Customer Relationship Management Strategies in Financial Services: Achieving high performance and profiting from innovations in CRM

Research has shown that over half of CRM projects fail to produce results whilst one in five actually damage long standing relationships. However when accompanied by appropriate training and organisational structure, CRM systems can have a significant impact on revenue. Customer Relationship Management Strategies in Financial Services: Achieving high performance and profiting from innovations in CRM is a new strategic management report providing a practical guide to the steps that are involved in successful CRM in financial services.
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Customer Relationship Management Strategies in Financial Services
Achieving high performance and profiting from innovations in CRM
Executive Summary
The origins and rationale of relationship marketing
Creating value for the organisation
How to tackle customer defections
Achieving customer satisfaction through service quality
The implications of eCommerce for CRM
Avoiding the pitfalls of CRM

Chapter 1 The Origins and Rationale of Customer Relationship Management (CRM)

Summary
Introduction
21st century attitudes towards banks
How marketing oriented is your company?
Benefits of developing relationships
Relationship marketing versus transactional marketing
Eight major benefits of developing relationships
Long-term profitability
Lower costs
Repeat customers often cost less to service
Opportunities for cross-selling
Defection less likely
Employee retention
Family influence
Satisfied customers provide referrals and may be willing to pay a price premium
A customer retention plan: reducing defectors and boosting retention rates
Measure customer retention
The crude retention rate
The weighted retention rate
Ascertain defection motives
Price defectors
Market defectors
Are all customers the right customer?
Identifying profitable customers for CRM
First group of customers to target
The middle group of buyers
The final, less profitable, group of customers
Implementing relationship marketing
Defining the value proposition
Case study: First Direct
Meeting consumers diverse requirements
Delivering superior value and engaging entire organisation
Implications for practice
Demonstrating trustworthiness
Generalised trust
System trust
Personality based trust
Process based trust
Who owns the customer?
Effects of merger activity
The “customer is king”
“Everyone owns the customer”
Sharing information companywide is crucial to widening customer ownership
How to evaluate your company’s success in offering customer satisfaction

Chapter 2 Creating Value for the Organisation

Summary
Introduction
Developing a segmented service strategy that aims to deliver increased value
to the customer and the organisation
Step 2: Segment the customer base and determine segment value
Step 3: Identify segments’ service needs
Step 4: Implement segmented service strategy
Finalise segment service strategy plan

Chapter 3 How To Tackle Customer Defections

Summary
Introduction
Case study: Abbey
Defection can be remedied
Possible reasons for customer defection
What are the factors that force customers to switch?
Retaining customers in a competitive business
Loyalty must start to count for something

Chapter 4 Achieving Customer Satisfaction Through Service Quality

Summary
Introduction
Financial services characteristics and their implications for branding and relationship management
Intangibility
Implications for branding
Inseparability
Implications
Heterogeneity
Implications
Perishability
Implications for branding
Fiduciary responsibility
Two-way information flows
Implications
Impact of online delivery for service concepts
Consumer empowerment
Effective separation of production and consumption
Service quality
Example: customer care at the ANZ bank
ANZ’s ‘Customer Service Charter’
Researching service quality
Research objectives
The most common research objectives in financial services
Research methods
Regular customer surveys
Customer panels
Transaction analysis
Mystery customers
The SERVQUAL methodology
What to measure
How to measure
Internet customer questionnaire

Chapter 5 The Implications of eCommerce for CRM

Summary
Introduction
How should financial firms respond?
Example: internal marketing at Barclays
How different companies are approaching eBusiness
The reluctant approach of a life insurance company
The integrated approach of a national retail banking operation
The focus for change in an international insurance company
The stand-alone Internet bank
Key factors in developing effective strategies for eCommerce
The role of senior management
Capabilities required in a changing environment
Critical success factors
The threat of criminal activity on eCommerce
Ways to help customers protect themselves against fraud

Chapter 6 Avoiding the Pitfalls in CRM

Summary
Introduction
Peril 1: Implementing CRM before creating a customer strategy
Example: Fidelity Investments
Peril 2: Rolling out CRM before changing your organisation to match
Peril 3: Assuming that more CRM technology is better
Peril 4: Stalking, not wooing customers

Chapter 7 Appendix

Example
Part A
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Table 1.1: The contrasts between transaction and relationship marketing 21
Table 1.2: Customer satisfaction exercise 45
Table 2.3: Customer management stage analysis, problems and opportunities 58
Table 2.4: Customer management stage analysis, problems and opportunities, continued 59
Table 4.5: A comparison of different online metric collection methods 92
Table 7.6: Dimensions of Internet banking service quality 142
Table 7.7: Expectations of an excellent online bank, Part A 143
Table 7.8: Expectations of an excellent online bank, Part A, continued 144
Table 7.9: Expectations of an excellent online bank, Part A, continued 145
Table 7.10: Expectations of an excellent online bank, Part A, continued 146
Table 7.11: Expectations of an excellent online bank, Part B 147
Table 7.12: Expectations of an excellent online bank, Part B, continued 148
Table 7.13: Expectations of an excellent online bank, Part B, continued 149
Table 7.14: Expectations of an excellent online bank, Part B, continued 150
Table 7.15: Expectations of an excellent online bank, Part B, continued 151
Table 7.16: Expectations of an excellent online bank, Part B, continued 152

Figure 1.1: First Direct customer communication preferences 33
Figure 2.2: The customer profitability matrix 49
Figure 2.3: A framework for developing a segmented service strategy that aims to deliver increased value to the customer and the organisation 51
Figure 2.4: Market maps 51
Figure 2.5: The segment competitor profile of an insurance company 54
Figure 3.6: Consumers are more demanding than ever 63
Figure 3.7: More consumers plan to switch in the next 12 months 63
Figure 3.8: Factors that erode satisfaction and trust 71
Figure 4.9: Reasons for customer loyalty 83
Figure 5.10: Reasons for customer preference for face-to-face contact 118
Figure 5.11: Complex products sell in the branch 118
Figure 5.12: Newcastle Building Society’s virtual customer service assistant 119
Figure 6.13: The imperatives of CRM 139
Figure 6.14: The imperatives of CRM, continued 140
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