Pre-downturn CRM rules applied by banks “no longer valid”
The Customer Relationship Management rules applied by banks before the financial crisis are no longer valid, new research claims.
Transaction services provider Atos Origin and EFMA (European financial management & marketing association) found that the “post-financial crisis” global CRM approach is still rarely explored.
Their research is based on a survey of 75 European financial institutions including retail banks, and insurance companies, and aims to help banks refocus their CRM strategy in order to reassure customers and bring back profit in these uncertain times.
EFMA and Atos say the current economic context and financial crisis has most probably led many financial services institutions to refocus their CRM strategies with the customer relationship being more than ever the key to profitability of a retail activity. These institutions have to design a new approach to regain and reassure customers. Even if they have only started building a “how to win back trust” strategy, there is a general movement towards “refocusing on the customer” for the “post-financial” crisis phase.
The report places CRM strategy at the top of the agenda and looks at the different approaches to CRM, the implementation issues and the technology requirements. Financial institutions can use this information to benchmark, develop and refine their strategies.
The report highlights the following key conclusions:
“A win back trust” strategy
Financial institutions have to rethink their CRM approach and reposition the customer at the heart of their global strategy in order to win back customers. An optimum balance between financial investments and the satisfying customers’ needs will generate the maximum profit. In this context, going back to finance basics seems inevitable, but not without following a “customer-centric” approach leading to a more meaningful relationship with the clients:
— Improving customer understanding by getting hold of behavioural and relational characteristics
— Identifying the customer’s favourite channels while repositioning the channels according to their profitability
Yet, according to the results of the interview, only a few actors have really set up a new “post-financial crisis” strategy.
Spreading the “think customer” strategy throughout the whole company
There is a continuous effort from financial companies in spreading the “think customer” strategy throughout the whole company. In order to strengthen this effort, companies should provide proper change management strategies for the progressive improvement of employees’ skills and buy-in. In fact, the difficulty is not whether the tool is easy to use or not, but to change the way to sell as well as the perception of customer himself.
Furthermore, CRM is a significant part of the strategy, but not the only one. Therefore, CRM projects have often to be included in wider projects.
Ultimately, it may require a change in corporate culture for many financial institutions. The most successful banks and insurances companies are likely to be those where CRM is well integrated and is at the heart of the company’s processes and activities.
Transforming information into action
There is an increasing demand for real-time customer information on online channels. To satisfy this need, companies seek for more and more sophisticated customer intelligence tools, developing targeted individual approaches. This “customer intelligence” approach requires in-depth work on the quality of information while enriching it.
The “intelligence” about the customer must be captured in the process itself, so the same knowledge base could be used by everybody, everywhere, anytime. This is why future investments are mainly concentrated on “real-time” solutions and mobile channels helping to be more pro-active.
Fine-tuning sales channels
The research found that no channel is dedicated to a specific segment. Traditional channels are still widely used, but electronic channels are now rapidly becoming more and more important.
Financial Institutions mainly focus on strategic development of direct channels, their need for short term results leading them to seek means to reduce costs. But the research found that if they want to bring back trust and profit together, they will have to consider repositioning and fine-tuning their sales channels in order to increase their sales efficiency.
Besides, influencing the whole sales & marketing strategy internet is becoming one of the most important channels.