Int. J. Electronic Customer Relationship Management, Vol. 3, No.

3, 2009 207

Customer relationship management activities in

e-banking: the case of Iranian banks

Abbas Keramati*
Industrial Engineering Department,
University of Tehran,
P.O. Box 11155-4563, Tehran, Iran
E-mail: keramati@ut.ac.ir
*Corresponding author

M. Farshid and E. Salehi-Sangari

Industrial Marketing and E-commerce Division,
Luleå University of Technology,
Luleå, 971 87 Sweden
E-mail: mana.farshid@ltu.se E-mail: ess@ltu.se

J. Toufighi Zavareh
Marketing Group, School of Management,
University of Bath,
Bath, BA2 7AY, UK
E-mail: toufighiz@gmail.com

Abstract: The aim of this research is to investigate customer relationship

management (CRM) activities in e-banking among Iranian banks. These banks
are already adopting CRM and approaching it differently, and achieving
different rates of success in terms of customer satisfaction and CRM. A
comparative approach of their attitudes toward CRM, therefore, will reveal
important insights. Following similar approaches researchers have employed in
Europe, Pakistan, Malaysia, the UK and Ireland, we investigated the touch
points and services that connect banks to their customers. According to these
researches in other countries, we have developed a theoretical framework to
investigate CRM activities in public and private Iranian banks by interviewing
with qualitative approach case study. The main components of our research
framework are: communicational/collaborative CRM, operational CRM and
analytical CRM. We also consider the relationship among the components. This
research will reveal Iranian banks’ positioning with regard to their view,
concept and the benefits of CRM, with a cross-case comparison between
Iranian banks’ CRM activities and also some conclusions for practitioners.

Keywords: customer relationship management; CRM; electronic banking;

e-banking; qualitative research.

Reference to this paper should be made as follows: Keramati, A., Farshid, M.,
Salehi-Sangari, E. and Toufighi Zavareh, J. (2009) ‘Customer relationship
management activities in e-banking: the case of Iranian banks’, Int. J.
Electronic Customer Relationship Management, Vol. 3, No. 3, pp.207–235.

Copyright © 2009 Inderscience Enterprises Ltd.

208 A. Keramati et al.

Biographical notes: Abbas Keramati is an Assistant Professor at the

University of Tehran, Tehran, Iran. He received his PhD in the area of IT and
productivity. His major teaching and research interests include customer
relationship management, information technology management, quantitative
analysis for decision making and research methodology.

Mana Farshid is a PhD student of E-commerce at Lulea University of

Technology. She received her MSc in Industrial Marketing and E-commerce
from Tarbiat Modares University and Lulea University of Technology. Her
major research interest is in e-commerce and customer relationship
management.

Esmail Salehi-Sangari is a Professor and the Head of the Department of

Industrial Marketing in Lulea University of Technology, Lulea, Sweden. He
also heads the Doctoral program in e-commerce at this institution and teaches
on its programs around the world, including Ghana, Iran, Spain and Costa Rica.
Educated in the USA and Sweden, his research interests are in the areas of B2B
e-commerce and his work has been published in journals such as the European
Journal of Marketing and Industrial Marketing Management.

Javad Toufighi Zavareh received his Master’s degree in Electronic Commerce

from Lulea University of Technology, Sweden and his MSc in Marketing at the
University of Bath, England. His postgraduate research interests primarily lie in
customer relationship management (CRM) and especially CRM in financial
services.

1 Introduction

Customer relationship management (CRM) is becoming increasingly important in the

provision of financial services (Jutla et al., 2001). If a bank develops and sustains a solid
relationship with its customers, its competitors will not easily be able to replace it;
therefore, this relationship provides for a sustained competitive advantage. Banks can
increase their profits by maximising the profitability of the total customer relationship
over time, instead of seeking more profit from single transactions. CRM techniques will
help banks if they improve the bank’s ability to: select, then manage the right client set;
determine which products and services should be profitably sold to which client and then
help the bank implement this sales plan; reduce the cost of coverage, particularly by
improving the productivity of sales professionals while maintaining quality of coverage
(Durkin, 2004).
CRM is an attractive area for research because of its relative novelty and exploding
growth (Park, 1999). Competition in financial sector is escalating, both from traditional
players and new entrants, owing to deregulation. Changing consumer behaviour and
needs, globalisation, deregulation, disintermediation and the emergence of new financial
service models are all dynamics in the financial services industry (Park, 1999).
The more a marketing paradigm evolves, the more long-term relationship with
customers gains its importance (Lindgreen and Antioco, 2005). CRM pursues long-term
relationship with profitable customers. It can be a starting point of relationship
management to understand and measure the true value of customers since marketing
management as a whole is to be deployed toward the targeted customers and profitable
 Customer relationship management activities in e-banking 209

ones, to foster customers’ full profit potential (Rowley, 2002). Corporate success depends
on an organisation’s ability to build and maintain loyal and valued customer
relationships. Therefore, it is essential to build refined strategies for customers based on
their value.
Banking has traditionally operated in a relatively stable environment for decades.
However, today the industry is facing a dramatically aggressive competition in a new
deregulated environment. The net result of the recent competition and legislation is that
traditional banks have lost a substantial proportion of their domestic business to
essentially non-bank competition. Competition will undoubtedly continue to be a more
significant factor while many banks have found themselves in this position with many of
their customers (Zineldin, 1996). Unlike manufacturing and some service industries,
bankers are not only selling products and services. First and foremost, they are selling
their organisation reputation with every ‘customer relationship’. A bank has to create
customer relationships that deliver value beyond the provided by the core product. This
involves added tangible and intangible elements to the core products thus creating and
enhancing the ‘product surrounding’ (Zineldin, 1996).
The focus of CRM helped banks to understand the customers’ current needs, what
they have done in the past and what they plan to do in the future to meet their own goals
(Xu and Walton, 2005; Keramati et al., 2008). The intelligent use of information about
customer needs will create long-term, two-way relationship with customers. CRM
enables banks to setup such strategies by managing individual customer relationships.
From the service oriented industry perspective, customer satisfaction and retention is
ensured by solving customer problems quickly. Customer satisfaction is made certain by
allocating, scheduling and dispatching the right people, with right parts, at the right time
(Xu and Walton, 2005).
In this internet age, when the customer is having access to a variety of products and
services it is becoming very difficult for banks to survive. When customer inquiries are
not met easily or transactions are complicated, the customer will ask for new levels
services and only chose those institutions who are making a real effort to provide a high
level of quality, fast and efficient service through all the banks’ touch points such as call
centres, automatic teller machine (ATMs), voice response systems, internet and branches.
This is a difficult situation which CRM is an opportunity that banks can avail to rise
above minor advantages by developing actual relationship with their customers.
Company committed to CRM must continuously invest in its relationship with its
customers, because it is the only competitive advantage remaining to an organisation
(Xu and Walton, 2005).
Different CRM activities are already being used in Iranian banks. Some of them are
using communicational CRM while others are using operational CRM. Some of these
activities are just for view, such as check balances, statements/accounts and historical
records. Others are for account controls, which include customer service and support
(CSS) activities of operational CRM such as amending accounts, ordering checkbooks,
transferring funds, paying bills to third parties, printing statements or standing orders,
sending messages and paying credit-card bills.
The aim of this research is to investigate the CRM activities that already exist in
e-banking activities in Iranian banks. Iranian banks are already adopted themselves
through this mindset. Iranian banks proceed to this important issue differently with
various rates of success in customer satisfaction and CRM. Therefore, with a comparative
210 A. Keramati et al.

