Customer services for individual customers at VCB thanh xuan branch

DECLARATION
I hereby declare that this thesis is my own work and effort and that it
has not been submitted anywhere for any award. Where other sources of
information have been used, they have been acknowledged.

Author

i


ACKNOWLEDGEMENT
This thesis would not have been possible without the support of many
people.
First of all, I would like to thank our respected supervisor – MA. Tran
Thu Hoai, a lecturer of English Department, Academy of Finance for her
immense support throughout my research. Without her continuous guidance
and support during my project support, my project would not be completed.
I also want to give my kind regards to the director and all staff of the
International Payment and Customer Services Department of Vietcombank
(VCB), Thanh Xuan branch for their kindness and help in my practicing time
at this bank.

ii


LIST OF ABBREVIATIONS
1.

ATM:

Automatic Teller Machine

2.

VCB:

Vietcombank

3.

POS:

Point of Sale

4.

HO:

Headquarter Office

iii


FIGURES AND TABLES
No.

Figures and tables

Figure 1.1 Relationship

between

service

Page no.
and

customer

9

Figure 2.1 Organization structure of VCB Thanh Xuan branch

19

satisfaction ( Spreng and Mackoy, 1996)

– Hanoi
Table 2.1

Retail business performance and growth rate of

25

VCB Thanh Xuan branch in 2011 and 2012
Table 2.2

The comparison of capital mobilization activity

26

from residential between VCB and VCB Thanh
Xuan branch in 2011 and 2012
Table 2.3

Retail capital mobilization by customer segment in

27

2011-2012
Table 2.4

Result of retail credit activities of VCB Thanh

28

Xuan branch in 2011-2012
Table 2.5

Customer evaluation of customer service quality of
the branch

iv

33


TABLE OF CONTENT
DECLARATION………………………………………………………..………...i
ACKNOWLEDGEMENT………………………………………………..………ii
LIST OF ABBREVIATIONS………………………………………………........iii

FIGURES AND TABLES………………………………………………...……...iv
INTRODUCTION.................................................................................................. 1
1. Rationale of the study......................................................................................... 1
2. Aims of the study ............................................................................................... 2
3. Scope of the study .............................................................................................. 2
4. Methods of the study .......................................................................................... 2
5. Organization of the study ................................................................................... 2
6. Significance ........................................................................................................ 3
CHAPTER 1........................................................................................................... 4
LITERATURE REVIEW....................................................................................... 4
1.1 Background knowledge of customer services ........................................... 4
1.1.1

Customers and customer services .................................................... 4

1.1.1.1 Customers ................................................................................... 4
1.1.1.2 Customer services ....................................................................... 5
1.1.2

Service quality and customer satisfaction ........................................ 6

1.1.2.1 Service quality ............................................................................ 6
1.1.2.2 Customer satisfaction .................................................................. 7
1.1.2.3 Relationship between service quality and customer satisfaction 8
1.1.2.4 Decisive factors on the service quality ....................................... 9
1.2 Roles of customer service ........................................................................ 10
1.3 Levels of customer service ...................................................................... 12
1.3.1

Level one – Meet customer expectations ....................................... 12

1.3.2

Level two: Exceed Customer Expectations ................................... 13

1.3.3

Level Three: Delight the Customers .............................................. 14


1.3.4

Level Four: Amaze your customers ............................................... 14

CHAPTER 2......................................................................................................... 16
CURRENT SUTUATION AND RESEARCH ................................................... 16
2.1 Overview of Vietcombank (VCB) ............................................................. 16
2.1.1 Fields of operation .............................................................................. 16
2.1.2 Human resources and network ............................................................ 17
2.1.3 Position of VCB in Vietnam banking industry of Vietnam ................ 17
2.2 Overview of VCB, Thanh Xuan branch .................................................... 18
2.2.1 Organization structure ......................................................................... 18
2.2.2

Main activities of VCB Thanh Xuan branch ................................. 20

2.2.3 Functions of International Payment and Customer Service
Department ................................................................................................... 20
2.2.4 Products and services for individual customers of VCB Thanh
Xuan branch ................................................................................................. 21

