees and its benefits for HDFC bank. Interviews were conducted and questionnaires were distributed amongst the customers to determine the extent of customer satisfaction. The data has been critically analysed using a variety of sources and research tools and recommendations are provided for the bank.

3.3. Research Philosophy

Philosophy is regarded as a person's perception or belief towards a particular thing. KumarA (2007) terms philosophy as the researcher's perception towards a properly structured methodology. These beliefs form the fundamental approaches towards reality and can be categorized into three parts according to Beins (2008). They are Positivism, Realism and Interpretation which are further elaborated as Positivism is generally a quantitative approach where the emphasis is on a structured methodology to facilitate replication enforced by theoretical laws which are similar to the ones produced by natural and physical scientists. Realism on the other hand advocates that people should not be studied as an object that is done by the physical and natural scientists (Bryman and Bell, 2007). Interpretation on the other hand can be considered as a qualitative approach to understand the differences between different types of individuals in social behaviours (Saunders et al. 2009).

3.4. Research Approaches

In research methodology there are two methods of research that are generally referred to; they are deductive approach and inductive approach (Beins, 2008). Deductive approach can be related to a "waterfall" approach as the reasoning in this approach works from a broader towards a specific approach. Conclusion in this type of an approach generally comes from the specific available facts (Saunders et al. 2009).It is also known as the top down approach. This method helped in the literature review and also in determining some finding s for the research. Inductive approach on the other hand is closely related to a "hill climbing approach" where the reasoning is the other way round moving from more specific towards a more broader approach, it allows themes to appear from the data and which leads to theory depending on the scenarios (Ghauri, 2010). It is also regarded as the bottom up approach and has a degree of uncertainty. This approach was also used in the literature review and in addressing to the problems as the research evolved as the researcher used foreground information that was already available (Kothari, 2008). Arguments based on laws, rules and principles fall within the area of deductive approach and observations are included in the inductive approach (Ghauri, 2010). Inductive approach was used in forming the questionnaires where specific observation of the customers of HDFC bank was required and deductive came into play while questioning the managers of HDFC bank about the policies, rules and principles of the bank which played an important role in determining the customer satisfaction and their effect on them (Saunders et al. 2009.

3.5. Primary and Secondary Data Collection

Secondary data collection involves the data that is generally collected for some other research and it is used by the researcher for its own research. The various types of secondary data collection are documentary type reports, multiple sources and surveys (Saunders et al. 2009). Documentary type reports according to Kumar (2005) consist of written and non-written reports. The research consisted of data from websites, media accounts, television, committee reports, CD ROMs, organizational reports from HDFC bank and internet sources. Multiple sources consisted of data from the overall banking industry in Indian economy, also reports from the banking sector were included in the literature review and there was statistical data from HDFC bank as well. Survey data usually consists of government census and data relating to the aspects of daily life of an individual such as expenditure, budgeting and employability prospectus. Survey data was used to collect quantitative information about the customers of HDFC bank and researcher adopted this approach as it is focused towards the target audience. Primary data collection is the data that is specifically collected for the research purposes and cannot be collected from other sources (Saunders et al. 2009).It includes the data that is collected by the researcher through interviews and questionnaires. Kothari (2008) divides primary data can be divided into two categories such as Qualitative data and Quantitative data.

3.6. Quantitative Data Collection Methods

Quantitative data according to Bryman and Bell (2007) is defined as a collection of numerical and statistical data which form a firm base for the research and the theories. Beins (2008) comments that quantitative research is established to such a level in research methods, that some researchers don't accept any other data collection as valid and authentic. Saunders et al (2009) concept is that that the quantitative data is collected in the form of numbers and statistics. It can also be described as an objective method of data collection where the focus in the correct and accurate measurement of analysis and the target concepts using various techniques such as surveys and questionnaires (Ghauri, 2010). The aim of this type of data collection is to get the information, classify it count it and construct statistical models to explain it further. There is also limited probing as far as questions are concerned in a quantitative research with the sample size being large. The researcher collected data through questionnaires and they were made in such an order that helped the researcher to convert the responses into percentages and put them on scales (Quinton and Smallbone, 2006).

3.7. Qualitative Data Collection Methods

Qualitative data collection methods are those that usually lay emphasis on words rather than numerical and statistical data (Bryman and Bell, 2007).This type of method does not subject its finding to numerical and quantification of data but studies the attitudes, feelings the people (Saunders et al. 2009). Ghauri (2010) argues that qualitative data may be used to construct a theory but it actually studies a particular phenomenon. This type of data collection is subjective and involves interpretation of different event and studying of an individual using participant observation such as interviews and the design of the research unfolds as the research progresses (Kothari, 2008). The aim of this research is to get a detailed description and researcher acts as the data gathering instrument. A qualitative data collection method mainly includes three techniques that are widely used for gathering data and they are focus groups, projective techniques and interviews. According to Kumar (2005), focus groups are used to gather data from a group of people where they are free to talk about their perceptions and ideas about a particular subject. Projective techniques include gathering information from an individual using certain tests so that their "real emotions" could be revealed (Kothari, 2008).Both these methods were omitted from the research as they were beyond the nature of this research and lacked relevance. Interviews in the words of Beins (2008) involve in-depth analysis of a conversation between two people and this technique was used by the researcher to gather data because of its high relevance with the research.

