Working Title: A Critical Appraisal of CRM Strategies Addressing Customer Retention Issues in the Santander Bank


Since 2004, Santander Group, which made series of acquisition in UK, enables itself successfully came into UK banking market and made huge expansion on market share. In this paper, the importance or significance of this research will be answered in justification section. Literature review on CRM strategies will be then demonstrated. Different research methods will be planed to collect information, and limitations on collecting data as well are displayed then.



Justification and Context


In current financial market, most of companies treat customer relationship management essential for their business success. CRM has been defined as `a management approach that enables organizations to identify, attract and increase retention of profitable customers by managing relationships with them’ (Hobby, 1999, p. 28). This is of great importance in the financial service industry where there is particularly strong evidence that an increase in customer retention is linked to greater profitability (Reichheld, 1996).  Research on Santander bank will provide valuable information about what the performance of implementing CRM strategy of the new player in UK bank market. Meanwhile, the research outcome will help Santander bank better applying CRM strategy addressing customer retention issue.


There are three themes will be displayed. The first one is information technology and data management strategy. Specifically, current financial companies universally apply IT including hardware and software to collect customer information, analyze customer information, segment customer and keep lifetime relationship with customers. The second one is muti-channel integration strategy. Financial companies, especially banks build different channels to access customer, understand customer, service customer and retain customer. The third one is problems identification and customer complaint management strategy.


Research Objective and Research Aims


With the market change and development of bank itself, the bank may adjust their current strategies to fit with new business environment. This research objective is to analyze what current problems in Santander bank, to study current theories and practices evident in CRM and to build enhanced CRM strategy to recommend to the bank. To achieve this the following research aims have been identified. The first one is to identify the development of banking service and current problems in the Santander bank. The second one is to appraise CRM literature. Specifically, faced with current problems in the bank, the bank necessarily finds out good CRM literature to guide company. The third one is to discover current good CRM practice evident in the bank sector. Good CRM practice in other banks is a good reference for the bank to effectively and efficiently implement this theoretic solution. The fourth one is to create an enhanced CRM strategy. Under the basis of selective good CRM literature and successful CRM practice, the bank can take more effective CRM strategy to improve itself.


Literature Review and key Themes


Information technology and Customer data Management

CRM is about identifying a company’s best customers and maximizing the value from them by satisfying and retaining them (Credit Card Management, 1998). The achievement of maximizing customer value and retaining them should be based on IT and data management. Kotler(1990) has argued that marketers should build and use customer databases in order to keep track of what customer are buying and what they are interested in, thereby using this information to serve customer better. In the meanwhile, data collection and data analysis is based on development of information technology. The use of IT enables the necessary data to be collected in order to determine the economics of customer acquisition, customer retention and lifetime value. (Lynette,R and Adrian,P 2001). Actually, a great number of customer data will be recorded into PC and data analysis conducted by software.

CRM seeks to provide a strategic bridge between IT and marketing strategies aimed at building long-term relationships and profitability. This requires “information-intensive strategies”(Glazer,1997) which contain information about and from customers and which we term ” information-enabled relationship marketing”. Information-enable relationship marketing means that financial companies build and keep relationship with customers by information collection and analysis. At the same time, long-term relationship with customer provides more opportunities with maximizing customer value and profitability.


Muti-channel integration


CRM builds on the philosophy of relationship marketing. This emphasis on relationships, as opposed to transactions in redefining how companies are interacting with their customers (Gummesson, 1999; Kotler,1990; Sheth & Parvatiyar,2000). Nowadays, organization actively moves to electronic channel faced with costs pressure. Technology development enables financial companies to access and service customers in different channels. There are six main channels categories (Payne& Frow, 2004) including sales force (including field account management, service and personal representation, outlets (including retail branches, stores) telephony (including traditional telephone, telex and call center contact) direct marketing (direct mail, traditional TV), e-commerce (including email, the internet), m-commerce (including mobile telephony, SMS, text messaging and 3G mobile service)


An effective channel management strategy requires that all channel-the call center, direct mail, branch, head office, internet and interactive TV-to be fully integrated. Channel integration is concerned with providing a common, consolidated and real time view of the customer across all channels. (Joe,P,2000) The seamless connection among different channels enables customers to do different transaction service according to different needs. Customer retention, to great extent, depends on whether customer needs would be satisfied by providing different channel.

Organizations are now finding that to build stronger relationship with final customers, they need to change the emphasis and expenditure at different channel level, or alternatively refocus the existing expenditure in ways, that build deeper and more sustained relationship (McDonald& Wilson, 2001). Muti-channel provides more opportunities for customers and financial companies to interact with each other. Specifically, for companies, they have more than one channel to know customer, understand customer need and satisfy customers. And for customers, they have more options to choose in order to make it convenient and efficient. For example, customer may apply for a traveller’s cheque in the branch in the morning, transfer money to others online in the afternoon and check bank statement on mobile phone in the evening. The process of interaction is the process of building long-term relationship.

The muti-channel integration process involves decision about the best combination of channels’ how to ensure the customer experience highly positive interactions within those channels’ and, where customer interact with multiple channel, how to create and present a ‘ single view’ of the customers. The large number of channels creates many opportunities for improving customer relationship.(Adrian,P and Pennie, F). One of objective of bank is to achieve the same and good satisfaction from different channels. The same and good satisfaction indicates that the seamless interaction works in different channel.