approach their attitudes toward CRM will reveal and embrace their success and failure
factors. In the similar approaches that researchers have done in the case of Pakistan, UK
and Ireland, the touch points and services that connect the banks to their customers were
investigated. Considering the above-mentioned description, no prior research has been
done in this research area in Iranian context. Based upon this discussion, the problem area
has formed as: ‘How can CRM activities in Iranian banks be described?’
The other purpose of the research will be some comparative studies between private
and public banks in Iran. The study will not only compare public and private banks, it
will also investigate their relationships with each other and draw some comparisons
within the banks.
The research questions will be formulated according to research problem. Hence, the
research questions will be as follows:
• How Iranian banks can manage the analytical CRM? What they will do and what are
the strategies?
• How Iranian banks can manage the operational CRM? What they will do and what
are the strategies?
• How Iranian banks are managing their communicational CRM? What they will do
and what are the strategies?
Due to the structure of this research, first and foremost, literature review will be
discussed, then research methodology employed to address the research problem and
questions will be discussed. Next a comparison will be presented between the banks in
two segments of private and public banks and CRM activities in each bank. Finally,
conclusions drawn from the study will be presented and implications for management and
suggestions for further research and limitations will be discussed.

2 Literature review

2.1 CRM in banking

A lot of large banks have been adopting information-driven customer acquisition and
CRM, but at this stage, few can show clear bottom-line rewards from this effort
(Foss, 2002). However, a number of large banks in the USA, UK, Europe and Australia
have invested in data warehouses and data mining tools in the past few years (Ibid.).
They have been building models of consumer-segment profitability and behaviour, which
help them target direct marketing campaigns for the ‘right’ groups of customers. They
have been analysing and classifying consumer needs, assessing the risk of loss and trying
to predict demand and delivery methods for various types of customers. They have been
leveraging information for selling and enhancing the effectiveness of new customer
marketing campaigns (Foss, 2002).
According to Lindgreen and Antioco (2005), first European bank considered it vital
to develop a real-time database as a means to fully understand which types of customers
it was dealing with. In fact, customers interact with sales services and customer support
services through the distribution network, which comprise every possible channel to
contact the bank: agencies, call centres, customer service, home banking, self banking
and so on. The bank’s interactions with its customers should provide clear information,
 Customer relationship management activities in e-banking 211

which can then be used by the ‘back office’ for better marketing and peripheral services
(e.g., the presence of a particular employee to serve a particular customer and for
cross-selling) (Lindgreen and Antioco, 2005).
There are various definitions of CRM in the literature. According to Chalmeta (2006),
CRM is a ‘customer-focused business strategy that dynamically integrates sales,
marketing and customer care service in order to create and add value for the company
and its customers through increased satisfaction and loyalty’.
Tan et al. (2003) suggests that ‘the expression ‘e-banking services’ refers to the set of
processes and mechanisms that a virtual agent-based banking institution offers to agents
intending to engage in commerce activities in an agent environment’. Continuing
technological innovation and competition among existing banking organisations and new
entrants have allowed for a much wider array of banking products and services to become
accessible and delivered to retail and wholesale customers through an electronic
distribution channel collectively referred to as e-banking.
The e-banking services consist of two sub-services: electronic payment service for
enabling agents to make and receive payments; and account management service for
creating, maintaining and closing bank accounts.
According to Jayawardhena and Foley (2000), customer expectations from electronic
banking can be categorised under four different functions, namely, view-only functions to
have bank balances in check, action/account control functions to provide customers with
the broadest range of access and control over their accounts, applying for new banking
services to be able to make applications for core banking services and open new accounts
(savings accounts, loans, etc.) and integration reconciliation functions to manage their
finances with software packages (Jayawardhena and Foley, 2000).
A well-designed CRM shares the characteristics as:
1 Communicational/collaborative CRM for building online communities, personalising
services, developing business-to-business customer exchanges, etc. (Rollins and
Halinen, 2005). It makes interactions between a business, its channels and its
customers possible. It provides the means for the customer to contact the company
and enables collaboration between suppliers, partners and customers.
2 Operational CRM for improving customer service, online marketing, automating
sales force, etc. (Rollins and Halinen, 2005). It is the automation of customer-facing
processes. It handles the customer contact and processing. It manages and
synchronises customer interactions in marketing, sales and service.
The functions include sales force automation (SFA), automatically tracking a client’s
account history for repeated transactions. The goal of SFA is to allow the sales force
to concentrate more on selling and less on administrative tasks (Injazz and Karen,
2003). Enterprise marketing automation (EMA) for evaluating valuable customers
and segmentations for some strategic marketing, and CSS for delivering personalised
and efficient services to the customers.
3 Analytical CRM for building data warehouses, analysing data, improving
relationships, etc. It uses customer data to create a mutually beneficial relationship
between a business and its customers (Rollins and Halinen, 2005). This analysis,
modelling and evaluation help to optimise information sources for a better
212 A. Keramati et al.

understanding of customer behaviour, so that make the contact to be more

personalised.
These CRM technology applications link front office (e.g., sales, marketing and customer
service) and back office (e.g., financial, operations, logistics and human resources)
functions with the bank’s customer ‘touch points’ (Fickel, 1999).
As it mentioned before, customer satisfaction is essential for increasing the
competitiveness of companies and achieving customer objectives. To improve customer
satisfaction, it is necessary to identify customer needs and expectations and ensure they
are met. This requires the construction of a measurement system fed by information, part
of which will come directly from the customer and part will be extracted from the
company’s computer system. Data stored in the contact centric database is analysed
through a range of analytical tools in order to generate customer profiles, identify
behaviour patterns, determine satisfaction level and support customer segmentation. The
information and knowledge acquired from the analytical CRM will help develop
appropriate marketing and promotion strategies. Therefore, if the bank’s systems relating
to various types of accounts and services did not recognise that the same customer
interacted with bank in a number of ways, relating to different services of the bank, it
would not be possible to take a complete view of the customer – and his/her value to the
bank. In term 360° customer view has been coined to refer to this need for a view of the
complete set of interactions between an organisation and its customers (Kotorov, 2002;
Dyche, 2001).
In summary, analytics drives decision making in operational CRM for the deployment
of marketing sales and customer service processes (Reynolds, 2002). But without the data
collected via the operational CRM processes, analytical CRM would not have any data to
work with. The data processed by analytical CRM tools could not be effectively
disbursed and strategic decision making would not occur, without collaborative CRM.
Collectively, operational CRM, analytical CRM and business intelligence work
simultaneously to drive the customer life cycle (Reynolds, 2002).
Reynolds (2002) suggests that CRM applications can commonly comprise: call centre
automation, campaign management, contact management, data warehousing, e-mail
management, field service automation, knowledge management (KM), marketing
automation, personalisation and SFA. Rapidly improving technology has allowed
organisations to make the best of each customer contact. Each relationship exchange
incurs transactional and/or non-transactional data. Transactional data typically include
sales amount, transaction time, place and buyers while non-transactional data may
include inquiries or feedback in the form of complaints or suggestions. Both transactional
and non-transactional data must be organised into an integrated customer data profile
because such information is what makes customer interaction powerful (Wells et al.,
1999).
Enabled by advanced information technologies, banks can now collect unprecedented
amount and depth of data on their customers and turn them into information for their
strategic business purposes. Here, the important issues are: to identify what kind of
information they need; about whom they will collect this information; and how they will
manage such information for future use. Once able to identify its customers, a firm can
make its customer-base more loyal by collecting, processing and applying customer
profile and transaction data to create in-depth understanding of customer needs and
provide fair value to all customers. According to the content and interaction types,
 Customer relationship management activities in e-banking 213