2.2.4.1 Personal loan products ................................................................ 21
2.2.4.2 Deposits – Savings products ....................................................... 22
2.2.4.3 Current account products ............................................................ 23
2.2.4.4 Fund transfer service ................................................................... 23
2.2.4.5 Other products and services ........................................................ 24
2.3 Current situation of customer service for individual customers at VCB
Thanh Xuan branch .......................................................................................... 24
2.3.1 Current situation of retail business activities ...................................... 24
2.3.1.1 Capital mobilization activity from residential ............................ 25
2.3.1.2 Credit activity .............................................................................. 27
2.3.2 Current situation of customer service for individual customers at
VCB Thanh Xuan branch ............................................................................. 30
2.3.2.1 Mechanisms and policies for retail activities .............................. 30
2.3.2.2 Human resources ......................................................................... 30


2.3.2.3 Customer services for individual customers ............................... 31
2.4 A research on the customer services for individual customers at VCB
Thanh Xuan branch .......................................................................................... 32
2.5 Shortcomings of customer services for individual customers at VCB
Thanh Xuan branch .......................................................................................... 34
2.5.1 Shortcomings....................................................................................... 34
2.5.2 Reasons ............................................................................................... 35
CHAPTER 3......................................................................................................... 37
RECOMMENDATION TO IMPROVE CUSTOMER SERVICES FOR
INDIVIDUAL CUSTOMERS AT VCB THANH XUAN BRANCH ................ 37
3.1 VCB's oriented strategy in 2011-2015 and vision to 2020 ........................ 37
3.2 Recommendations to improve customer service for individual
customers at VCB Thanh Xuan branch ........................................................... 40
3.2.1 Recommendation to VCB Thanh Xuan branch .................................. 40

3.2.1.1 Improving the service quality ................................................... 40
3.2.1.2 Improving the qualification of the staff ...................................... 42
3.2.1.3 Ensuring the competitiveness of the price .................................. 43
3.2.1.4 Creating a professional working environment ............................ 44
3.2.1.5 Improving the good image of the bank in the customers ............ 44
3.2.2 Some recommendations to VCB Headquarter Office......................... 45
3.2.2.1 Strongly developing the service and exploit differential
advantage products and services ........................................................... 45
3.2.2.2 Developing the network .............................................................. 45
3.2.2.3 Developing the human resources ................................................ 46
3.2.2.4 Improving the work of management ........................................... 46
CONCLUSION .................................................................................................... 47
REFERENCES .......................................................................................................v
APPENDIX


INTRODUCTION
1. Rationale of the study
Vietnam is switching to market economy socialist oriented, and
especially after being an official member of WTO, it has been known
as fast developing country in Asia. The field of monetary, credit and
banking industry plays an important role in stimulating the economy of
our country. Activities of commercial banks help to regulate, attract
and provide capital and banking service for the development of the
country.
The development of banking service is an inevitable trend in the
process of integration of the commercial banking system in Vietnam.
To survive and develop in this competitive market, it is required that
beside investing in technological innovation, improving management
practices and modernizing payment systems, commercial banks have to

pay special attention to customer services. The provision of high
quality and beneficial services to customers is the fundamental to
strengthen the relationship between banks and customers. It is one of
the most important factors to determine the profitability, risk
diversification, position, prestige and the success of banks. Therefore,
constantly improving, expanding the quality of service is always the
top concern of most commercial banks.
It is obvious that Vietcombank (VCB) is a big commercial bank
in Vietnam. Previously, the main activity of the bank is foreign trade.
Nowadays, it becomes a multifunctional bank, providing customers
with many financial services such as credit, capital mobilization,
capital business, etc. It also orients to develop individual customers in
order to become the most developed retail bank in Vietnam. So, my
1


research here is an investigation to “Customer services for individual
customers at VCB Thanh Xuan branch”. I wish this study would
provide effective suggestions for VCB Thanh Xuan branch to improve
customer services.
2. Aims of the study
As mentioned above, this study will provide knowledge about
customer services in bank’s daily running activities, focus on analyzing
the current situation at VCB Thanh Xuan branch, and suggest some
recommendations to improve customer services for individual
customers in this bank.
3. Scope of the study
The scope of this study is limited in VCB Thanh Xuan branch,
448 Nguyen Trai, Hanoi. Moreover, the research focuses on analyzing
the current situation and improving customer services for individual

customers at International Payment and Customer Service department
in this branch.
4. Methods of the study
The data methods are used to collect and analyze the information
about customer service theory and the current situation at VCB, Thanh
Xuan branch. The data used in this study are mainly secondary data:
data from the directors and staff of VCB, Thanh Xuan branch, from
internet and books.
5. Organization of the study
Beside introduction and conclusion, my thesis consists of three main
chapters as follow:

