Industry Insight

4 Ingredients for Successful CRM

For all the noise generated about CRM, it’s easy to lose sight of one simple fact: CRM can enhance a bank’s profitability.

The banking community knows that CRM is more than a computer system or an approach to serving customers. It’s a business strategy that places equal emphasis on sales and service. In this light, CRM enables the bank to increase the value of its advice and service by effectively using its customer information.

Banks, of course, have been using customer information to enhance customer sales and service for a long time. What is different today is that powerful tools now exist to help banks mine the real “gold” in their customer information.

Here are four CRM ingredients that can help a community bank use the customer information already at its disposal to enhance its bottom line:

Relate Information

Successful community banks know their customers’ habits, the types of services they use, where they live and work, and can quickly identify their profitable customers. If your bank wants to be more successful, it needs to ask three questions on a regular basis:

  • What do you know about your customers?

  • What do you need to know about your customers?

  • What is the profile of your profitable customers?

The result of this research will be important information that can be stored and accessed through any customer-focused core system. If your staff knows where to look, they can call up a customer profile and see the customers’ product gaps.

To take maximum advantage of customer information requires your bank to cleanse its data — making the names and addresses consistent, making sure that customer birth dates have been entered. The resulting consistent body of information is critical to all CRM activities.

With clean, well-organized data, many relationship management tools exist to help model your customer base and manage your prospects. To do this effectively, these tools must be fully integrated with your bank’s core and electronic banking systems. Without integration, these CRM tools really don’t have much value.

Establish a Sales and Service Culture

The key to any successful CRM program is training your staff to participate in a sales and service culture. You can have the best customer information in the world, but if your staff won’t sell your product, it doesn’t matter.

The customer-focused information in today’s core systems can help orient staff to customer needs. If a teller feels s/he is serving a customer rather than processing a transaction, selling becomes a bit easier. And not just for the teller. Customers will notice the difference too! When customers are well served, they are more receptive to new product offers.

If your staff understands the thinking behind the bank’s customer model, they might generate additional opportunities. For example, if a customer regularly deposits extra funds to cover checks they’ve written, an astute customer service representative might notice this pattern and suggest a consumer loan. Taken to a higher level, the same smart banking professional can use a modeling system to uncover all the customers who exhibit the same behavior. That’s using technology to exploit new sales opportunities.


Develop a Profitability Plan

Today’s new CRM tools are intended to translate theoretical opportunities into real revenue production. While a noble aim, no bank can avail itself of all opportunities. So choices need to be made based on profitability.

Using the same information to define your customers, particularly transaction data, you can also develop a revenue plan based on customer, product, and even branch profitability. Today’s integrated CRM systems have these capabilities, but your accounting department may also have the tools for the job such as an executive information or profitability system.

The most important consideration for this CRM ingredient is harnessing the attention of everyone in your institution to your revenue goals. It must be one of your institution’s top priorities, and it must be reinforced with a program of employee rewards and incentives.


Fit It All Together

CRM and profitability require bank-wide commitment and consistency of message to staff, customers and the broad market for your financial services. While CRM systems continue to evolve, integration remains the single greatest stumbling block. To work effectively, the bank’s core, electronic banking, and profitability systems must be thoroughly integrated with the CRM system.

If your bank doesn’t have access to this level of integrated solutions, don’t despair! The ingredients are available today, and the time to begin accumulating them is now. Ingenuity and sound advice can help tremendously in starting your journey to the “golden” tomorrow of integrated CRM solutions.

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