By Don Peppers and Martha Rogers
1. Earn and keep the trust of customers.
This means acting, at all times, in the customer's interest. The single most successful financial services firm in the world, in terms of a customer-oriented yet profitable business, is USAA, the US based direct-writing insurance firm.
A recent Forrester survey ranked them highest, by a wide margin, in terms of their perceived "customer advocacy," which means working on behalf of the customer. They also ranked highest, by a similarly wide margin, in terms of "company I would most like to do more business with."
2. Treat different customers differently.
CRM has become popular with businesses because technology now enables a firm to treat different customers differently. Customers want to be treated individually. As they experience CRM at more and more companies, they have come to expect individualized treatment. But it requires more than technology.
You have to have a plan for differentiating your customers. If you treat all customers the same, then you don't need any CRM technology. Save your money instead, and try to get a higher price when your firm is acquired by a competitor, as it will be.
3. Think of your customers' lifetime values as financial assets.
The key to successful CRM is not just generating current sales from a customer, but increasing (or at least not eroding) the customer's lifetime value.
Yet, even though a majority of large financial services firms do try to model their retail customers' lifetime values, at least occasionally, only a very small number of firms try to gauge the effect of their actions in terms of changes in these lifetime values.
4. Differentiate your customers by their needs.
It's important to know how valuable or growable a customer is, in order to set your objective for that customer. But achieving the objective requires you to change the customer's behavior, and to do that you have to know what the customer's motivation is - what his needs are.
Different customers have different needs, and the more insight into these needs you can acquire, the better chance you'll have of achieving your objective.
5. Train and empower your customer-facing employees.
They need to be able to make decisions that actually commit resources to resolve customer problems. To a customer, the person on the other end of the phone, or behind the window at the branch, is your company.
6. Redesign your customer-facing business processes.
Relationships can't be "installed." CRM technology implementations only succeed for those firms that fully acknowledge the extent to which these new technologies will actually change the nature of their business. Planning for those changes in advance is critical.
7. Get your CEO's support and involvement.
Surveys regularly show that when CRM efforts are led by someone from the CEO's office, they are up to 50 per cent more likely to succeed, compared to implementation efforts led by someone from the sales, marketing, customer service, or IT functions. This is because CRM changes the nature of your business.
It is a radical idea, and success requires crossing a number of departmental and channel boundaries within the firm.
8. Stop thinking "marketing campaign" and begin thinking "marketing event."
Traditional marketing is done in campaigns, but with CRM technologies you can do your marketing constantly, based not on your company's timing but on each different customer's own timing.
Event-based marketing initiatives are generally much more successful than campaign-based initiatives.
In the Netherlands, for example, if you are a creditworthy ING customer requesting cash from an ATM, and the machine tells you there isn't enough money in your account to do the transaction, then within two weeks ING will mail you a solicitation for a credit line. This mailing generates a response rate greater than 50 per cent.
9. Never make a customer tell you the same thing twice.
Most firms install CRM technologies with the desire to sell their customers more stuff. But the right motivation is to use these technologies to deliver your customers more value.
Number one on the list of things you can do to provide your customers with more value is simply remembering each customer, from event to event, transaction to transaction.
How many times have you called a credit card company's call center, been asked to key in your account number, and then when a rep answers the phone the first thing they ask you is what your account number is?
If your retail bank wants to sell more mortgages or loans to customers, then when a customer applies for a loan you should use your CRM technology to fill out most of the loan application yourself. Don't ask the customer to tell you his account numbers and balances at your bank!
10. Put someone in charge of managing the customer experience.
There are many different ways you can organize this, but in the end you have to have someone at the firm who is responsible for what the customer sees, hears, and experiences in his dealing with your company.
Credits: Don Peppers and Martha Rogers are from Carlson Marketing.
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