2


The first part: the introduction dealing with the rationale, aims, scope,
methods, organization and significance of the study
The second part: is the main part of the paper with 3 chapters
Chapter 1: Literature review. This chapter gives the definition of
customer services and its roles in the developments of the corporation.
Chapter 2: Current situation of customer services at VCB, Thanh Xuan
branch
Chapter 3: Recommendations to improve customer services for
individual customers.
The last part: the conclusion
6. Significance
It is hoped that this study, to some extent, will be a useful reference
material for the staff, especially for the manager of VCB to improve
customer services.

3


CHAPTER 1
LITERATURE REVIEW
1.1 Background knowledge of customer services
1.1.1 Customers and customer services
1.1.1.1

Customers

Customers are the most important factor for any businesses. They are
the resources on which the success or failure of the business depends. They
use the products or services of the company and judge the quality of those
products or services.
There are many different definitions of customers. But, in general,
customers can be defined as parties that receive or consume products (goods
or services) and has the ability to choose between different products and
supplier.
It is important for an organization to retain customers or make new
customers and flourish business. To manage customers, organizations should
follow some sort of approaches like segmentation or division of customers
into groups because each customer has to be considered valuable and
profitable. Customers can be divided into 5 main types:
Loyal customers
These customers revisit the organization over times hence, it is crucial
to interact, keep in touch with them on a regular basis, invest much time and
effort with them. Loyal customers want individual attention and that demands
polite and respectful responses from their suppliers.

4


Discount customers
They shop frequently, but make their decisions based on the size of the
organizations’ mark downs. The more the discount is, the more they tend
towards buying. Focusing on this type of customers is also important as they
also promote distinguished part of profit into business.
Impulse customers
They do not have to buy a particular item at the top of their “To Do”
list, but come into the store on a whimsy. They will purchase what seems to
be good at the time. If impulse customers are treated well then there is high
profitability that these customers could be responsible for high percentage of
selling.
Need-based customers
They have a specific intention to buy a particular type of item. These
are frequent customers but do not become a part of buying most of the time so
it is difficult to satisfy them.
Wandering customers
They have no specific need or desire in mind when they come into the
store. These customers are normally new in the industry and most of the times
they visit suppliers only for confirming their needs on products.
1.1.1.2

Customer services

Customer service is often seen as an activity, performance
measurement and a philosophy. It is difficult to define an exact concept of
customer service. That is why “customer service” has been defined by many
scholars and conveys different meanings. Geogre D. Wagenheim, Michigan

5


State University and John H.Reurink, Michigan Department of Commerce,
(1991) Public Administration Review, considered customer service as
“Customer service is a management strategy that focuses on meeting
customer expectations”.
According to Turban Efraim (2002) Electronic Commerce: A
Managerial Perspective, Prentice Hall, customer service is “a series of
activities designed to enhance the level of customer satisfaction – that is, the
feeling that a product or service has met the customer expectation”.
Moreover, “Customer service is the provision of service to customers
before, during and after a purchase”. (Wikipedia.org)
In banking industry, any person or business using any or all of the
services offered by a bank is a customer of the bank. Customer service is one
of the most important ways to keep customers coming back. It includes
responding to customers’ questions and complaints in a thorough and timely
manner and interacting with customers through face-to-face meetings,
telephone, mail, fax and email. Most, if not all, bank employees are involved
in some aspects of customer service.
1.1.2 Service quality and customer satisfaction
1.1.2.1

Service quality

Service quality involves a comparison of expectations with
performance. According to Lewis and Booms (1983), service quality is a
measure of how well a delivered service matches the customers’ expectations.
Parasuraman and Berry (1985) viewed quality as “the degree and direction

of discrepancy between customers’ service perception and expectations”.