customer information can be classified into three types: information of-the-customer

which personal and transaction data about a customer; information for-the-customer is
the product, service and organisational information that is perceived useful by customers;
and the third type is ‘by-the-customer’ information. This is the non-transactional
customer feedback information that includes customer complaints, propositions, claims,
etc. (Wells et al., 1999).
Segmentation is a key method employed by banks to better understand and service
their customers in this increasingly competitive environment. The goal is to solve the
conflict between the intentions to satisfy customer needs as individually as possible but
also to allocate marketing resources as economically as possible (Machauer and Morgner,
2001).

2.2 Research framework

The purpose of this section is to build an appropriate frame of reference for investigating
CRM activities in e-banking of Iranian banks.
By customer management, banks are going to find the right customers (those with an
acceptable current and future net value), getting to know them (as individuals or groups),
growing their value (if appropriate) and retaining their business in the most efficient and
effective way.

Figure 1 The emerged framework investigation of CRM activities in Iranian banking industry

Hence, banks can improve customer retention and loyalty; customers stay longer, buy
more often and increased long-term value; higher customer profitability because of lower
costs of recruiting customers and no need to recruit so many customers to maintain a
214 A. Keramati et al.

steady volume of business; reduced cost of sales, as existing customer are usually more
responsive (Stone et al., 2002).
An essential part of the information is gathered from the customers through
different channels. It is important for these channels to be integrated and gathered in a
single database. The analytical part of the CRM should be able to create a variety
of customer segments considering customer feedbacks from the database. These
segments will be used to design decision making algorithms by the operational part
and then will be presented to the customers. Unless the above-mentioned steps are
conducted one after another in a chain format, the process will not be performed
successfully.
As a result of the literature review, Figure 1 is presented which shows the emerged
investigation of CRM activities in banking industry. The introduced framework in
Figure 1 would be the basis of the current investigation on banking activities of four
public and private Iranian banks.

3 Research methodology

Figure 2 shows methodology of this research schematically. As Figure 2 shows research

approach and strategy are determined based on research problem. Research approach and
strategy are described in this section as well as methods of data gathering, data analysis
and quality issues.

Figure 2 Research methodology

Research problem:
“How can CRM activities in Iranian banks be described and compared between private
and public banks?”

Research approach Research strategy Research methods

Multi case study: Semi-structured

including two interviews interview guide
segments: analysis:
Qualitative Private banks Analysing each case with
research respect to research
Public banks framework
Cross-case analysis
(within-segment and
between-segment analysis)

Quality issues
Quality of data (reliability, validity), quality of Instrument, validity of results
 Customer relationship management activities in e-banking 215

Research approach and strategy

As the purpose of this study is to gain an in-depth understanding of the CRM activities in
e-banking of Iranian banks, the selection of qualitative approach was found to be more
appropriate to fulfil the stated purpose since case studies are being used and it requires
assessing abundant information. In addition, as this study is intended to explore, describe
and find as many as detailed and complete information as much as possible, the
qualitative approach is found the most appropriate method of study. In this research,
multiple-case study design was selected due to the fact that this research is not dependent
on a single, critical, extreme, unique or revelatory case. Furthermore, multiple-case
studies will provide more in-depth information about the research problem concerning
definitions, profits and different characteristics of CRM in e-banking, thus will result in a
higher degree of validity (Zineldin, 1996).

Data gathering technique

The data for this study that is collected is expected to be mainly of a qualitative nature
since it is in the form of words and not derived from numbers. The data gathering
technique is semi structure interview.

Instrument
The instrument is interview guide which is conducted based on frame of reference of the
literature review and also some information and knowledge from pilot survey. The
interviews are conducted in semi-structured form.

Quality of instrument
In the spite of preparing the interview guide with open ended questions, was pre-tested by
a number of researchers from CRM, management and banking fields and also by industry
representatives. Additionally, the instrument was also reviewed by a number of
researchers, thus, higher level of validity and reliability could be achieved. Suggestions
from this group resulted in an additional modification of the interview guide.
To increase the validity and reliability of the research instrument, used to collect data,
the interview guide was evaluated by attendees from banks participating in the pilot study
so that it can provide a comprehensive view, the interviewees were contacted in advance
about the matters were going to be discussed and also to assure that they are qualified for
our interviews. Some suggestions resulted in modification of the interview guide.

Unit of analysis
Considering the fact that the research problem deals with competencies between Iranian
banks, CRM is an opportunity that banks can avail to rise above minor advantages by
developing actual relationship with their customers, the unit of analysis is the whole bank
(marketing, CRM, public affair, credit and facilities, decision making and also IT
departments).
216 A. Keramati et al.

Data analysis method

The data of this research are gathered from four Iranian banks, two of them are public
and two are private. All the banks involved are commercial and target the same audience.
They all serve the public. This study deals with a complex phenomenon of context and a
variety of cases studied (private and public banks) within a pre-defined conceptual
framework (presented in Figure 1). Thus, an analytical strategy that relies on the
theoretical framework developed has been used. In order to compare the two categories
(public and private banks), a four-fold matrix is designed enabling us to compare and
analyse. In order to extract the suitable data, a search was done inside the organisation to
find the expert personnel who are somehow involved in the CRM process. Field notes
and documentation have been translated from Persian to English because all the
interviews were conducted in Persian, rewritten, revised, coded and displayed in
accordance with the conceptual framework.
As Figure 3 shows, three steps were followed for data analysis of this research. First,
the data is reduced through a case analysis where the four cases compared with the theory
in the frame of reference. Second, all of the data will be reduced further through being
displayed in order to have a cross-case comparison between cases in each section, which
means private and public banks and then in the third step it will have cross-case analysis
between each section, comparison between private and public banks based on the
research questions. Finally, conclusions will be drawn based on the each case and
cross-case analysis.
In order to do cross-case analysis of the data, similarities and differences across the
cases were located and analysed. It is important to say that, the interview protocol
included questions standardised around topics such as a manager’s perception of what
CRM constitutes, the objectives and the benefits of the CRM programmed on the
technological and organisational infrastructure of the bank.

