CRM: More of Business, Less of Technology

It’s a manic Monday and Amol Joshi has just left for work when he receives a call on his mobile phone from an agent selling home loans. Amol is interested in a loan but the bank’s interest rate appears to be high- he tells the agent to get back with a better rate. That afternoon he receives another call on his office number from the same bank – it doesn’t take long for Amol to figure that there has been no interaction between the former and current agent.

With the amount banks have been earmarking for technology in the recent past, they are believed to have systems in place that could avoid such situations. Possibly a customer interaction tracking system that could have helped the bank avoid duplicating its efforts while still not delivering to the client, not to mention of course avoiding annoying a potential customer.

The fact that banks are failing to treat phone and email interactions as potential sales opportunities is corroborated by research firm Datamonitor in a recent study that it conducted on the global retail banking industry. As per the findings, no Indian bank – foreign or domestic- made a proactive attempt to follow up with the customer after the initial telephone/email interaction.

While 38% of all Indian banks offered to send the customer related marketing collateral none of the banks successfully fulfilled the customer’s request. 87% of all Indian banks researched made no attempt to cross/up-sell related banking products during the course of customer interaction and a similar percentile made no attempt to understand what features the customer was interested in before making product recommendations. A true eye opener, this study proves that banks are yet to reach the utopia of customer centricity.

The cumulative effect of these statistics could spell doom for banks in the long run through increased operational expenses, wasteful marketing exercises and the inability to recognize cross sell opportunities. This is more so in the case of new age banking where retail banks have become marketing behemoths of sorts. Offering a larger range of products than ever before, including depository services, credit cards, home loans, personal loans, car loans, DMAT accounts and insurance, today’s retail banks are fighting for an ever larger wallet share of their existing customer base.

In this background, it is essential that banks look to optimize every customer relationship in order to get the most out of each. In an era where the customer is king, banks must gain the tactical ability to capture customers’ basic contact details and make product recommendations based on accurate interaction data. This is where true customer relationship management (CRM) begins.

Customer Relationship Management is really much more a human function than a technology implementation. And while banks need to constantly orient their employees and vendors towards never losing focus of the customer, technology can be harnessed to enable the human aspect to function more effectively. Starting with building a comprehensive view of the customer, the first step begins with putting in place an Analytic CRM (A-CRM) framework – one that automates data capture across channels and during every contact with the customer. Central to the system is its ability to integrate data from multiple contacts made with a single customer for various product and service offerings. This would typically provide the bank with a birds-eye-view of the customer, his saving, spending and buying patterns.

The next logical step is to use this 360 degree view of the customer, juxtapose it against predictive, descriptive modeling and forecasting techniques in order to zero in on the best way to reach a particular customer. For eg: A customer whose debit card reflects frequent travel is probably best reached on his hand phone as compared to a direct mailer sent to a residential address.

Additionally the solution is also capable of performing market basket analyses to predict which customers will be good candidates for cross-sell opportunities. After analyzing demographics, purchase history and other significant data, it creates profiles of common customer behavior patterns basis which current as well as new customers can be approached with specific products rather than random ones. Another functionality of A-CRM is segmentation and profiling which will typically allow a bank to identify specific segments within its customer base and design marketing strategies customized for these segments.

To conclude, to make CRM work, it needs to be approached as a business rather than a mere technology initiative. It needs to be viewed upon as a means to increase customer satisfaction for maximum revenue generation rather than the other way around. CRM is not just a technology but a mindset that needs to be all pervasive – an organizational mantra of sorts. Once these basic tenets are established and imbibed, the technology side of CRM implementations becomes a natural progression.

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