3.8. Surveys

Surveys are a well-known method of data collection. As defined by Kothari (2008) questionnaires if used in surveys are more successful and surveys can be used for both quantitative and qualitative purposes. The researcher therefore used questionnaires to get the responses from the customers of the HDFC bank to determine the levels of customer satisfaction and their views about the services of the bank. The questions were designed to get responses both in numerical form and descriptive forms. The responses were used to devise graphs and scales in the analysis of results and proved to be very reliable and valid data (Beins (2008). Questionnaires were also used to get responses from the managers on the facts illustrated by the customers of the bank. Questionnaires were given to the customers at the bank itself when they came in for their services and were distributed throughout the employees of the bank by the managers as it was important to know the views of the employees regarding the customers of the bank to whom they delivered the service. It was easy to get the responses and then analyse them for research purposes (Bryman and Bell, 2007). The questions were designed strictly keeping the research purpose in mind and made sure not to deviate from the track of the research. The steps that were adopted in designing the questionnaires were the following as described by Yin (2003). First the objectives were clearly defined and after that the questions were categorized to get the appropriate response, and then a proper sample size was chosen in order to get valid results and finally the questions were written (Bryman and Bell, 2007). The questions were kept very simple in order to make the managers comfortable so that they could provide as much information as possible that would be relevant to the research, the aims of the research were kept in mind as well so that the employees could provide appropriate information regarding the customers within HDFC bank and vice versa and its effect on the performance or in customers case the customer satisfaction with the bank (Saunders et al. 2009).

3.9. Interviews

According to Ghauri's (2010) theory, interviews are conducted to get information about the attitudes, perceptions, and feelings about a certain issue. Beins 2008) believes that interviews are exchange of views between two persons concerning a particular topic of interest. Saunders et al. (2009) writes that the interviews can be largely helpful in dealing with issues of complexity and to find a reliable response. Interviews were conducted from three out of the eight managers of HDFC bank which were randomly selected during sampling. The questions were drafted in advance and the managers were asked about their time and availability of the interviews, as the researcher was in a different geographical location and it was difficult to conduct initial face to face interviews with the managers as it would incur huge costs for the researcher to visit India more than once and would be time consuming. Therefore methods such as video and teleconferencing were used to get the time for interviews and create an environment similar to the face to face interviews (Kothari, 2008). Detailed interviews were conducted later when the researcher visited India. The researcher conducted one pilot interview with branch manager first. After finalising the questions, another formal interview was taken. There were almost same responses in both occasions. Two of the middle line managers were asked for their time for interviews and luckily single interview was taken from both managers. The conversation with the managers started with the introduction of the researcher and then by thanking them for their time and availability. Questions were asked regarding the various CRM policies that the bank was implementing and the importance of those policies in retaining customers, also information was collected regarding the different services that the banks was providing to the customers and if they were beneficial to them keeping in mind the CRM policies of the core competitors (Kothari, 2008). Also they were asked whether the employees working within HDFC bank were aware of the CRM policies and their benefits and the effects of CRM on the banking policies and its operational policies. The efficiency of the CRM services provided by the bank was also questioned and its impact on the business. The questions asked were aligned with the theme of the research and the managers that were selected for the interviews had experience of working in the customer service sector within the bank and had been working long enough to know about the various CRM policies within the organization. The approach towards the managers in the interview was also kept informal so that they could be at ease and give out as much information as possible without any nervousness (Kumar, 2005). The questions mainly helped in determining the benefits limitations and the problems faced in implementing the CRM policies. The discussion proved to be quite open ended and helped a lot in gathering valuable information regarding the CRM practices within HDFC bank (Ghauri, 2010).

3.10. Sampling

As researched by Beins (2008), it is rarely seen that researchers survey the whole population as it is too expensive and time consuming, so a random subset of individuals is chosen. As sampling was an important part of the research it was carefully planned to target a random group of about eighty people in order to get reliable and valid results. Sampling was also done in the case of choosing the managers as three of them were randomly chosen out of the eight managers working in the Bank. The sampling proved to be successful as data was gathered in a short period of time and it was relevant to the research as well (Saunders et al. (2009).

3.11. Pilot study

It is important to test the questions designed in the questionnaires before they are actually used in the research in order to determine whether they are conducive towards the research and would pose no problems for the respondent and experts should be consulted to comment on the suitability of the questions and this is regarded as pilot study (Saunders et al. 2009), therefore three different managers from the Indian banking sector were consulted for their comments and the questionnaires were made more specific and clear.