Quality of data
Yin (2003) states that the process of data gathering is complex in case studies and the
case study researchers, therefore, must have ‘a methodological versatility’ and need to
‘follow certain formal procedures to ensure quality control during the data collection
process’. The main method of data collection selected for this study was personal
interviews, as this method is insightful (Yin, 2003) and makes it possible to gather large
amounts of data quickly, with a potential for immediate follow ups and clarifications
(Marshall and Rossman, 1999). In addition to personal interviews, documentation, mainly
containing bank information (annual reports, organisational charts, brochures, web pages)
has been used as a means to confirm and strengthen evidence from other sources. The
focused interview allows an informal conversation, though it is partly structured:
‘following a certain set of questions derived from the case study protocol’. Finally, the
structured interview is guided by a thorough set of pre-designed questions and, thus,
resembles a formal survey.
Furthermore, Yin (2003) states that reliability aims at minimising errors and biases in
a study. In this study, attempts to reduce the biases have been made by carefully
describing the data collection method and through extensive and thorough documentation
of each bank. In order to increase the reliability of this research, the researchers will try to
avoid leading, subjective questions and will take notes during the interviews.
 Customer relationship management activities in e-banking 217

Furthermore, the interviews were recorded by a voice recorder. The data validity was
ensured through multiple sources of evidence (multiple interviewees and document
analyses) and by the interviewees reviewing the case interpretations.

Validity of results
The final emerged theory would be once again validated by interviewing a sufficient
number of experts in each case, using the feedback method which means that after
analysing the data which were gathered the results were shared with experts in each bank
and checked them all. In this way, the participants were given an opportunity to
corroborate or disagree with the main findings of the study.

4 Findings

Miles and Huberman (1994) further point out that there are two types of data analysis:
within-case analysis and cross-case analysis. The within-case analysis is carried out when
collected data in a single case will be compared with the theory included in the frame of
reference to identify the differences and similarities. In the cross-case analysis, where
several cases are involved, the objective is not only to compare those cases with each
other but also to be able to increase generalisability.

Figure 3 Three steps of data analysis: case analysis (Step 1); cross-case analysis: within segment
comparison (Step 2); and between segment comparison (Step 3)

In this section, the empirical data collected from documents and interviews of four
selected banks which are named PR1, PR2, PU1 and PU2 banks. They are separated into
two groups based on the public (PU) and private (PR) sections. The data is collected and
analysed based on our frame of reference (Figure 1) and the interview guides (Appendix)
which are going to describe above. The data has been analysed in two levels of analysis.
At the first level, results obtained from each case is reported separately and analysed
based on theoretical framework presented in Figure 1. At the second level of analysis, a
218 A. Keramati et al.

cross-case approach for data analysis is applied. Figure 3 summarises cross-case analysis
method which includes within segment and between segments analysis. Within segment
analysis is devoted to comparing private and public banks (PR1 vs. PR2 and PU1 vs.
PU2) and between segment analysis includes comparison between public banks and
private banks (PR vs. PU).

4.1 Case analysis

PR1
In this section, the data were reduced through a case analysis where each case compared
with the theory in the frame of reference (Figure 1).
Table 1 Communicational CRM (touch points) in private and public banks

Communicational
PR1 PR2 PU1 PU2
CRM
Automated teller 3 3 3 3
machine
Branch 3 One-to-one 3 Customer 3 Customer 3 Customer data
experience feedback identification,
service quality
for staff
Call centre 3 CRM 3 Feedback 3 (1,556/smart
communication, customer
financial advice communication)
– feedback
information
E-mail 3 Information 3
management and tracking)
Help desk 3 (in progress)
Internet banking 3 (e-payment) 3 3 3 (check balance,
transferring funds,
paying bills,
customer contact)
Mobile banking 3 (pilot) 3 (offline/just 3
for view)
Pin pad 3
POS 3 3 3 (online) 3
Special customer
portals
Telephone 3 3 3 (offline/just 3
banking for view)

Broadly speaking, PR1 Bank provides its services in two ways for serving the customers:
1 Via branches and traditional banking system: Increasing the number of branches
from 24 to 156 during two years with the purpose of extending services.
 Customer relationship management activities in e-banking 219

2 Via expanding e-banking: Considering the priority of electronic banking, during the
last two years PR1 Bank provides several services employing various mechanisms
with the purpose of providing customers at their home or work. This approach
includes marketing activities in following areas: electronic card services: perusing
public and private organisations to use such cards for paying salaries or bounces,
extending the use of ATMs and point of sale (POSs), expanding the internet payment
method identifying and contracting one-by-one with the websites offering e-selling
services [smoothing the e-payment processes, telephone banking, short message
service (SMS) banking and ATMs for its customers by the permission of the
responsible ministry and contracting with telephone, electricity and other supplier
companies] and also telephone bank, SMS bank and internet bank (Table 1).
About PR1 Bank, in order to make good decisions and strategies, it requires controlling
its relationship with its customers in order to mitigate and manage the risks. Currently,
integrated CRM, management information system (MIS) and risk management systems
are being implemented.
PR1 Bank started its career with a limited and special set of customers requiring few
branches and no need for CRM system. But when the so-called paradigm shift occurred,
it required attracting customers and offering competitive benefits. Actually marketing and
CRM office slowly formed. Then PR1 defined subsets; hence, valuing the customers who
are appropriately served which leads them to regular contact with the bank, offering them
all they need. PR1 tried to establish a creative relation with customers leading to added
value for them. Moreover, PR1 realised that all valuable data can be extracted from CRM
so they could create reports regularly.
PR1 considers CRM as a benefit to control their subsidiary companies and supply
their information by measuring their performance. At the beginning this was very
premature but slowly this new CRM was established with some cultural efforts.
E-banking services were setup because they wanted to be in regular contact with its
customers. Another approach is to increase the branches along with ATM and POS
services which demand CRM systems.
The private banks in this study are members of Tehran Stock Exchange. Their big
customers have considerable turnovers and bank activities which influence the EPS and
stocks’ price. Hence, it is apparent that PR1 needs to be well involved with their
customers. In the case of analytical CRM, as shown in Tables 3(a) and 3(b), PR1 Bank,
collects data via its website, call centre and branches which further provides information
resulted in customer satisfaction and core banking data, then combining them with the
events occurring in the society makes decisions in line with system integration, product
innovation and redundant competency. Customer profile generation is not done uniformly
yet here, nor is customer behavioural patterns detected. Marketing application
development promotion is not done clearly from the knowledge.
In the case of operational CRM, PR1 Bank has managed to serve its customer and
trace their requests using call centre (Table 2). Valuable customers are detected by the
traditional way in the branches or following a request from the database. In order to
communicate with its customers, PR1 has increased the number of branches and the
serving hours. In the branches PR1 establishes special relationship with its customers in a
traditional way. In the call centre, PR1 serving customers 24 hours a day/seven days a
week/365 days of year.
220 A. Keramati et al.

