Building Effective CRM Systems

CRM Objectives in Banking Sector

CRM is a sound business strategy to identify the bank’s most profitable customers and prospects. It devotes time and attention to expand relationship with customers through individualized marketing, reprising, discretionary decision making, and customized service through the various sales channels. Any financial institution seeking to adopt a customer relationship model should consider following six key business requirements; creating a customer-focused organization and infrastructure, gaining accurate picture of customer categories, assessing the lifetime value of customers, maximizing the profitability from each customer relationship, and understanding how to attract and keep best customers. Today, many financial service organizations are rushing to become more customer focused. A key component of many initiatives is the implementation of Customer Relationship Management (CRM). Our research highlights that most institutions take a rather narrow view of CRM and therefore, benefits have been limited. However, second generation CRM has emerged to embrace the whole organization; yet success in general has still not been widespread.

The idea of CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If CRM works well, a business can provide better customer service, make call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues. However, this doesn’t happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers’ life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time fitting their needs. Next, the organization must look into all the different ways of information about customers that revolves in a business; where and how this data is stored, and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, web sites, brick-and-mortar stores, call centers, mobile sales force staff, and marketing as well as advertising efforts. Solid CRM systems link up each of these points. Collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. In CRM projects, following data should be collected to run process engine: responses to campaigns, shipping and fulfillment dates, sales and purchase data, account information, web registration data, service and support records, demographic data, and web sales data.

Over the last decade, too many organizations have assumed that their products or services were so superior that customers would automatically keep coming back for more. However, in order to compete effectively in today’s marketplace, organizations must change their strategy; be more customer focused, not product focused. Customer Relationship Management (CRM) is the best way to integrate customer-facing approach throughout an organization. Aimed at understanding and anticipating the needs of an organization’s current and potential customers, innovative book by Siddiqi et.al shows how CRM links people, process and technology to optimize an enterprise’s revenue and profits by first providing maximum customer satisfaction, developing a market-oriented strategy, innovation in products and services, sales and channels transformation, customer relationship marketing and customer care.