6


Generally, the customer is requesting a service at the service interface
where the service encounter is being realized, and then the service is being
provided by the provider and at the same time delivered to or consumed by
the customer. The main reason to focus on quality is to meet customers’ needs
while remaining economically competitive at the same time. This means that
satisfying customers’ needs is very important for the enterprises to survive.
1.1.2.2

Customer satisfaction

In recent years, most of enterprises have understood the importance of
customer satisfaction. First, it is necessary to define what customer
satisfaction is.
According to Richard L. Oliver – “Satisfaction is a customer’s
fulfillment response. It is a judgment that a product or service feature, or the
product or service itself, provides a pleasurable level of consumption related
fulfillment”. While Philip Kotler claims that– “Satisfaction is a person’s
feeling of pleasure or disappointment resulting from comparing a product’s
perceived performance (or outcome) in relation to his experience”.
In Customer Satisfaction: the Customer Experience through the
Customer’s eyes, customer satisfaction is defined as “customer satisfaction,
or dissatisfaction, is the feeling of a customer has about the extent to which
their experiences with an organization have met their needs”. It can be
understood that satisfaction is a function of perceived performance and
expectations. If the performance falls short of expectation, the customer is

dissatisfied. If the performance matches the expectations, the customer is
satisfied. And if the performance exceeds expectations, the customer is
delighted.

7


In today’s competitive environment, every business is trying to attract
the customers by assuring highest degree of satisfaction. Satisfied customers
are the main determinants of success or failure of an organization’s business.
1.1.2.3

Relationship between service quality and customer satisfaction

“Service quality is the most important factor which impacts to
customer satisfaction”. (Cronin and Taylor, 1992; Yavas et al, 1997; Ahmad
and Kamal, 2002). If the service provider gives customers the high quality
products to satisfy their demands, the enterprise initially makes customer
satisfaction.
Therefore, to improve customer satisfaction, service providers have to
improve service quality. In other words, service quality and customer
satisfaction are closely correlated with each other (positive relationship), in
which service quality is what is created first and then decide to the
satisfaction of customers. In the study of the relationship between these two
factors, Spreng and Mackoy (1996) also showed that service quality is the
premise of customer satisfaction.

8

Figure 1.1: Relationship between service and customer satisfaction
(Spreng and Mackoy, 1996)
Quality
expectation
nnnnnnnnn
n

Needs

Service

being met

quality

Needs not

Customer

being met

satisfaction

Perceived
quality

Quality
expectation
nn

1.1.2.4

Decisive factors on the service quality

Actually, service quality is measured by many factors. Accurate
identification of these factors depends on the nature of the service and the
research environment.
Many authors have researched this problem but the most popular study
is the criteria for evaluating service quality of Parasuraman et al. In 1985,
Parasuraman et al gave ten determinants of service quality. They are: access,
communication, competence, courtesy, credibility, reliability, responsiveness,
security, tangibles and understanding the customer. Then in 1988, he
generalized into 5 factors: reliability, responsiveness, tangibles, assurance and
empathy.

9


Based on the research on service quality and inherited the theory of
Parasuraman et al, Johnston and Silvestro (1990) also summarized five factors
of service quality include: helpfulness, care, commitment, functionality and
integrity. Also in 1990, Gronroos had carried out a research and gave six
factors that measure the quality of service as follow: professionalism and
skills, attitudes and behavior, accessibility and flexibility, reliability and
trustworthiness, reputation and credibility, and recovery.
In 2001, Sureshchandar et al also gave five factors affecting the quality
of services including: core service, human element, non-human element,
tangibles and social responsibility.
1.2 Roles of customer service
Your customers are the reason why you are in business. Without

customers you really cannot have a business. Thus, if you do not have enough
customers, you will always try to attract more. That is why customer service
plays an important role in business activities nowadays. It can literally make
or break you.
Customers today are interested in not only the product they are being
offered but also all the additional elements of service that they receive from
the greeting and promising. Customer service refers to all aspects of
interaction with a customer and the organization’s image in the mind of a
customer. Beside product or service quality, customer service also makes your
customers satisfied or dissatisfied and affects to their decision of coming back
or not. Keeping your customers happy is the key to keep your customers with
you. Therefore, high quality customer service helps to create customer
loyalty. Repeat customers are the source of all profit, and profit allows a
business to grow.