Table 2 Operational CRM activities in private and public banks

Operational CRM
PR1 PR2 PU1 PU2
activities
ATM monitoring 3
with remote access
Branch 3
(traditionally)
Call centre 3 3
Contact 3
management
(smart customer
communication)
Credit card 3 (pilot) 3
CSS

Electronic cards 3
Field service 3 (information 3 (special
automation for tracking the customer
process in portals)
foreign exchange (in progress)
department)
Help desk 3
International 3(cards)
service
Queue system 3
from branches
Mass marketing, 3 (SMS, ads.) 3 Traditionally 3 Public
advertising, affair
marketing
EMA

Personalised 3 (loyalty system 3 (by human 3 (special

marketing with credit cards) connections) package
(pilot) customers)
Online 3
documentation
SFA

(special
customers/facilities
office)

PU1
In the case of PU1 Bank, there is no such system as CRM. There are divisions which are
doing this in the traditional way. Public Affairs Department does the customer support
and advertising like informing people what services are offered. They have built a call
centre which is going to become a contact centre. Except for phone, other services like
SMS or internet are pretty new here. They are responsive but the backing tree of
knowledge is flawed. There is no CRM system for the customer. There is an activity
cycle with some parts manual, some parts are batched and some parts are automated or
online. PU1 Bank is now maintaining 2,010 branches throughout the country. PU1
Bank’s ultimate goal is to meet their shareholders expectations. Considering their only
shareholder is the state, PU1 should do as to satisfy the state’s expectations.
 Customer relationship management activities in e-banking 221

Complementary services like cards or ATM is important in this bank because it

attracts customers (Table 1). Otherwise it has lost the competition to other banks.
Customers are now well aware of what they want and who can give it to them. Hence,
due to the fact PU1 has to serve their customers first and also make mutual relationship
with them. In order to compete in the field, PU1 believes that it should identify the
customers in branches and has access to their history and transactions; thus, PU1 is after
informing and integrating data which is only possible via the suitable infrastructure.
Regarding other touch points like internet, they have to pursue managers to adopt these
new services.
Table 3a Analytical CRM activities: data collection and data warehousing

Analytical CRM
PR1 PR2 PU1 PU2
activities
ATM 3
monitoring with
remote access
Branch 3 Customer 3 (customer 3 (feedback) 3 (customer
satisfaction, feedback, satisfaction,
core banking behaviour) customer loyalty
(Negin) behaviour)
Call centre 3 3 (feedback of
ads., queue
technique,
timing)
Core banking 3
Data collection

(SGB)
Exit interview 3
Focus group 3
Queue system 3
from branches
Secondary data 3
of socially
SHETAB 3
(ATM
operations in
contrast of
competitors)
Website 3 3 (tracing
customer
navigation and
such)
Databases 3 (not 3 Separate 3 (offline) 3 Different
Data warehousing

integrated) databases (Roaming huge databases

accounts
database)
(online)
Data 3 (in progress)
warehousing
222 A. Keramati et al.

As illustrated in Tables 3(a) and 3(b), in analytical CRM, data analysed by the decision
making unit but information like customer feedbacks from the branches or contact centre
are not used in the way of strategy planning. Due to some infrastructural issues, data are
not available in real-time and online. Database is designed in a way capable of providing
some specific statistics and data but it is not possible to identify a unique customer in
different branches. Results of focus groups and exit interviews are used to take better
strategies. Risk management is precisely done here using the gathered data from the
database. As the bank managers mentioned in the interviews, this bank buys some
secondary data of society from data seller companies. They actually use this for market
analysing which is done traditionally but by managers who are very experienced. This
bank controls their competitor’s card transactions in their ATMs in order to compare it
with their own and planning strategies in this part.
Due to the lack of information about customer’s behaviours and subsequently lack of
segmentation, it is not possible to decide for advertising purposes and other services. As
regards with communicational CRM (Table 1), PU1 hold focus groups in which
managers directly get feedback from customers, gathering their suggestions and views.
PU1 believes that this improves their relation with customers and makes them feel a
sense of loyalty and closeness to the bank.

PR2
PR2 Bank started its business in 2002 upon concurrent inauguration of four branches.
The special object is to improve economical affairs by developing industrial activities by
supplying facilities and expanding new finance tools and also financially supporting
construction, trading and consumption industries. CRM is done inside the banking system
without any specialised sub system.
IT manager said that:
“CRM is possible when accompanied by strategic management and planning. If
the customer knows that the system is operating according to the current needs,
he will keep his connection with the bank continuously (mutual relationship).
The only way to see and keep the customer’s needs close is to store them
uniformly in a database.”
Some strategies like CRM see major modifications when high-ranking managers change.
Some are under the influence of environmental and social effects. These should be
adaptable and updated accordingly. PR2 Bank tries to discover customer’s demands by
studying their way of living and priorities in their requests and then they design new
services and tools [Tables 3(a) and 3(b)]. This is yet immature and is not performed
amply. PR2 believes that environmental and economical fluctuations have a huge impact
on the bank. CRM vision in PR2 bank is to manage service cycle by focusing on
beneficent customers directing them towards up-selling and cross-selling. Keeping the
customer is vital for them and they perform all these various customer-related programs
in order to raise the profit and decrease the costs. They try to offer high quality services,
thus keeping the customer permanent and satisfied leading to more income. In order to be
capable of serving CRM demands, data uniformity and integrity are necessary all over the
bank. Data mining is done in planning and development unit for plan to identify branches
to install TV sets, banners and a trained employee explaining services to customers in a
cosy environment [Tables 3(a) and 3(b)].
 Customer relationship management activities in e-banking 223

Table 3b Analytical CRM activities: KM and decision making

Analytical CRM activities PR1 PR2 PU1 PU2

Customer 3 3 (not integrated, 3 (traditionally) 3
segmentation different in
departments)
Customers 3
behaviour
Customers churn 3
Data analysis (CLV, 3
customer churn)
Economical 3
information
Environment 3 (competitors) 3
information
Financial issues 3
KM

Focus group 3
Manually data 3
mining
Market analysis 3
Product innovation 3
Public affairs 3
(feedback)
Redundant 3
competency
Risk management 3 3
Secondary data of 3
society
System integration 3
Balance score card 3
(BSC) (in progress)
Decision making 3 3
Decision making

Master plan 3
(in progress)
MIS 3 (in progress) 3
Risk management 3 (in progress)
Web-based 3
management
application

As shown in Table 2, in the operational CRM section, PR2 bank has initiated a call centre
performing some help desk activities without any data output and analysis. Regarding
SFA which is all about ability to tracking the customer’s account, a suitable service is
available for foreign exchange department. This service is being promoted and upgraded.
Personalised marketing is done by the human connections. Bank has performed many
activities regarding e-banking and various services which is one of the improvements of
the country’s banking system. But information acquired from these touch points are not
224 A. Keramati et al.

gathered and analysed properly; hence, no feedback exists for advertising planning and
marketing.

PU2
About PU2 Bank, they tended to have infrastructure for implementing the workflow
management to integrate the different CRM activities through the banking network such
as special services of tele-banking, SMS and internet banking and various cards such as
electronic wallet (Table 1).
In the past, heads of the branches used to know their customers in their minds but as
customers increased, this approach proves useless. Therefore, they had to segment them
and finally automate this process and add some mechanisms to it. Hence, they find
themselves in the need of controlling and managing their relationship with their
customers through their branches and other touch points. There are different sections
which are not integrated yet. They are in the contact management phase at the moment
and have not step into analysis yet. At the back of the CRM is the core banking project
which is going to provide a complete information flow of the banking data. Upon request
data are fetched from database, but back office should have the request of the front office
to provide such information. Complaints are gathered from the system and then being
taken care of at the supervision division. This would be the most important benefit of
managing customer relationship from their viewpoint.
None of the bankers currently offer any special kind of services to their special and
core customers. They basically do what others do more quickly or with extra features to
some owners of the current accounts that they refer to them as special customers. Bank’s
viewpoint is that customer is customer, yet some special customers may have the same
services in other ways. These services may vary according to branch managers’
knowledge about the customer.
In case of customer relation, focus should be shifted towards the contact centre
(Table 1). This centre should be capable of handling all the communications and gates to
the customers like fax, e-mail, telephone and other channels. It should have a smart
tracing system. Queue technique, timing for the operators, managing internal group and
reporting are some of the other highlights. Customer information is registered in the
system as transactions. Each part of customer information is gathered in new services.
Researches then use this data. There is no such a system to take customers data as input
and then performs analysis and segmentation on them in order to do marketing or attract
new customers. Older systems do the statistics manually and somehow data mining. New
systems ask for customer’s national code and a few more items but these are not entered
into customer’s account, even if they do, there is no centralisation and uniformity.
In the operational CRM section, (Table 2), a websites is designed to serve valuable
customers. In the primary steps, SFA is done which leads to saving time and energy of
both customer and bank. The goal is to serve the customers better. Hence, the output of
systems is analysed. Electronic banking is done very well here comparing to either public
or private banks but it is not known due to the lack of adequate publicity.
Different approaches and various ways are used to communicate with the customers
but due to being big organisation and relatively large number of branches, branches
require a long time in order to collect customer information in a data-warehouse. From
their point of view, first special customer services should be initiated and then steps
should be taken towards integration [Tables 3(a) and 3(b)].
 Customer relationship management activities in e-banking 225

