Yasril Syaf, University of IndonesiaQuestion 3I have already posted it on http://yasril.posterous.com/ABC XY Bank combined customer base reaches more than 3 million customers in more than 650branches. The bank now operates double the volume and at the minimum, needs to maintain its customerbase. Your team is asked to evaluate current service operations, segment and analyze the customer baseand devise a customer contact blueprint that balances the cost of service with the current and potentialvalue of customer relationships. What would you propose?

To help you in developing a Customer Relationship Management strategy, a software design is available.But please note, that you may use other sources.

Other ResourceAccenture Methodology and key assets for SAP CRM upgrades

ANSWER:

INTRODUCTIONThe successful customer interaction is the basic foundation which the bank built its CRM

strategy. The goal of the CRM is to improve marketing, sales, and service by managing customerinformation combined with a customized customer contact blueprint strategy. The merger oftechnologies between three banks will help the Bank ABC XY to achieve its vision for CRM. Companiesthat focus on customer strategy first will be far more successful than those that focus on CRMtechnology first. If customer is the strategic objective, then the software such SAP CRM is just one of aplatform to ensure that the CRM strategy is executed well.

When beginning to manage the customer relationship area, we start to realize that CRMrepresents a new way of doing business for banks such as the concepts as the sales culture, one-to-onemarketing, data warehousing, data mining, customer segmentation, loyalty programs, and cross-selling.While banks should rightly be focused on the major implications of these mega-mergers on customersatisfaction, they also need to consider what they mean for the technology on the back-end that keepstransactions moving. Banks will require new tools and strategies to maintain their reputation, thus willlikely involve CRM such as SAP CRM Solution or other solution. It encourages profitability and CRM mustbecome a tool around which the bank organizes a “customer centric” business strategy that usesinformation technology to anticipate customers' financial impacts. Making sure you decide on the rightCRM technologies and strategies is important, thus we can leverage the data more relevant to yourbusiness.CRM Strategy

It is very important for the organizations to have a good CRM strategy as they plan to implementCRM technologies such SAP in addition we want to have SOA (Service Oriented Architecture) as a coreservice. As CRM is about creating a competitive advantage by being the best at preparation, plan,analyse phase, implementation (Design and Build), testing and Go Live until we can maintain existingcustomer relationships in addition to creating new customers, similarly customers have changing needsand lifestyles. According to CRM (UK) Ltd, a successful customer relationship management strategy willaddress four key areas of the business: Strategy (Foundation), People (Customer and Employee),Technology and Processes (SAP CRM or other vendor).

This picture shows us about four-aspects that we may consider in developing CRM strategy. Thereal challenge of CRM is no different from the challenges of any strategic initiative: developing andimplementing strategy. Think that CRM as an essential component of customer strategy, not as atechnology because technology is just a component for delivering a CRM strategy and it should be thelast component to consider. The three key steps to develop and implement a CRM strategy have nothingto do with technology. Instead, according to Michael Fleisher, chairman and CEO of Gartner, Inc., CRMis:• First, about whether you have the right corporate vision.• Second, about whether you have the right strategy to achieve that vision.• Third, about whether you are willing to change your business processes to change the nature of yourclient relationships.• Fourth, about whether you have the technology in place to do it. When one, two and three are done,four isn’t that difficult.

Service LevelOne critical aspect of CRM that the Bank ABC XY has to address widely is the requirement to

balance sales and service initiatives. Integration and implementation of technology is important to aCRM strategy, the Bank ABC XY have to clearly understands the need to change reporting structures andbusiness processes because too often banks invest in huge and sophisticated technologies withoutconsidering about the new impacts into existing business processes.

Intelligent data analysis such data mining and business intelligence provides the tools formanaging meaningful relationships with the customers. Data analysis can direct the design of marketingcommunications, the management of quality service delivery, the development of quality products and

a number of other outcomes that translate into long term profitable relationships with the only sourceof sustainable revenues: customer revenues.

