Academic journal article ABA Banking Journal

Rethinking CRM to Make It Pay

Academic journal article ABA Banking Journal

Rethinking CRM to Make It Pay

Article excerpt

Eager to reach out, inspire loyalty, and become more relevant to clients, many financial institutions became gung-ho on customer relationship management, taking on overly big projects and getting budget strain as a nasty side effect. A decade into the grand experiment with CRM, some are projects are still limping around.

But the news doesn't have to be all bad. Bankers can learn from past mistakes and turn those faulty projects around, argued Paul S. Barth, PhD, managing partner of the advisory firm NewVantage Partners, Boston. Barth provided the following suggestions for institutions embarking on CRM initiatives for the first, second (or third) time at BAI's Retail Delivery conference.

Customer viewpoint. CRM is not only a category of technology but a business strategy. It's about how you want to treat your customers, what you want them to believe about you (in terms of brand identification), and what you want their experience to be Like to the extent you can control it. Conduct business process with the customers' point of view in mind. Ask yourself, "What will my customer think?" rather than "How much can I save?"

Project scope equals strategy. Get specific. If your business strategy is to reduce customer wait times, create a CRM project to meet that goal. Complete a project with discrete objectives, and then move onto the next project similarly designed. Keeping the projects small and manageable eliminates creeping project scope and unnecessary spending.

Resistance is futile. Because it is, by definition, customer oriented, CRM fundamentally shifts the focus of your business strategy (or it will if you do what you are supposed to do) and is typically highly disruptive for your staff in that it changes business processes. This disruption--and not technology--will be your biggest barrier to success.

For example, you may put CRM in your call center, but if your branch bankers don't adapt by collecting the data and following up on Leads, you won't achieve the results you are after. To change behaviors, motivate employees. Since CRM's value is its ability to coordinate across business units, get executive buy-in to cut across political boundaries.

Advertise your wins. There is often a lot of hoopla around the beginning of a CRM initiative, but not much energy spent on measuring and promoting results throughout the organization on an ongoing basis. Stay focused during the mundane times; measure CRM against the business strategy; and promote the results at every meeting. …

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