Customer Relationship Management Best Practices

By Ken Sebastian, Vitex

While customer relationship management (CRM) is a popular idea at bank conferences, it is still in its infancy within the community banking market. There remains a huge gap between the promise of CRM and the reality. But, a few success stories within banking and in other industries have identified several common keys to success. Here are a few basics and fundamentals to a successful CRM project.

• Start at the top: CRM fundamentally is about changing people’s habits and processes. And change is difficult, since human resistance to change is normal. The commitment of time, attention, and overall support of the Directors, CEO, and executive team are critical. 
  
  
• Simple and clear: Don’t do too much too quickly. Best practice is to focus on simple projects that provide a clear benefit to the organization and the users. Early results breakdown barriers to change and provide momentum for new enhancements.

• Anticipate mistakes, learn, and launch a broader project: CRM is so new that mistakes are inevitable. Best practice means letting people know that this is a test phase and they have been chosen for their knowledge and expertise to help the bank design the system. The result is lower expectations from the users initially and greater willingness to make suggestions for improvements.

• Managing change in people’s behavior and ideas, not technology (yet): Technology is ultimately important to a successful CRM project. But, it is still low on the overall scale of importance. Managing the process of organizational change is far more critical to the success of the project, particularly in the early phases. Best practice is to spend 80% of your time on change management and 20% on technology.

• No technology (yet), use paper-based processes: A low cost method to implement change without the cost and complexity of new technology is to experiment with manual processes initially and then gradually add technology as lessons are learned.

• Start with the end in mind: Define how you will know if CRM succeeds before starting the project. Expense and change in the status quo are key, and therefore the ability to measure the results makes a huge difference in gathering and maintaining management support through good times and bad.

• A sales culture, yes a sales culture: A sales culture needs to be well-established before a sales management tool will do any good.  Technology is not a substitute for a sales culture. It can only support one that is already in place.

• Delegation will not work: Require regular top management involvement in the implementation and planning process.  Middle management cannot drive a CRM initiative. Executive management must be actively involved on a regular basis in directing the project.

• Make the user’s job easier: Best practice is to remain focused on building a system that makes the user’s job easier and more productive. Keep asking the question - How will this change make the user more productive or deliver more value to the customer?
• Contact management equals organizational change: A basic challenge for most banks is maintaining a history of customer contacts. There are rarely records of past customer complaints, requests, or concerns. Therefore, customers experience the “silo” effect of having to repeat every event to multiple staff members in order to resolve a problem. CRM can easily resolve this dilemma by tracking these contacts on-line.

While the extent of change required to accomplish a successful CRM initiative is significant (after all, who does it today?), the payback in terms of improved customer service and productivity can be dramatic. 

<back to June 2006 Directors Digest>