Bank ABC XY evolved its understanding of CRM metrics to include external as well as internalmeasures. When evaluating the success of its CRM strategies the bank will look to external measuressuch as customer loyalty, customer satisfaction, and customer retention to fulfill its understanding ofcustomer profitability and marketing efficiency. This diversified group of CRM metrics assures the BankABC XY that customers are being served well and align with the bank’s interest.

Segmenting and targetingWithin the Bank ABC XY developed a matrix of five big customer financial needs. While some

customers may need other several of the financial needs, every customer would need at least one of thefollowing: (Bank ABC XY’s core services)1. Funding2. Risk Management (asset management and insurance products and services)3. Consumer and Corporate Banking (deposits, withdrawals, transfers)4. Investments (depository services, custodian services, securities, bonds)5. Information system

As the large merged new Bank, Bank ABC XY should develops new products or marketingstrategy that fulfill the five big needs to match its communication strategy with each customers at anygiven time. These segments help the Bank ABC XY to categorize customers broadly into easily definedtargets. Therefore, the Bank ABC XY has taken each of the some super segments and has refined themfurther to define their customers more accurately. After the additional refinements are complete, theBank ABC XY has a few hundred sub segments for highly targeted marketing purposes.

Customer Contact BlueprintOther banks that have risen to the forefront as practitioners of CRM use technologies to assist

customer contact personnel with providing appropriate service to customers. Using customer-levelprofitability information for making decision ensures that customers are treated appropriatelyregardless of the contact channel or the employee providing the service. Accenture suggestorganizations must be able to identify different types of calls, to apply the metrics most appropriate foreach call type. Properly correlated metrics will produce powerful insights into how performance can beimproved. Many contact centers, however, do not have access to the information they need to conductthis kind of analysis, and will also need to implement more advanced capabilities for capturing andanalyzing performance data.

Within the bank, the following characteristics are viewed as integral to successful customercontacts: (Tower Group Research Notes)

anytime, anywhere access and navigationfriendly, capable, proactive resourcesorganizational memorystreamlined, personalized, secure process

consistent and totally satisfactory customer experience while demonstrating a track record ofcontinuous improvementsuperior profitabilityEffective customer contact across contact points is benefit of CRM. The ability to facilitate this

concept makes the more customer information highlighted by the first two questions, management ofcustomer contacts will introduce organization structure and culture. A way to measure this is with thefollowing question. How many phone calls does a good customer (one with multiple products) have tomake to change his/her address across all the products that they own? In big multiple product-linecompanies, the answer should more than one. Revise customer contact issues like this one requiresorganizational policies that depend on CRM, organizational culture, and an organizational structure thatsupports it.

Recommendations for Bank ABC XY

• Focus on developing vision and customer strategy related to long term business goals. It is necessaryto understand customer’s value when developing the strategy. The organization needs to understandthe benefits of CRM. Almost all CRM commentaries warn companies not to see CRM as just a technologysolution. However, technology is a key enabler for implementing a CRM strategy.

• Develop processes for strategy execution that support customer strategy and business needs to beflexible to what customers need because these needs will be unseen when implementing CRM strategy.Make sure the process for identifying the critical resources needed to implement strategy includes allthe stakeholders that manage these before we give any funding for CRM projects except you have aprocess in place to manage strategic implementations.

• Build a business case and accidents for CRM because it’s important to define the benefits you expectto achieve CRM benefit and ensure that measurement systems are developed to track yourperformance. Last, review your current CRM implementation projects.

Reference:Customer Contact Transformation, 2007, Accenture.SAP CRM Upgrades with Accenture, 2009, Accenture.Use the Balanced Scorecard to Execute CRM Strategy, 2002, Kevin Murphy and Randy Russell,GartnerG2.CRM Case Study: Optimizing Relationships at National Australia Bank, Ltd, 2001, KathleenKhirallah, Tower Group Research Note.