Practical Thoughts on CRM

For credit unions, the ability to store and mine key member information and locate unseen opportunities has never been better. This is due, in part, to CRM (Customer Relationship Management) technology. The CRM acronym is used to describe any number of business practices and database applications designed to help credit unions manage their customer relationships more efficiently. The idea behind CRM is that by interacting with customers in a number of different ways, credit unions can better understand how a customer wants to be treated, what services they need or want, and act on that knowledge. Now into the second full year of IT focus away from Y2K, credit unions are beginning to invest the resources to make the full promise of CRM a reality. However, sorting through all of the accumulated data can be a real challenge. The idea of potentially impacting every member experience - personal or self-service, bricks or clicks - may sound overwhelming. CRM is not simply about more user-friendly technology for members and employees, or a better back-end data warehouse or data mart technology. The key ingredient that seems to be missing in much of the CRM technology is the ability to connect the front and back-ends, so that member interactions can be managed. One Tower Group leading research expert refers to this area of technology as Customer Interaction Management. Likened to the financial institution's equivalent of NASA's Mission Control, Customer Interaction Management relates to every interaction with a customer. The financial institution with a CRM strategy should constantly focus on the type of experience it wants the member to have and the message it wants to send. And by "message," Tower Group experts mean more than the direct marketing message push of the 80s and 90s. The message relates to perceived service quality, helpfulness of the organization and brand image. In early 2000, some industry technologists researched whether such CRM requirements as consistency, flexibility, communications and monitoring could be accomplished using a single, turnkey functional data mart and a relatively simple information exchange protocol. Researchers focused their efforts on the exchange of information between the data mart and various front-end systems, such as the employee platform, Internet banking, telephone banking and ATM. Data warehouse deployments routinely use data marts and production databases to leverage other applications anyway, so the thought was to see whether a widely used data mart application, such as an MCIF system, could be expanded or modified to achieve the aforementioned CRM tasks. To date, results have been very promising, and some in the industry believe that Customer Interaction Management will be the glue that connects credit unions' knowledge with the member experience. It is not intended to be a silver bullet, but an enabler. The argument for Customer Interaction Management based on a turnkey MCIF platform is one based on economics, integration, and stability. First, the investment needed to acquire and maintain an MCIF platform is relatively low compared to data warehousing and many other related applications. Second, MCIF is the only known data mart application that integrates the householding, profitability, statistical modeling, and campaign management tools necessary to manage interactions in both a knowledgeable and profitable manner. Automated statistical modeling is nearly essential in managing interactions because, unlike with point-in-time campaign management, the member relationship and interactions are constantly changing. Without the modeling to help a credit union recognize patterns in member behavior, there is simply too much data to make an effective analysis. Third, the MCIF has gained a reputation for stability precisely because of its data model and focused tool set. For a technology to assist in driving the member experience, it must be stable. With the development of an MCIF-based Customer Interaction Management technology, much has already been learned. Integrating all channels seems to be a critical step away from traditional "push" campaign management, which has traditionally focused on one channel at a time, such as the employee platform or the Internet. For example, if a member stops by a CU lobby to cash a check and turns down a personal plea to open a car loan, the offer doesn't need to be repeated if the member signs onto the Internet to check a balance later that day. Moreover, the results of statistical modeling might have already suggested this member is not a likely candidate for a profitable auto loan, but rather a high-potential member most likely to close all accounts - which might call for a member survey or personal follow-up. This knowledge, in combination with the ability to act using all delivery channels and track results, can drastically improve the credit union's ability to address individual member needs. Though Customer Interaction Management as a turnkey technology is in its infancy, it holds the promise of moving CRM from buzzword-acronym to a near-term-reality in credit unions of all sizes.