Five Sales/CRM/Service Initiatives for a Strange Year

“They usually have two tellers in my local bank, except when it’s very busy, when they have one.” –Rita Rudner

Has anybody noticed all the emails popping up lately advertising research about banks, customer buying habits, customer service perceptions, bank investments in CRM, best practices in sales, etc. – all for sale and sure to help you improve performance?

Well, here in Gonzoburg, we’re not being left out of the picture by any means. Oh, no. To get into the research fray, we have conducted a rigorous, extensive, scientific, control group-based research project examining financial institution sales, service and CRM strategies (in other words, here’s what we have heard from everybody we have talked to lately).

Our summary findings:

Percentage of financial institutions with a service differentiation strategy	99.999%
Percentage of FIs with a service culture that is a competitive advantage	99.998%
Percentage of FIs that are migrating from an order-taking culture to a sales culture	99.997%
Percentage of FIs that have made an investment in sales/CRM systems to support this strategy	99.996%
Percentage of FIs that are focused on relationships, not accounts or transactions	99.995%
Percentage of FIs that will win with a compelling customer value proposition, not price, in the long-term	99.994%
Percentage of FIs that think they will get to invest more money in sales/CRM systems in 2009 given the current economic climate	.001%
Percentage of FIs that say, “Well, we tried to build a service culture but the truth is, our service really isn?t as good everybody else’s.”	.0001%
Percentage of FIs that say, “Oh, forget service and value. Let’s face it. If we just open our doors we’ll probably get our share of the business just on the luck of the draw.”	.00001%

 

For those of you that are statistic wonks, .00001% translates, more or less, into one guy in Facilities who just got offered an early retirement package.

OK, so maybe we might suffer a bit when the rigor of our methodology is compared to our esteemed peers. But here’s the point:

• There is a near-universal emphasis in the industry right now on building a customer experience that makes somebody want to bring all of their relationships to you.
• You have, in fact, made significant investments in systems that can track service and sales, create sales/marketing campaigns, and target specific results.
• In the ugliest, most uncertain year most any of us have ever seen, one where cost control is a matter of survival, we aren’t going to get to invest in many new systems. You need to maximize the system capabilities you already have.
• At least some of you are right – you are going to win big by executing a sales and service culture that is flat-out better than your competitors.

What many of you seem to be struggling with are the specific measurements of how well you are executing. In other words, what is the body of evidence that shows a bank has been successful in this strategy? What are good CRM campaign goals?

Certainly, there are valid measurements that are common in the industry – new core relationships, products/services per household, customer satisfaction/net promoter scores are all statistics that can indicate sales/service progress. However, this is a year in which the focus needs to be on getting specific wins and results using the systems and programs already in place.

In our visits with clients, we’ve come across some good, focused campaigns geared toward targeted results that we want to share. Here are five specific CRM/sales goals you might want to think about for your shop if you have not already.

1. Percentage of highly profitable customers retained. If there was ever a time for everyone to put a freakin’ choke hold on your most profitable customers, this is it. What some banks have done is identify the tier of customers that represent the most profitability (90/10 rule?) and then foster a very transparent effort to keep them in place and happy. They are identified as a top-tier customer to every employee that inquires on one of their accounts. They have a relationship manager that manages the relationship. And, the bank has a report that shows not only how many of them have left, but how many of them have increased the size of the relationship.
2. Percentage of customers that have moved from one product to two or more. The overall products/services per household is a great statistic to track. Some banks have put a bit of a different spin on it and said they will track how successful they have been in taking one-product customers (not a relationship yet) to a second or third (have a relationship). This not only tracks the number of products sold to a new customer in the first meeting, it tracks how well sales and service efforts have been in getting something else from the customer who might have been with you for years. Note: indirect borrowers not in the branch footprint and similar customers are sometimes excluded from this goal.
3. The percentage of business customers who have moved their personal relationships. As obvious as this may seem, many banks cannot actually tell you what this number is. Some banks have two categories – “Business-only right now” and “Have both” – and actively track and publish the success in increasing that number. As with the other campaigns/targets, this progress is tracked and published.
4. Core account open/closed ratio. This is one statistic we track closely in our book. Believe it or not, as an industry we still, on average, close four accounts for every five we open. This not only makes no sense if a sales/service culture is working effectively, it is also plain inefficient. Some banks have said ? rightly so ? that if service is working, shouldn?t fewer people be leaving? Many have isolated core relationships (checking, savings) and targeted a reduced closure rate. Again, results public and published.
5. Percentage of customers who use multiple channels. A growing body of evidence shows that customers who use multiple channels (physical, phone, Internet, mobile) stay with you. For years, banks tried to get people to use self-service channels because it was less expensive. Now, some banks are measuring this for another reason –  customers who are as happy with the experience provided by a second channel as they are with that of their primary channel stick around. One key to this strategy is that they have front-line employees who can talk about and sell the idea of non-branch channels authoritatively.

I believe these five ideas merit consideration for a number of reasons:

• There are already banks doing them, and well.
• They are all good, pragmatic proxies for service/sales/CRM success. Which of these shouldn’t improve if you are doing things right?
• You already have, or should have, all of the systems and information you need to do any of these – i.e. no big investment needed to get results.
• They are specific enough for employees to rally around.

It’ a good year for service and CRM strategies that are less big-picture and more focused, pragmatic and specific. Come to think of it, that’s every year.
-tr

 

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