Integration combined with organizational change management is
The key to successful CRM
6th April 2004

Written by Chris Read, Chairman of CRM specialist Dunstan Thomas

Many financial services organizations today recognise that they need to serve customers better to continue growing in markets that are becoming more competitive. It is important to know which customers are the most profitable. You also need to know which customers are the most satisfied and which are not. Why not? Which types of products are customers likely to be interested in buying? When will they want to buy them? What is the likelihood they will buy a certain product? These are the sorts of questions CRM systems aim to address today.

But to provide intelligent, timely, accurate answers to these sorts of questions, financial services companies need to go through several steps.

Stage 1: Define a CRM Strategy

Firstly you need to know what your customer strategy is. How do you want to segment customers? Have you defined specific customer service levels for each segment? Have service level agreements been drawn up?

These service level agreements might determine agreed response times to requests regardless of sales channel. They might stipulate frequency of phone contact or speed of application confirmation. The CRM strategy might also want to cover questions like which sales channels are most appropriate for a specific customer group? And what is the cost of serving a given customer?

In order to serve a specific customer effectively it is important to ensure that the business processes are in place to make that customer interaction effective and positive. This may involve workflow links being established between sales, marketing and services functions in the front office to ensure that there is no overlap, while limiting the need for repetition of personal information by the customer.

But a CRM strategy must go further than answering the above questions. You will need to develop your service offerings to a point where you differentiate you business from the competition – helping you to secure customers that others miss in the heat of the sales moment. For example, are you able to get a decision in principle to a mortgage borrower within minutes? Can you provide an electronic quotations service online for 24/7 self-service? Are intermediaries able to track progress of a customer’s application through its various stages of approval online? Are they able to see the same information, at the same time as your call centre staff? Is the view of the customer consistent and up-to-date regardless of the sales channel that is being used to reach your organisation?

Many financial services companies have already managed to agree a CRM strategy and carry out much of the business process management work so that they are beginning serve some customers better across multiple channels.

Stage 2: Business Process Management

There is no doubt that the whole of our market has been investing heavily in business process management over the last few years. A rapid surge in ‘electronification’ in recent years means that it is now possible for advisers to source multiple quotations; draw up comprehensive illustrations; complete and send new business applications; gather policy confirmations; take delivery of policy review statements; and commission statements, all via the internet. The reduction in paper-based errors alone has meant a significant saving of time for those lucky enough to take advantage of all this new technology.

This investment in business processing has also undoubtedly delivered some benefits to providers also in terms of sales increases and reduced cost of acquiring new customers. Some may have even begun to extend the life of their customers and add additional value to the customer experience along the way. All this is being achieved against a backdrop of an extremely challenging market for all players.

Stage 3: Back Office Integration

But you cannot afford to stop there. You must also be able to take the growing quantities of data being gathered in your back office databases and bring these together into a more meaningful ‘360 degree, single view’ of customers. It is important to order all customer data so that insights can be gathered easily by those who are trying to understand what products or service offerings are likely to fit which groups of customers.

Stage 4: Back to Front Office Integration

This implies tight integration between back and front office applications to ensure front office staff are managing their day-to-day activities in a way in which the customer-base is best served.

This integration will enable you to push timely information and prompts to front line customer service staff and financial advisers to help them serve their customers more effectively. One of the main objectives of this integration work is to ensure customers are not kept ‘on hold’ while staff rifle through paperwork, or worse, resort to the old line guaranteed to reduce sales ‘Can I get back to you on that one?’ Confidence can be lost fast in these situations and your competitor is only one or two calls or clicks away.

Stage 5: Realigning the organization behind the customer

Once this integration work is complete getting your staff to put it all to work is the next key task. This is the stage which often determines success or failure of any CRM programme. Management time will need to be devoted to considering how best to incentivise front office staff to provide good customer service. Metrics will need to be established which trap key information such as the speed of resolving a customer query. If employees exceed these targets they need to be recognised and even rewarded for this achievement. In this way the whole organisation begins to strive towards ‘customer centricity’ as they pursue common goals which are no longer simply about selling more of a specific product. In some cases, organisations will need to reorganise their teams so that they become defined by customer segment or type, rather than by function alone. This is a practice widely adopted in the retail banking world for example.

It is also important to tackle the issue of ‘Customer Intimacy’ as Bloor Research (In Customer Relationship Management in Financial Services February 2001) prefers to call it. In essence if you can serve the customer as a person with his or her concerns, ambitions and lifestyle information rather than simply a policyholder, then greater loyalty is automatically created. This in turn will lead to greater profitability.

The process of designing a system to stimulate the customer to value a deeper relationship with your business is probed by Microsoft Business Solutions and financial services specialist CRM solutions partner Dunstan Thomas.

Their approach, working with financial services companies, is to first analyse the ‘pain’ that key department heads feel day-in, day-out. Solving these pains should also feed back to serving the customer better. As such these pains inform what any CRM system needs to achieve in addition to the objectives laid out in the CRM strategy.

To illustrate this here are two mocked up ‘Pain Sheets’

 

The above pain sheets illustrate the wholly separate agendas that are at work in different departments of an organisation. But without understanding and addressing all these concerns any CRM project, is unlikely to be successful. Nothing will change unless the system also enables these changes. CRM cannot simply be implemented over the top of the existing organisation and its problems and issues. It must also address deep-seated issues and grumbles that prevent the organization as a whole from moving forward.

Summary

So organisations starting on the road to CRM need to remember the following top 10 tips to achieve success.