10


Moreover, a customer is an organization’s most valuable advertising
tool. He or she will offer your business an advertising tool that is beyond
words – word of mouth advertising. A word of mouth testimonial from a
friend can be trusted, and it is more likely to produce higher results than other
advertising tools. Magazine, television, radio and Internet ads can be
expensive, but word of mouth advertising is usually free. The less money the
business has to spend on advertising, the more profit they can make. Anytime
someone hears about a company and what they buy from a friend or from a
news story, word of mouth advertising is helping the company become more
familiar with people. Especially, with any internet business transactions,
product reviews are quite common. Whether it is positive or negative
feedback about a product and service, people are writing freely about their

shopping experiences. Good customer service will bring the good image of
your company to the customers through word of mouth advertising and vice
versa. Therefore, every enterprise has to understand this point to create a good
customer service plan.
Customer service also acts as a morale booster for staff. It is not just
customers who benefit from good customer service. Staff, too, will be more
motivated to work for a professional company which prides itself on excellent
customer service. It will give them a much deeper sense of job satisfaction.
They can come home from work each day and know that they have helped
customers and have been able to resolve issues satisfactorily so that customers
will continue to shop with them.
Good customer service is the foundation of any business. It leads to
many benefits, provides a platform for continued growth and helps to build
your business reputation. Not only will you gain trust with your current
clients, they’ll also become a wonderful referral system as they spread the
11


word about your business to other prospects. Excellent customer service also
makes your competitive advantage, sets you aside from your competitors even
when they may sell the same products. In the long run, treating people fairly
and with respect will bring success to your company today and in the future.
1.3 Levels of customer service
Customer satisfaction is the key to building the clientele of any
business. The more you satisfy your customers, the more your business can
grow. According to Brian Tracy, one of America’s leading authorities on the
development of the human potential, customer service can be identified to
four levels which are achieved by providing corresponding levels of customer
service. The higher the level you achieve, the more customer loyalty you will
build and the greater your success will be.

1.3.1 Level one – Meet customer expectations
At level one, a business meets its customers’ expectations. This is the
minimum requirement to simply stay in business in order to survive. At this
level, your customers have no complaints about your products or services.
They are satisfied for the moment. But they are not loyal. If a competitor
demonstrates that it can and will do more than merely meet their expectations,
your customers will very quickly not use your products or service anymore.
They will become your ex-customers.
Moreover, finding another company sell the similar products with a
good customer service is not difficult in the current competitive environment.
If someone comes into your store expecting to purchase something, you must
provide the staff and expertise to help assist in the purchase in a reasonable
amount of time, or the customer will get frustrated and leave. If you fail to
meet their expectations, perhaps only one time, they will leave and find

12


someone else who will promise to offer them a better service. Knowing what
the customer expects is the first and possibly most critical step in delivering
good quality service. Being wrong about what customers want can mean
losing a customer’s business when another company hits the target exactly.
Being wrong can also mean expending money, time and other resources on
things that do not count to the customers. Being wrong can even mean not
surviving in a fiercely competitive market. Therefore, at this level, customers
easily come to your company but they also easily go.
1.3.2 Level two: Exceed Customer Expectations
The higher level of customer satisfaction is exceeding customer
expectations. That means surprising your customers, going beyond what they
expected. Fast, friendly service, followed up by a phone call to make sure

everything is alright, might you put into this category. Once your customers
understand your company’s customer service standards, they’ll judge your
performance based on those standards. When you exceed those standards,
they will understand that your company has gone above and beyond its
standard practices.
Good customer service can set your company aside from competitors.
This level is where you start to build customer loyalty. When service happens
faster than expected, or is better than expected, customers leave your store
pleased and are much more likely to return. They may even be willing to pay
a little bit higher prices. The second level of customer service moves you
beyond survival, building a measure of customer loyalty and giving you an
edge over your competitors. It can also increase your profitability. Customers
who experience the kind of service that exceeds their expectations are often