4.2 Cross-case comparison analysis

In this section, all of the data will be reduced further through being displayed in order to
have a cross-case comparison between cases. Finally, conclusions will be drawn based on
the each case and cross-case analysis.

Private banks
Comparison of PR1 and PR2 Bank will be discussed in this section. CRM is done inside
the banking system without any specialised subsystem. The only reason to have CRM is
the competition to keep the customer satisfied and absorb new customers because it is the
customer who keeps the bank running. High competition exists among the banks and
particularly among the banks in the private sector. Growing branches, lack of qualified
personnel, the necessity for providing precise and whole services demands CRM systems.
In private sector, it is necessity to attract the customers due to not having any support or
sponsor such as public banks to count on. The private banks believe in offering high
quality, new e-banking services and since they are in the embryonic stage of their
experience, thus focusing on expansion and they think at the next stage they are going to
improve the quality of their services. As it mentioned before, PR1 Bank have done some
communicational CRM through the call centre which makes is more powerful in
collecting information and managing customer relationship. Both of them are trying to
cover the different e-banking services and support their systems with various facilities
and have competition with each other on this case. Both private banks work with queue
system from branches but PR2 Bank has much more control on the information gathered
from this service for proving the quality of its services in branches and does some
analysis through serving customers. Furthermore, they have some problems with their
core banking systems which is very important for having the customer’s transactional
information for different purposes such as segmentation, customer life time value,
customer churn, etc.

Public Iranian banks

In spite of trend discussed, PU1 Bank and PU2 Bank compared as two cases were known
as Iranian public banks. Iranian public banks’ ultimate goal is to meet their shareholders
expectations. Considering that their only shareholder is the state (government), and the
state wants them to receive people payments for public services, although it incurs loss
they should do as to satisfy state’s expectations. As mentioned before, public banks are
supposed to create job opportunities, invest in new services, providing public companies
with facilities is regarded as the last in benefit making. And customer satisfaction, in case
of absorbing their mandatory supplements especially personal customers is not the
priority goals of public banks. Government wants them to serve the public customers and
do their job well. In the Iranian public banks’ point of view, customer is customer; yet
some special customers may have the same services in more delicate ways. These
services may vary according to the managers’ knowledge about the customer. Customer
tracking is generally difficult and especially in the public banks it is even more difficult
due to the lack of a centralised banking system. A customer may have a short-term
account in a branch and it is not easy to track. Both public banks extract customer’s
information (like his history or if he has been a good pay or not) in order to respond to
226 A. Keramati et al.

them. They are after customer’s behavioural patterns and their loyalties. The growth trend
of PU1 Bank, in contrast with PU2 Bank, goes somehow at the slower pace in case of
electronic-based services and infrastructures because of their experience in the traditional
CRM through the years of serving the customers, they have such valuable processes and
knowledge but they don’t have the facilities to improve the waste operations through the
market.

Public and private Iranian banks

As it is shown in Figure 3 it will have an analysis between each segment, which means
comparison between private and public banks based on the research questions. Finally,
conclusions will be drawn based on each case and cross-case analysis. Therefore, the next
step of the research will be some comparative studies between two major types of banks
which are private and public in Iran. Visions are different in public and private banking.
Private banks started their way by centralised banking systems; they have fewer branches
and thus fewer customers. They could not be compared to public banks. Public banks are
bigger, larger and older and it takes a long time to uniform their system. Upon request,
data are fetched from database but back office should have the request of the front office
to provide such information. Complaints are gathered from the system and then being
taken cared of at the supervision division. Private banks are starting their work based on
e-banking and working on that to better serve and supply customer needs but public
banks are trying to convert their bases and formats from traditional banking to the next
generation of banking; hence, they will have different kinds of problem in this way and it
will take much more time, energy and money. In public banking, these banks have few
big customers; most of them are also in public sector; therefore, it is not up to them to
work with some bank of their own choice. This means public banks have no special
mechanism neither to attract nor absorb them. Increase in the income and decrease in the
costs are among the specific goals. Big customers are not very highlighted though. They
said that they serve all the customers; although they pay a little more attention to big
ones.

5 Theoretical and managerial implications

On the theoretical part, an emerged framework comprise investigation of CRM activities

in Iranian banking industry is proposed which can be further investigated in other
contexts and see if it can be confirmed in those countries. On the practical part, how to
implement the analytical, communicational and operational CRM systems for CRM
activities is beyond the scope of this paper, however, some issues tend to be critical to all
types of CRM systems’ success; thus are outlined below and should be taken into account
when implementing CRM systems. In spite of the data which were gathered and analysed
based on frame of reference Figure 1 and Tables 1, 2 and 3 which were presented before,
some managerial implications regarding using CRM strategy in Iranian banks will be
described as follows.
 Customer relationship management activities in e-banking 227

1 Continual training regarding CRM considering process, responsibilities and

technologies: High ranking managers should be trained in order to stimulate their
sense of responsibility; training specialists not to have a technological view of CRM.
In some organisations, CRM is simply a technology solution that extends separate
databases and SFA tools to bridge sales and marketing functions in order to improve
targeting efforts. Other organisations consider CRM as a tool specifically designed
for one-to-one (Pepper et al., 1999) customer communications, a sole responsibility
of service, call centres or marketing departments. But CRM is not merely technology
applications for marketing, sales and service, but rather, when fully and successfully
implemented, a cross-functional, customer-driven, technology-integrated business
process management strategy that maximises relationships and encompasses the
entire organisation (Goldenberg, 2000).
Several researchers and practitioners relate CRM with people, processes and
technology. According to Injazz and Karen (2003), CRM is a ‘combination of
people, processes and technology that seeks to understand a company’s customers;
moreover, it is an integrated approach to managing relationships by focusing on
customer retention and relationship development’. Hence, it is important to train the
people to how to be involved with the customer directly or indirectly. Technology is
certainly one of the key enabling or supporting factors in CRM, but by itself it does
not constitute CRM.
2 Identification of the required technologies such as: Studying the current situation of
the available technologies, identification and choosing of the mechanisms during the
execution of the new strategy, defining and registering the novel all-purpose banking
system, designing and implementing the new data warehouse and also contact centre.
Because customer-oriented process activities are distributed across different
enterprises, these processes have to be integrated among the partnering companies.
Some networks also have different contact persons for a single customer. This is a
typical characteristic when process integration is lacking, leading to inefficiencies
and poor service quality.
Integration between the multiple touch points with customers, operational CRM, the
analytical CRM, and KM tools is required in order to maximise the full power of the
analytical system. Bolton (2004) suggested that implementation may fail because the
organisation fails to adopt a clear strategy and also fails to make appropriate changes
to its business process. Too many companies install a CRM software application in
the belief that this will deliver the CRM capability the company needs. The most
common fault was to focus on technology in setting out to implement CRM, to the
exclusion of people, process and organisational changes required (Bolton, 2004).
A bank’s touch points can include the internet, e-mail, direct mail, telemarketing
operations, call centres, advertising, fax, branches and kiosks. Regardless of the
channel or method used to contact the company, customers receive the same
consistent and efficient service. Often, these touch points are controlled by separate
information systems. CRM integrates touch points around a common view of the
228 A. Keramati et al.

