A collection of observations, ruminations, predictions and random thoughts from Cornerstone Advisors.

Learn More

June 23, 2014 by Sam Kilmer Sam Kilmer

Everybody Wants Some (CRM) – How ’Bout You?

We are hearing lots of noise about Customer Relationship Management again, GonzoBankers. Feels like a Back to the Future (or maybe it’s Better Off Dead) time warp ride back to the late ’80s and early ’90s. This is the strategic equivalent of a Van Halen reunion tour – with all the amped expectations, go-it-alone solos, lead-singer tantrums, and killer-rehearsals-followed-by-cancelled-shows that go along with it. But, hey, it’s loud and it’s fun!

In tech selections, strategic planning gigs, and in industry conference hallway chats everywhere, CRM is a hot topic. And, it is showing up in the numbers. The latest Cornerstone Performance Report shows the one tech spending category on the rise is Strategic Systems, which includes CRM, its nerdy George McFly cousin BI (business intelligence), and other scrappy acronyms like LOS, ECM and ERM. Spending in this category is rising to rival core systems spending, which continues its spending descent. If CEOs and EVPs don’t have these acronym apps in place already, they increasingly want them PDQ or ASAP. Competitive pricing pressure, regulatory scrutiny on fee income, and new industry product disrupters are combining to place a higher premium on the relationships that CRM aims to improve. (“Aims” is the operative word.)

More than 80% of bank and credit union executives report that customer intimacy is their differentiator anyway, right? And they all really mean it, right? Sure they do. As my Gonzo colleague Jim Burson pointed out in our “Strategic Planning is Broken” Webinar (access the playback), many of these lip service claims need to be challenged. Which reminds me of one of the better speeches I have seen over the years, and from the Van Halen era no less: a fatigued CMO gave a post-mortem on why a CRM “sales culture” initiative failed at his bank. Autopsy results: The CEO who initially championed it after a conference caved when it was actually go time. Sound familiar? Regardless of whether it was the CEO (or maybe an overzealous CMO), the real lesson here is it didn’t work, and leadership was the problem, not tech.

Fast forward, we do see more GonzoBankers getting serious about relationship service efforts and keeping it real. Some have even gone so far as to name new czars (e.g., the Chief Experience Officer) to tackle the project. Beyond some tweaks here and there from core providers and traditional industry CRM system vendors, some other names in the news have been interesting, including:

  • Dealertrack acquired Customer Focused Marketing and DealerCEO to embed more CRM and marketing process into lending.
  • Ellie Mae acquired MortgageCEO to embed CRM into its mortgage lending.
  • Merkle (a CRM agency) acquired New Control (BI direct marketing) and earlier Brilig (online ad data), 5th finger (mobile advertising), IMPAQT (search marketing) and Social Amp (social).
  • Salesforce.com acquired Exact Target (BI) and earlier Radian6 (social). And, Salesforce and LOS vendor nCino have been talking up their industry partnership.
  • Microsoft (Dynamics CRM) acquired Parature (self-service) and Netbreeze (social). Microsoft and Fiserv have been talking up their Enact industry partnership and beyond core clients.

I’m sure I missed some, but are you getting the picture here?

As financial institutions consider launching or reinvigorating their CRM efforts, here are four considerations recently learned from the banking trenches:

  • Service Trumps Sales. Most banking interactions are with existing customers, so it is more important that a system excel at a call center debit card replacement or commercial loan renewal than it is to handle the branch-walk-in-prospect-off-the-street, which seems to be the running CRM demo favorite. As you plan for CRM demos, ask for specific, detailed service examples to keep the noise level on the BS meter low.

Some of the better credit union CRM implementations we have seen took this into account or had strong CEO leadership behind the service culture driving employee adoption.