3.12. Rationale/Justifications

From the researcher's perspective rationale of this research is to discuss why the selected research methods are appropriate and why they were applied. As the research approaches adapted are so wide-ranging under their own sub-categories which are not relevant with this research, a hybrid of methodologies was best thought to be used in this research where each plays an important role and is not deviating from the research (Saunders et al. 2009). The researcher based the research on fact finding and did not take fiction into consideration so that the research would be valid, authentic and based on reality and proven theories (Bryman and Bell, 2007). The researcher also opted for realism that takes the individuality of a person into account and is thought to work best where the social issues are concerned and hence is useful in getting as much information possible from the customers of HDFC bank and the managers. After finalizing the research approach, the next stage is to specify the primary and secondary data collections. According to Bryman and Bell (2007), it is important to formulate the design and plan the structure of the research work after examining previous work so the researcher adopted this policy and examined the various policies, procedures, daily functions, and socio cultural aspects of HDFC bank to get a view of banks functioning in Indian economy. Contextual features and issues related to the dissertation were among the crucial factors that were considered in making decisions about the most appropriate research design to employ in designing and undertaking this research. The researcher was significantly influenced by a number of such issues in determining an appropriate research design. It is very important to mention here that the researcher undertook pilot study before the actual commencement of the research. It was a feasibly a very small experiment to test logistics and collect data prior to the greater research in order to improve the quality and efficiency of the questions asked in the interviews and questionnaires. It was important to test the questions designed in the questionnaires before they are actually used in the research in order to determine whether they are conducive towards the research and would pose no problems for the respondent and experts should be consulted to comment on the suitability of the questions and this is regarded as pilot study. Although several research methods could have been employed as they were in related studies, but the researcher chose interviews and questionnaires because of certain limitations (provided in the next paragraph) and some other reasons: The researcher believes that questionnaires are more successful and can be used for both quantitative and qualitative purposes. It is the easiest and simplest method of collecting data in short time. Taking into consideration the environment of HDFC Bank along with keeping in mind the purpose of the research, the researcher applied this method to get the responses from the customers of the HDFC bank in order to determine the levels of customer satisfaction and their views about the services of the bank. For this purpose, the questions were designed to get responses both in numerical form and descriptive forms. The original thinking was that these responses could be used to devise graphs and scales in the analysis of results; in the end these proved to be very reliable and valid. Interviews were preferred over other research methods because the researcher wanted to get information about the managers' attitudes, perceptions, and feelings about CRM adaption and use in their bank. The researcher felt that reliable responses would be gathered concerning the use, benefits, limitations, effects and other issues regarding CRM within the bank environment. Later face to face interviews provided detailed insight into the impact of CRM. The branch manager and middle line managers were approached separately and interviews were conducted from them to take into consideration the same value and importance of CRM and its impact on customer services and company performance, but from different perspectives. This helped the researcher in critically analysing the qualitative data. The triangulation technique and choosing mixed method approach for this research was considered to engage the complex issues such as differences of backgrounds of managers, employees and customers and differences in their opinions. The mixed method approach was also selected because the researcher wanted to gather relevant and reliable information and that could be gathered to apply the best research method to appropriate sample. This approach also embrace important underlying issues for this research such as focusing on research outcomes by emphasising the criticality of the of the questions asked rather than the methods of data collection. Mixed method research was considered as it has the ability to incorporate both quantitative and qualitative data collection techniques.

3.13. Limitations

As every research has its own limitations this research is not different from the rest of the researches and has limitations too. The two methods used for data collection were through interviews and questionnaires and they have their own limitations. Kumar (2005) argues that respondents sometimes do not answer sensitive questions and sometimes their views can be biased about a particular subject. It was seen that the managers when interviews declined to comment on certain policies adopted by the HDFC bank. The views of the customers in certain responses seemed to have an element of bias towards the policies of the Bank and also some responded even answered the question which they had little knowledge about (Kothari, 2008). Access to company records was also a limitation as the researcher couldn't get all of the records from the Bank as they declined to lend them to the researcher citing data protection (Ghauri, 2010). Although majority of the customers participated in the research and returned filled questionnaires some refused to do so, and some of the customers just filled the questionnaires for the sake of filling it without actually going through what is required (Beins, 2008). The difference in time zones also was a limitation as the researcher and the interviewee both had to squeeze time on a relatively free day so that they could concentrate fully on the questions asked and give out as much information as possible. Many articles and resources had to be left out as they were less relevant than the other relevant articles used in the research and literature review (Saunders et al. (2009).

3.14. Data Analysis tools

As the initial interviews were done through video conferencing, Skype was used as a tool because of its reliability and user friendly approach (Bryman and Bell, 2007). Pilot Questionnaires were sent out to the managers through emails which were further printed and distributed by the manager to few employees working in the bank. Detailed questionnaire was constructed using Microsoft Excel. Data was also processed through Microsoft excel spread sheets and there was extensive use of Microsoft word 2010 as it proved to be very useful with some of other graphical alternatives (Ghauri, 2010).

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