Problem Identification and Customer Complaint Management


Complaining from dissatisfied consumers is considered as an indispensable tool to learn the Voice of the Customer and becomes increasingly important in many business contexts (Crask et al, 1995). Complaints from customers, to great extent, are more essential than good comments for companies. Complaints are good advice and recommendations for company’s improvement. An effective CRM system should have numerous mechanisms for identifying customer problems. (William,G Raymond,M 2003). The task of identifying customer problems makes company keep close to customer and take good attitude to help customers address problems.

Many companies aims at minimize complaints (ARP,1986), while Fornell(2007) strongly suggests that firm should encourage dissatisfied customer to complain to extract more information from customers. Complaints should not be viewed as a source of customer feedback and but an opportunity to identify how to improve performance. There is no conflict between minimizing complaints and encouraging customer’s complaint. Specifically, the company can make improvement on customer service, and then the better service will decrease complaints case and increase customer loyalty and customer retention.

A poor-managed response to complaints can lead to a lost customer and a worst, costly litigation, whilst a well- managed resolution can generate great customer loyalty (Information Management Group,2010) The well-managed customer complaint resolution will be embed into this research to improve customer satisfaction and customer retention.



Research Methodology


There is a wide range of methodologies and methods for collecting and analyzing your research data.  In this research, CRM theories and strategies will be analyzed and taken to address customer retention issue. In the section of collecting and analyzing CRM theories and strategies, secondary research will be demonstrated. Specifically, Different authors in different books and journals highlight the importance of CRM strategies, and point out the relationship between CRM strategies and customer retention issue. Therefore, resources including books and journals about CRM theory will be borrowed from library. These CRM theories help us to make a framework of relationship between CRM strategies and customer retention.

One of objective of our research is to evaluate current strategies and problems on customer retention in the Santander bank. Therefore, the quantitative and qualitative methods will be used to collect data. In quantitative research, findings are arrived at statistical methods or other procedures of quantification. For quantitative method, the amount of customer complaints case in last 6 months will be collected from FSA. The quantitative data will provide a clear truth what current performance of customer satisfaction for bank.

However, most of research focuses on qualitative methods. The reason is that it is hard to quantify the CRM strategies in a bank and performance on customer retention. Therefore, qualitative method will be mainly used.  For qualitative method, some articles or news may point out what current problems in the banks and how can they address these problems. These articles are treated as importance secondary data that can be collected. Meanwhile, email interview and telephone interview will be used to collect first-hand information.  Qualitative data from interview on bank manager or employee can deeply reflect what current problems in the bank.

The interview will be designed as follows:

IT and information Management

Is IT and customer information important for the bank?

What IT hardware and software they use to make banking service more efficient?

Do they segment customer by collecting customer information?

What do they think of relation between IT and information?


How many channels in the bank to access their customers?

Which channel does customer often use?

What relation among these different channels?

Do they think there is a channel conflict and how to address it?


Problems identification and customer complaint management

How can they identify existing or potential problems?

Does the bank encourage customers telling them of bank problems?

What do they think of customer complaints? Is it good or bad for bank?

How can they manage customer complaints?


One of research aim is to discover current good CRM practice in the bank sector. That is to say, the comparison between the performances of CRM strategies on customer retention will be made to identify better CRM practice. Cross-sectional studies will be used in this research. Cross-sectional studies are designed to obtain research data in different contexts, but over the same period of time. For example, the research would investigate on similarities and differences between different banks in the bank sector. Therefore, the cross-sectional studies will help us find out better performance on CRM strategies practice. Specifically, previous research outcome on other banks can be considered as a good reference. Secondary data that is relevant to other bank will be collected. Data and research outcome will help us find good CRM practice in the bank sector.


Limitation on research method


There are some limitations in this research.

Firstly, CRM theory is not up-to-date. Specifically, we often find out that some CRM theories may be published in the 1990s. From 1900 to 2000, the market and bank itself might change a lot. Old theories are not totally suitable for current market environment and bank itself. Meanwhile, lots of literatures may be collected from journals. Sometimes, we find out that findings or theories may be from one author, which may make viewpoint lacking diversified evidence. Meanwhile, some secondary data may be difficult to access and costly and the quality of secondary data is not guaranteed, especially for online resources.

Secondly, in the qualitative method, it is hard to have chance to make face-to-face interview. Therefore, telephone and e-mail interview will be broadly used in this research. However, the performance of interview, to great extent, depends on the technique and experience of interviewee. Meanwhile, whether the answer from bank employee and manager truly reflect the reality of the bank is hard to evaluate. At the same time, it is hard to get more quantitative data on customer satisfaction.

Thirdly, cross-sectional study will be used. The difficulty is that criterion on good CRM practice is not clear. Meanwhile, it is impossible to clearly understand CRM practice on every UK banks. Therefore, evidence on good CRM practice may be collected from other academic journals and books.

Fourthly, time management is an important element to complete a good dissertation. For this research, it will take 4 months to make it. In these 4 months, Time on dissertation work and other academic learning would be hardly allocated well, which may affect efficiency of research and the quality of dissertation.  The timescale for dissertation is planned in the appendix 1



In this research proposal, the plan and framework of the dissertation is conducted. The research objective and research aims are identified in this proposal, which provides a direction of following dissertation. Three key themes and useful CRM literatures are introduced, which will be analyzed and detailed to address specific issues. Research methodology including quantitative, qualitative research and cross-sectional study  will be operated in next few months.