What Could Go Wrong?
Murphy’s Law. We’ve all heard it. “If anything can go wrong, it will.” What if Murphy owned a Customer Relationship Management (CRM) system? What could go wrong? Everything!
Need to Care, Need to Know
Despite all of the discussions bankers have had over the years regarding building a sales culture, the reality is that most bank employees are not sales people. They are typically transaction- and operations-oriented and tend to hire people who are just like them. Because of this, they are not really motivated to purchase a system that coordinates and rewards their sales efforts.
That’s why, even though the CRM industry is more than 20 years old, only about one third of all banks have any form of CRM system. The best banks are sales oriented, are actively using their CRM system, and are working hard to break the mold of being just order takers.
Most bankers don’t know what they don’t know. They have heard that they need to purchase a CRM system but they have not done a needs analysis to know what they should purchase. The best banks have completed a comprehensive needs analysis before any purchase decision and have answered questions such as:
§ Do we only need a marketing research system to help us make managerial decisions?
§ Do we need a way of distributing prospect information, referrals, sales, and customer needs information throughout the bank?
§ Do we want to build in incentives within the CRM to encourage additional sales efforts?
§ What kind of technology do we want to purchase? Do we want a client-server, Web-based or stand-alone system, or, would we be happier farming this out to someone who will do everything for us as an Application Service Provider (ASP)? Then, there are the finer points. What database structure and programming language do we want the system to have and is it scalable to meet our future needs?
The Need for Buy in
Many decisions have failed because the people who were affected by the decision didn’t buy into the decision in the first place. Making the decision to purchase and implement a CRM is a complex one and each area of the bank needs to buy into the CRM in order for it to be successfully utilized. The best banks find out what their lending officers, tellers, CSRs, and marketing campaigns need from a CRM and then work toward fulfilling these needs.
Having Realistic Expectations
Bankers that have never had a CRM before can make the mistake of thinking that it is the cure-all, which can solve all of their problems. They expect too much out of the system too soon and are sorely disappointed when reality hits. They forget that a CRM system is not only software, but also, more importantly it is a management process that involves people on many levels throughout the bank. When buyer’s remorse hits emotional lows, they are prone to even scrap the CRM altogether instead of salvaging what has really worked.
The best banks phase in their CRM implementation over a number of years. For instance, the first thing they concentrate on is to make sure the bank’s data is clean and that the interfaces to the CRM software are functioning properly – and for good reason. Despite all of the efforts bankers have put into fast and accurate transaction and operational systems, the data within these systems is notoriously dirty. Worse, most of these systems are old “legacy” systems that are painfully difficult to integrate with more modern open databases.
After this data cleansing and integration process has been completed, the best banks integrate profitability from their profitability system into their CRM. Again, this needs to be done in phases. The profitability system needs to be reconciled to the bank’s financial statements before the processed profit data is imported into the CRM. Only then can additional elements such as transactional fees and costs be integrated in the profit equation. Remember, profitability is a journey, not a destination. As Warren Buffet stated, "it is better to be approximately right than precisely wrong.”
Training the Right People
Banks need to spend the time, effort, and money to train their people to use the CRM. This is the hardest part of implementation, because you need to change people’s behavior; and, most people don’t want to change their behavior! The best banks hire sales people, pay them a base salary with a generous commission, and give them incentives to produce. These are the kinds of people who want to have every advantage they can to increase their sales volume, so they are motivated to learn new methods and systems to help accomplish their goals.
Be the Best!
Despite all the difficulties involved with implementing a CRM, is it worth it? The best banks think so – despite Murphy’s Law!
John J. Coffey, C.P.A. and Gene Palm are the principals of Profit Resources, a consulting company that specializes in MCIF technologies. © Profit Resources, Inc. 2006
