A literature review together with a customer survey present insights into the customer loyalty, customer satisfaction measures and CRM in banking. However, it is possible to conclude that the human element is likely to the most important for success in any banking organisation.
Customer relationship management (CRM) presents opportunities leading to higher profitability and superior competitive advantage (Roberts, 2005, Pp. 315 – 316). Thus, in an era when banks are facing tougher competition and superior efforts are required to enhance profitability, CRM methods have attracted a renewed interest in the development of banking strategy for enhanced performance (Blery, 2006, Pp. 116 – 117). Attempts to develop improved relationships with customers can lead to customer retention, a sense of loyalty among customers and improved long-term profits due to an improved bottom line result. Seminal work on CRM suggests that even a small increase in customer retention rates can result in large increases in the profitability of an organisation (Wilson, 2002, Pp. 193). Research studies have suggested that the costs involved with trying to retain customers are lower than the costs associated with the acquisition of new customers. Thus, it makes sense for banks and other organisations to try to improve customer retention and customer loyalty by applying superior CRM strategies as a part of their overall strategy. Thus, many players in the banking industry have invested heavily in customer relationship management within the past decade in customer relationship management in an effort to enhance customer retention rates and profitability (Dibb, 2004, Pp. 111 – 112).
Literature suggests that it is impossible to present a single, all encompassing definition of the term CRM and a number of definitions exist for the term CRM (Liu, 2007, Pp. 15 – 17). It is possible to define CRM in terms of being a management approach that enables organisations