Real-Time Customer Data ...That's Useful for Retention

By Dver, Alyssa | ABA Bank Marketing, March 2001 | Go to article overview

Real-Time Customer Data ...That's Useful for Retention


Dver, Alyssa, ABA Bank Marketing


Remember the good old days of banking? If you're a community banker, that refers to the time when all you needed to do to keep the customers coming back was to run a promotional campaign every once in a while. Today, big-bank competitors have created warehouses full of customer information that they are using to lure away your customers through sophisticated marketing initiatives.

What's the little guy to do? The altered financial services marketplace has created a need for small- to mid-sized banks to obtain access to the same kind of customer information that the big guys use. In some cases, this need is a matter of survival.

One answer is for community banks to introduce customer relationship management (CRM) technology. Small banks can now obtain this new technology that enables instantaneous information updates about customers--in other words, the data never grows stale.

Customer relationship management (CRM), a $2.1 billion market in 1999, is expected to grow at an annual rate of 47 percent in the years ahead. A recent study by The Economist Intelligence Unit found that many senior executives are shifting their priorities to customer relationships. This change will require improved information, including access to external databases.

Financial services institutions are finding that, to succeed in today's marketplace, they must he able to better plan and measure their customer relationships as well as the profitability of their programs and products. Examples include having the ability to track and measure prospects and customer leads, and identifying the top prospects that are most similar to a bank's existing most-profitable customers. Successful customer relationship managers are finding new ways to put scientific principles behind marketing programs and thus create accurate measures of marketing return-on-investment.

Customer relationship management

CRM allows financial services institutions to build personalized relationships with their customers by offering them customized products and services in a quick and timely manner. The result of successful CRM programs is enhanced profitability. There are four key aspects of customer relationship management.

Customer acquisition. A high close rate and a short sales cycle characterize a sales team that knows how to identify the ideal prospect. Customer profiles provide models to help target new prospects.

Customer intimacy. Through customer intimacy, organizations can build a valuable one-to-one relationship with new and existing customers. When key variables change (i.e., marriage, birth of a child, new home), opportunities arise to sell new products and services.

Customer satisfaction. Greater customer understanding improves the quality of each customer interaction. With precise information presented visually and on-demand, call centers are able to promptly and efficiently meet the customer's needs.

Customer retention. Improving retention creates more repeat customers with up-sell and cross-sell opportunities. With in-depth knowledge management, users can visualize historical sales and service information along with external, enhanced information to help better understand and anticipate customer needs.

CRM systems that help to analyze business issues such as profitability and customer-base penetration typically draw from static data that is updated only at spaced intervals--daily, weekly, monthly, etc. If any piece of data changes, the analysis and results lose their accuracy, and information becomes old and unusable. For example, addresses and life events, such as marriages or births, frequently change individual profiles and can significantly impact target-marketing campaigns.

Creating smart content

Today, a concept called smart content provides live data that gives banks an always-up-to-date view of their customer data. Smart content provides sales and marketing professionals with a more complete and up-to-the-second picture of a customer or prospect, or a set or customers or prospects, from which better-informed sales and marketing decisions can be made. …

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