13


willing to pay for it, enabling the supplier to raise prices and thus improve
profit margins.
1.3.3 Level Three: Delight the Customers
This level is where you show customers that you really care about
them. Putting you in touch with the spirit of what the clients want to
accomplish is the key of the value and principle of “customer delight”.
Customers who are served at this level are truly delighted. Not only
have the customers’ basic needs been met, or even exceeded, but also they
have truly been touched on an emotional level. And once customers have
enjoyed this experience, it will be very difficult for a competitor to attract
them. When you delight your customers, you are on the way to create an
exceptional and highly profitable business. The most successful businesses
have discovered a formula that goes beyond products and services. Their

business is providing delight to their customers by understanding their
specific personal interests, anticipating their needs, exceeding their
expectations, and making every moment and aspect of the relationship a
pleasant.
To delight your customers is to show that how you care about them. It
will bring a smile to their face. The greater your services delights your
customers, the greater success you will enjoy in your business.
1.3.4 Level Four: Amaze your customers
“Amaze your customers” is the fourth level of customer service. It is
what will push your business into an expert level. Expending the effort to
amaze customers can propel your business to new heights. By amazing them,
you give customers a compelling reason to patronize your business and
recommend it to their friends. It requires you, not just to meet or exceed your
14


customers’ expectations, not to simply delight them, but to truly amaze them.
The highest level of customer service is when you develop the habit of
amazing your customers: when you do something for them that is so
extraordinary, they want to run around and tell everybody they know. When
you are able to accomplish this on a regular basis, you will be in a position to
dominate the marketplace and achieve remarkable rates of revenue growth
and profitability.
In conclusion, chapter 1 gives a basic knowledge of customer service,
including the knowledge of customer, customer service, service quality, and
customer satisfaction, the role of customer service and levels of customer
service. This chapter is the premise to analyze deeply about the current
situation of customer service in the following chapter.

15

CHAPTER 2
CURRENT SUTUATION AND RESEARCH
2.1 Overview of Vietcombank (VCB)
Bank for Foreign Trade of Vietnam was founded and officially went
into operation on 01/04/01963, the former organization is known as Foreign
Trade Bureau (under the State Bank of Vietnam). As the first commercial
bank chosen to pilot equitization by the Government, Bank for Foreign Trade
of Vietnam has been operating as a joint-stock commercial bank on
02/06/2008 after successful equitization plan through issuing shares to the
public for the first time.
2.1.1 Fields of operation
Business operation of VCB includes the following areas:
Bank: VCB functions as a leading experienced bank of finance
services, brokerage, loan syndication and advisory, modern, convenient
banking products.
Insurance: VCB provides products for non-life insurance designed to
match the overall package to customers of VCB
Stock: VCB provides a wide range of brokerage services, investment
and investment consultant with the ability of quickly developing a system of
agents to receive orders nationwide.
Financial investment: VCB includes financial leasing, security trading
and capital contribution with the aim at establishing investment companies to
the projects. It has 3 subsidiaries: Vietcombank leasing, Vietcombank fund
management and Vietcombank Stock.

16

2.1.2 Human resources and network
After nearly 50 years of operation and development, with 13,560
officers, employees and financial consultants who are well-qualified and welltrained with full experience and have been accumulated and transferred for
over half of a century, VCB always brings its customers the benefits and
reliability.
Up to the time of 30/09/2012, VCB has a network as follows:
Banking Networks: VCB has nearly 400 branches, transaction offices,
representative offices, including the Head Office in Hanoi, 1 Exchange office,
1 Training center, 78 branches and over 300 transaction offices nationwide. In
addition,

Vietcombank

has

developed

an

Autobank

system

with

approximately 1,835 ATMs and 32,178 POS in 63 provinces and cities
nationwide.
Non-banking Networks: consists of Vietcombank Leasing (VCB
Leasing), Vietcombank Fund Management (VCBF) and Vietcombank Stock
(VCBS).

2.1.3 Position of VCB in Vietnam banking industry of Vietnam
Establishing in 1963, VCB has a long operation history and a pioneer
role in the market with a high competitive effort. In the period 2006-2010,
VCB hold the 3rd place in market share of credit and capital mobilization with
the growth rate on average 23-24% per year, 3rd place in the size of equity and
had a total value of assets ranking 3rd place in the banking industry in 2010,
after VBARD and Vietinbank. About business performance, profit before tax
in 2010 ranked no.2 in this sector and had the average increase of 43% per
year.

17


2.2 Overview of VCB, Thanh Xuan branch
2.2.1 Organization structure
VCB Thanh Xuan branch has 25 units, over 350 officers and
employees. The organization structure of the branch is arranged under the
TA2 model including: directors and blocks, departments. The blocks include
customer relations block, risk management block operation block, internal
management block and blocks directly under.
The figure below shows the organization structure of VCB Thanh Xuan
branch:

18