customer (Eckerson and Watson, 2001). Furthermore, it is very important to have

appropriate information about customers; hence, if the bank’s systems relating to
various types of accounts and services did not recognise that the same customer
interacted with bank in a number of ways, relating to different services of the bank, it
would not be possible to take a complete view of the customer – and his/her value to
the bank. The term 360° customer view has been coined to refer to this need for a
view of the complete set of interactions between an organisation and its customers.
3 Customer management assessment tool (CMAT): Assessments bring together a range
of tools and methodologies that provide a detailed, objective, benchmarked
assessment of an organisation’s capability to effectively manage its customers
(Stone et al., 2002). These tools and methodologies include assembling customer
satisfaction measurement system (CSMS) with identification of the customer
satisfaction indicator by either interviewing them or forming hubs, assembling the
customer satisfaction measurement questionnaire and validating it, data analysis
using structural models, interpreting the data in order to device practical plan
targeted at customer satisfaction and increasing it.
4 Customer segmentation: This include segmenting customer according to
demographic and other properties (commercial, industrial, import and export,
manufacturing, services, public, private, permanent, temporary, big, foreign
exchange or credit). The bank would need a complete view of its customers across
the various channels and systems that contain their data. If the bank could track
customer behaviours, then executives can have a better understanding a predictive
future behaviours and customer preferences. The data and applications can help the
bank manage its customer relationship to continue to grow and evolve (Dyche,
2001).
Xu and Walton (2005) state that CRM technologies allow the organisation to gain an
insight into the behaviour of individual customers. Furthermore, it turns to target and
customise marketing communication and messages. In addition, these tools generate
data that support the calculation of customer lifetime value (CLV) for individual
customers. This indicates that the best CRM implementations offer advantages to
both the organisation and its customers.
5 Strategy planning for marketing and service providing for each segment of
customers: CRM enables organisations to setup such strategies by managing
individual customer relationships. From the service-oriented industry perspective,
customer satisfaction and retention is ensured by solving customer problems quickly.
Customer satisfaction is made certain by allocating, scheduling and dispatching the
right people, with right parts, at the right time (Xu and Walton, 2005).
6 Calculating of the CLV: calculating the probability of either return or churn of the
customer. The first step in the CRM evaluation is to determine the mission and goal
of CRM. Once this is decided, the next step is to establish a CRM strategy. The
purpose of this step is to gore out the principle strategic factors. After figuring out
the strategic factors, the next step is to find interrelationships among CRM activities
and business goals (business goals being increased profits) (Kim et al., 2003). By
analysing these relationships, we can learn what should be done to achieve better
 Customer relationship management activities in e-banking 229

outcomes and what perspectives are important towards achieving the outcomes. The
outcome of the analysis is evaluated to identify the effectiveness of CRM. This
assessment gives further insights into the CRM strategy and helps the marketer to
determine the strategy of CRM (Kim et al., 2003). These banks have to create a
vision based on customer, identifying customer-based processes, recognising
available and required resources for extending CRM and prioritising CRM
development possibilities.
7 Transforming the customer data into knowledge: Using that knowledge which
transformed from data to build relationship with their customers due to create
customer retention and loyalty, higher customer profitability, creation value for the
customer, customisation of products and services, lower process, higher quality
products and services, having integrated single view of customers, by using
analytical tools (Greenberg, 2001; Newell, 2000), managing customer relationship in
a single way regardless of the communicational channels, improving the
effectiveness and efficiency of the processes involved in customer relationship,
select and then manage the right client set, determine which service should be sold to
which client, profitability and then help the bank implement this sales plan and also
ability to coordinate the multi-product, multi-country relationship in real time. The
above-mentioned are some of many potential benefits which are provided by CRM
(Jutla et al., 2001; Foss, 2002).
Managing customer relationships effectively and efficiently boosts customer
satisfaction and retention rates (Reichheld and Sasser, 1990). CRM applications help
organisations assess customer loyalty and profitability on measures such as repeat
purchases, dollars spent and longevity.
The implications for management of using analytical CRM lay not so much with
improving operational efficiency as with other CRM systems, but rather with the
empowerment of management in the strategic decision-making process. Such
empowerment is achieved through customer knowledge acquisition and knowledge
sharing, thus enabling the business to become a knowledge-driven organisation. To
achieve this, senior management need to raise their awareness of analytical CRM and
the potential benefits based on which to develop a vision focusing on gaining
customer knowledge and articulating the vision throughout the organisation, whilst
also being supportive to the development of such systems (Xu and Walton, 2005).
The biggest threat to CRM, as suggested by Bose (2002), is managements’ focus on
short-run profits rather than long-term vision. The organisational strategy, structure
and process may need to be transformed due to the application of analytical CRM
(Xu and Walton, 2005).

6 Conclusions

We have investigated CRM activities in e-banking of Iranian private and public banks.
Based on their organisational point of view, we proposed a framework of their CRM
activities in e-banking. Consisting of three phases: first, in the communicational CRM
which is the touch points of customer with bank, where the organisation recognises
230 A. Keramati et al.

unidentified consumers as customers who are identifiable by collecting the information

