CRM strategies aimed merely at securing loyalty won’t maximize the value of a customer base. Companies need to go one stage further and encourage customers to recommend their services to others.
This is the conclusion of a new, free White Paper from Fiserv, aimed at financial services organisations installing or upgrading CRM systems. The paper explains why a good customer service strategy is essential, and how understanding profit drivers increases the effectiveness of marketing.
“Businesses shouldn’t draw the line at loyalty if they want to fully realise their investment in a CRM system,” said Marston Manthorpe, managing director, Fiserv InformEnt. “Instead, they need to cultivate loyalty to the stage where the customers start evangelising about the company. Key to this is a properly focused customer service strategy.”
“All customers are equal, but some are more so than others. Companies need to identify their most profitable customers and treat them accordingly, as this segment is the most likely to become advocates. This isn’t to say that other customers should be ignored or get a second-rate service – far from it. It just means that marketing activities should be tailored,” he added.
Fiserv is an independent, full-service provider of integrated data processing and information management systems to the financial industry. As a leading technology resource, it serves 10,000 financial service providers world-wide, including banks, broker dealers, credit unions, financial planners / investment advisers, insurance companies, mortgage banks and savings institutions.
Fiserv’s world headquarters are in Milwaukee, USA, while its European headquarters are in Stockley Park, Middlesex. The company’s European product and service offerings cover three core areas:
Retail banking and consumer finance solutions
Fiserv provides integrated solutions for retail banking and consumer finance, from account processing and electronic delivery channels, to customer relationship servicing across branches, call centres, the Internet and WAP-enabled mobile phones.
Knowledge management and Management Information Systems
The company develops data warehousing technologies for the retail financial services sector. Its InformEnt product is a fully integrated enterprise-wide knowledge management solution based on a data model specific to the retail financial services sector. Modular in design, InformEnt underpins CRM and balanced business scorecard production by providing rapid access to actionable information.
Customer profitability and risk management
Fiserv’s IPS-Sendero products are used for balance sheet risk management (asset / liability management) and customer profitability management. Fiserv’s clients in the UK include Prudential, Birmingham Midshires Building Society and HSBC.
FISERV InformEnt Customer Relationship Marketing White Paper:
Don’t stop at loyalty, recruit advocates
Customer Information as a Strategic Asset
There is an accelerating strategic shift in many Financial Services organisations today towards being more customer-oriented. This shift is backed up by the view that winning strategies will be customer centric and revenue generating rather than cost cutting.
A key impact on revenue-generating strategies is to carefully select your customers rather than the other way round. Of course, with an existing customer base, this may be based on a selective pruning exercise as well as new choices.
Self-selection of customers allows prediction of current and lifetime performance and concentration of delivery channels and acquisition resources on the best potential customers for each product / service. As a result,customer information and relationship management will increasingly become a strategic asset.
Customer Relationship Marketing, which focuses on getting and keeping the right customers, is typically characterised by its enterprise-wide focus and vision,along with a commitment to achieving superior and sustainable profitability.This will build a foundation,acting as a customer information hub,which may be used to manage and improve customer profitability over time.
Such a repository must capture information at all points of customer contact, and make the information available to all customer-facing people and systems.Thus the customer becomes a vital unit of measure.
The ability to hold such customer information alongside all other information (especially financial) in an enterprise-wide hub will,for the first time, provide a consolidated platform for decision making.
A deployment approach that is supportive of the culture of the organisation,capable of delivering benefits to identified areas of need quickly,yet retaining an organised and enterprise wide plan of approach is required.
1.2 The need for a Customer Relationship Management Strategy
Financial Organisations want to gain and retain the right customers. To be successful, differentiation is required by focusing on 1 to 1 marketing and moving into the upper right quadrant (IV) of the diagram below.
Provision of a holistic approach to customers will be pivotal in pursuing a relationship strategy. This will entail continued focus of the people and processes moulded around a customer service culture.
The goal in deploying a comprehensive customer relationship marketing strategy is to be able to capture prospect and customer data from multiple transactions, or customer encounters,across all channels and from the totality of source systems in such a way that it can be used to deepen customer relationships. The standardisation and consolidation of this data into an accessible customer knowledge base is in fact the process of deploying a data warehouse.
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