Banking on and Profiting from Customer Relationship Management: The Financial Services Industry Needs to Take a Much More Holistic Approach to Customer Relationship Management and Needs to Do So Quickly. (CRM)
Thompson, John, Journal of Banking and Financial Services
"Financial services--and particularly banking--is going to be one of the biggest sectors in Customer Relationship Management (CRM) over the next few years."
So says the UK-based analysts, the Hewson Consulting Group. But the comments aren't just a pat on the back for an industry that has been an early adopter of CRM strategies.
It is timely recognition that financial services companies must develop high-yielding customer strategies if they wish to be leading players in the marketplace. The CRM techniques must be able to be modified quickly and dynamically to meet changes in customer behaviour and lifestyle patterns.
Through CRM, financial services companies can plan, predict customer behaviour, adapt campaigns, execute strategies and better measure return on marketing investments.
CRM also helps to improve profit performance, deliver superior customer service, lower operating costs, improve customer retention, reduce time to market new products and manage channel conflict.
Given the high cost of acquiring customers--whether through mergers or organic growth--retaining existing customers has become a vital priority for any bank. As a result, management must be able to understand what individual customers have done, what they are doing now and what they will do in future.
Customers today expect to do business on their own terms --when, where and how they please. Alienating the customer in this regard means risking losing their business. They also want single view access to their accounts, be it via one phone call or website visit.
At the same time, banks and financial service providers operate in an intensely competitive environment and need to access and service markets in the most productive way.
In the face of these challenges, the financial services industry needs to adopt a much more holistic approach to CRM, rather than an ad hoc approach of implementing bits and pieces here and there.
While CRM isn't about technology, communications changes are driving future CRM development. For instance, many financial services providers look to the internet for low cost delivery, but GPRS (General Packet Radio Service) and 3G wireless technology already look to be driving a new wave of development.
Sector-specific CRM products enable financial services organisations to identify additional sales, such as cross-selling or upselling opportunities. If a customer applies for a personal loan for a car, for instance, CRM should trigger an opportunity to offer car insurance.
Cross-selling is vital to customer retention. …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Banking on and Profiting from Customer Relationship Management: The Financial Services Industry Needs to Take a Much More Holistic Approach to Customer Relationship Management and Needs to Do So Quickly. (CRM). Contributors: Thompson, John - Author. Magazine title: Journal of Banking and Financial Services. Volume: 116. Issue: 3 Publication date: June 2002. Page number: 23+. © Not available. COPYRIGHT 2002 Gale Group.