  • Integration Trumps Functionality. 80% of CRM system demos is functionality but 80% of the tech success is data and process integration. If you are a generalist community institution, a CRM system integrated from your core vendor may be a logical way to go. If you are a niche mortgage or commercial bank, CRM capabilities integrated from an LOS provider may be another good way to go. Integration is essential, and it’s the main reason why horizontal CRM tools like Microsoft and Salesforce haven’t made more inroads in small-midsize shops. Start by charting out your most common customer processes and integration (or lack thereof) points. Hey, maybe it’s not even a CRM system that ultimately tackles your CRM need.
  • Social + Mobile Trumps the Future? While Salesforce and Dynamics lack integration with many origination and core systems, they do have social capabilities, and their apps cross mobile phones and tablets as well as traditional PCs. As branch visits decline and outreach becomes even more important, social and mobile CRM could be essential. For example, Salesforce recently announced a mobile app SOS button similar to Amazon’s Mayday. Push for more capabilities here.
  • Business Model and Commitment Trump Everything. Organizational alignment behind a CRM initiative is essential. Marketing or IT cannot drive this departmentally. The initiative needs care and feeding from the Strategic Planning process, and the CEO needs to be personally involved. And, by the way, actual system usage is the currency of buy-in. If everybody from the C-level to the front line does not exhibit active usage (every day), then the organizational commitment really isn’t there. CRM is in the “Strategic Systems” category for a reason. One thought is to address your very highest value customers first when launching such an initiative. It’s probably no accident that several of the more publicly positive bank CRM implementations started with wealth management or commercial units. Failure is not an option.


May your CRM anguish be low, your Net Promoter Score be high, and your summer be a good one!

Ready to get serious (again) about CRM?

Whether you’re starting from scratch or evaluating how your existing CRM system could be utilized more effectively, Cornerstone Advisors is at your service.

Cornerstone has helped hundreds of financial institutions assess their technology, strategically maximize their technology solutions, and make educated decisions when it’s time to make technology changes.

Contact us today to talk about realizing the greatest return on your technology dollars.


Print This Post

5 Responses to “Everybody Wants Some (CRM) – How ’Bout You?”

  1. Brad Hodson says:

    You’re right on with the trends. Service is way more important than sales because great service sells.

    Especially in the banking circle, excellent customer service where you feel like the bank cares about you personally is nigh impossible to find. The only place I’ve found it for me and my family has been with Simple, because they do an amazing job servicing their customers as quickly, completely, and personally as possible.

    It’s this kind of work that comes from both a strong customer-centric culture and integrated CRM that helps them keep track of it all and build a stronger customer base.

    Not every CRM will be a good fit, especially in the financial sector, but sometimes you can break the mold of “bank CRM” with a simpler solution that will both fit your needs and provide you enough customization to satisfy specific requirements.

  2. Have banks thought about what they will say to customers when they achieve a fabled 360-degree view? Is the retail model really relevant to banking? Retailers offer thousands of items, in shoes alone at some stores. What do banks offer? Checking, savings, CDs, credit cards, mortgages, auto loans — how many of those are in play at any given time? If mobile users check their accounts almost daily, as some suggest, what does a bank have to say to them? So much customer information, so little to offer. Unless like Moven and Simple, banks are willing to help customers save and control their finances, rather than just try to sell more products.

    • Sam Kilmer Sam Kilmer says:

      Tom, Surely many don’t know what to say with a total view in place, but knowing, listening, and executing on the info is even more important anyway. And, along with Brad’s point about culture, I’ll re-emphasize “Service Trumps Sales”.

  3. Jim Wells says:

    Just about the time I think a counter-productive practice has gone away, I find it being advocated.

    I’d like to submit that in this era of “always-on & always-accessible,” financial institutions might want to consider replacing CRM (Customer Relationship Management) with CMR (Customer-Managed Relationships). Instead of trying manipulate customers into relationships, products, services & activities that your institution wants, how ‘bout informing your customers that you are empowering them to design the relationship with your institution that they want?

    Community banks and credit unions will hopefully remember this concept and recognize it as a hallmark of the way they used to operate. They may also recognize that it can act as a key differentiator in recapturing market share from the ‘Too Big To Behave’ Banks, that are busy closing branches, hiking fees & charges, distancing themselves from personal contacts, and reducing customer choices.

    • Sam Kilmer Sam Kilmer says:

      Jim, I hear you on recapture from TBTF, big time. And, “Service Trumps Sales” says relationships should benefit both customer and FI. As to customer-design-control, CRM and self-service integration may help. I find that banks increasingly want to document and verify interactions (not just transactions) and follow-up. And, I believe FI’s increasingly need unique sustainable positions (“Business Model Trumps Everything”), and that may not mean the pursuit of customers building anything they want.

Leave a Reply

Time limit is exhausted. Please reload CAPTCHA.