about them through diverse communication channels; second, an operational CRM,
where the organisation builds equitable relationships through serving the customers by
different services so that services can make the customer satisfied; finally, an analytical
CRM, in that the information and knowledge from the customers play the role of
expanding the company’s customer base through analysing the customer behaviour and
the way of customer’s interactions with the bank. Throughout the entire customer
lifecycle, a bank is expected to measure relationship value from both perspectives and
build a proper relationship positioning strategy.
After having checked the fluidity of the information, built a framework, recruited the
right people and implemented the relationships, it is crucial for any organisation to
continuously upgrade the data and its IT software, as well as to train people in making
efficient use of the precious information gathered. Once a proper strategy is chosen, in
order to collect and analyse the required customer information, it is necessary to build a
customer information system for managing the relationship which consists of a customer
database, a communication channel and an application for relationship management.
Through the framework of CRM activities in e-banking, banks should be able to manage
the entire customer relationship and use information through the cycle and make the
customers loyal for more profit for the entire organisation. It is therefore essential to
integrate information collected from all the distribution channels in a well-organised data
mart. However, it makes little sense to do so if all the parties involved are not part of the
evolution.
Although we have studied the CRM in a qualitative manner, the proposed theoretical
framework may need further validation quantitatively based on real-world CRM
implementation data. The concept of customer relationship activities in e-banking should
be refined with detailed criteria to be applicable to other industries. Evidence from these
private cases suggests that it is of major importance that the bank develops a relationship
with its clients from different touch points that are based upon the weakness of the
integrated and live customer’s account information in public banks because of their
information technology infrastructure perhaps these are one of the reasons that
seems why e-banking remains so popular. Only when such a relationship has been
achieved, private banks will be able to anticipate a client’s need without looking as
though they are desperate to cross-sell. In public banks, complementary services like
cards or ATM are important because it attracts customers otherwise it has lost the
competition to others.
Another challenge for the banks is to change some of its clients’ behaviour towards
the least expensive distribution channel, the internet. However, changing a behaviour
implies changing underlying attitudes, which is clearly not an easy task. The bank is
thus facing major challenges for the years to come. The CRM systems that have
been implemented by many companies are dominated by operational applications –
contact centres, sales and marketing solutions with limited customer knowledge
gained from the current CRM application. The analytical power of CRM has not
been adequately perceived by many organisations. The provision of analytical
CRM solutions is limited to some large organisations. It is suggested that CRM
systems should enhance not only an organisation’s ability to interact, attract and
build one-to-one relationships with customers but also the ability to gain customer
knowledge.
 Customer relationship management activities in e-banking 231

7 Further researches

Based on conclusions and a number of issues that rose during the research process, some
topics can be considered as future opportunities to be explored by interested researchers.
Due to the fact that cases of this research study some CRM activities in private and public
Iranian banks and how they made some core competencies for themselves. Further
investigation can be performed to explore how each of these banks’ CRM systems and
specifically their analytical CRM, operational CRM or communicational CRM can adopt
the best possible actions in each branch or the other touch points with a questionnaire and
survey and as its instrument and expend measuring the objectives.

8 Limitations

Due to the fact that CRM systems are relatively broad topic considering limited
timeframe for this study, it was impossible to cover thoroughly all the aspects of the
above-mentioned subject. Therefore, the topic was narrowed down to the current one in
the context of e-banking services.
This research was conducted on just four banks comprising two private banks and
two public banks. As mentioned above, due to limited access to the four banks on which
the current research was conducted, the interview time and number of people to interview
was difficult to arrange and gain access to.

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 Customer relationship management activities in e-banking 233

Appendix

Interview guide
• Name of the bank:
• Number of employees:
• Name of the respondent:
• The respondent’s position:
• The first year of deploying CRM:
1 What were the initial reasons to deploy CRM systems?
2 How does the CRM help you establishing long-term relationship with your
customers?
3 Can you provide some information about your CRM systems?
4 What is the role of data and database in your CRM system?
5 Regarding customer data and information: Do you collect:
6 Personal and transactional information; if yes, how; if no, why?
7 Product, service and organisational information; if yes, how; if no, why?
8 Non-transactional customer feedback information; if yes, how; if no, why?
9 How do you use the CRM? (E-commerce, e-service, self-service, multi-channel
customer management)
10 How do you reach your customers (CRM touch points)? (marketing, service,
advertising, sales, branches, telephone, e-commerce and m-commerce)
11 What applications do you use to analyse customers data? How do you manage
customer data which in non-technological (e.g., face-to-face interaction)?
12 How do you strategically categorise your customers?
13 High lifetime value customers.
14 Early adopters of new products.
15 Customer with new ideas who find ways to improve quality or reduce cost.
16 Customers with high volume of fixed costs which enable smaller customers to
become profitable.
17 How do you group your customers on the basis of historical records and other related
details (i.e., customer profitability, retention, satisfaction and loyalty)? How this
grouping improves bank’s performance?
234 A. Keramati et al.

18 In what other ways do you categorise your customers?

• Revenue side (e.g., usage intensity and behaviour)?
• Cost side (e.g., products purchased, channel used, and intensity of customer care
usage and service levels)?
19 Do you regularly monitor and analyse customers’ behaviours and characteristics
(i.e., customers’ details, historical records, demographics, preferences, life styles and
personal habits)?
20 How do you use analytical CRM to identify and prevent your defecting customers to
switch to competitors? What about your prospective customers?
21 How do you categorise your profitable customers? Do you consider relationship
volume (sum of customers’ yearly average deposit and loan balances) and
relationship profitability (relationship revenue minus relationship costs over a fiscal
year) in categorising your customers? If yes, how? How do you manage different
categories? How does this affect the bank’s goals?
22 How does the internet banking empowering your bank to target, reach and overall
retain core customers?
23 Do you provide those core customers with additional personalised services and extra
control over their interactions while you know they are ready to pay additional
charges for those services? If yes, how? If no, why?
24 Do you explicitly recognise customer acquisition; retention; development and cost
management in your marketing planning activity and use this to steer customer
management planning?
25 Can you determine the worth of INDIVIDUAL customers; combining sales margin;
sale and marketing cost; management cost; logistics and service, etc.?
26 Does the way in which customers and prospects are segmented in planning activity
match closely and usefully with the way in which the organisation actually does
business at customer interfaces?
27 Do formal contact strategies exist for each of your identified PROSPECT segments?
28 Is sufficient history of consistent customer transaction data available in a form which
allows detailed analysis?
29 Do you regularly measure the retention rates of each segment?
30 Do plan your customer development activity clearly understanding those customers
that you actively want to develop and those you positively do not want to or need to
develop?
31 Do key account plans exist for your highest value customers reflecting your
relationship/development objectives?
32 Do you understand what the main drivers of loyalty are for each of your customer
segments?
33 Does the organisational structure facilitate the smooth transition from the creation of
new customer strategies and approaches to their implementation?
 Customer relationship management activities in e-banking 235

34 Do you have a comprehensive and accessible customer information plan covering

information value; acquisition priorities; information management and usage?
35 Is the customer database accessible to all staff whose role involves significant
customer contact in a way that matches their needs?
36 Have you adopted a continuous improvement process for evolving your customer
management activity?
37 Do you recognise the potential length of lifetime of new customers as well as their
short term value when allocating marketing budget and priorities?
38 Do you have clearly communicated performance standards in place for enquiry
handling?
39 Do you have a prioritised structure for capturing important customer information
first which is supported by your customer management systems?
40 Do you apply formal key account management (KAM) principles for your most
important accounts?
41 Do you actively use the information that you collect on customers to achieve ever
improving management of them?
42 Do you have a no blame culture and appropriate targeting/reporting that encourages
staff to record all complaints as a positive means of improving customer service?
43 Do you have clear targets for resolution time of complaints?
44 Do you have a clear top level set of measures that define customer management
performance for your organisation in terms of the retention, efficiency, acquisition
and profitability (REAP) areas?
45 Do you have formal key performance indicators defined and used for all campaigns
so that they can be compared?
46 Do you understand the relative costs of servicing customers through the various
channels?
47 Do sales, service and marketing individuals have relevant customer management
measures defined in terms of acquisition retention and development (REAP)?
48 Does your customer research capture in-depth customer satisfaction information for
each of the key elements of your product/service proposition?