CRM projects need a long-term view

Short-term focus on CRM (customer relationship management) initiatives leaves financial institutions struggling to achieve top and bottom-line growth through such projects, according to a market analyst.

In a survey, CRM: Objectives at a Crossroads, Meridien Research canvassed financial services firms on the state of their CRM initiatives. The analyst says consolidating and streamlining the cost structure of projects is the fastest way financial institutions have tried to achieve top and bottom-line profit growth through CRM projects over the past decade.

However, for most organizations, short-term gains have overshadowed the need for longer-term plans, the report said.

Meridien also pointed out that Wall Street had inflicted stiff penalties on companies for not producing expected results.

Consequently, “Companies have failed to thoroughly examine and overhaul customer-facing processes, even though they’re able to publicly speak about how important their relationships with customers are,” Meridien said in the report.

Commenting on the key findings of the research, Meridien analyst Tom Richards said: “Despite the rhetoric, two out of three CRM programs have concentrated on workflow improvements designed to streamline business process and reduce cost.”

He argued while these improvements are “important”, financial services providers must realize that what they do with the organization and cost structure that separates revenue from profit before tax affects not only how much revenue reaches the bottom line, but the attitudes of employees and customers who contribute the revenues to begin with.”

“Firms seem to have disregarded the direct correlation between the two,” Richards said.

Responding to Richards’ claim, Diana Brown, business innovation manager of Melbourne-based industry superannuation fund administrator Superpartners, said the key aim in any of the company’s CRM initiatives was to improve communication with the customer, ensuring the company achieves “holistic” relationships with members and employers.

She emphasized workflow improvements were always a secondary goal in Superpartners’ CRM projects, adding: “We have a total focus on project success combined with bottom line performance — a mandatory part of internal due diligence.”

According to Brown, the company has a multi-year, multi-million dollar program for CRM initiatives such as voice technology (for this fiscal year). She said Superpartners sees CRM projects as business-led projects, therefore much of the strategic focus was around business process in customer communication as well as depth and accuracy of data held on customers.

The company was not short-term focused with its CRM program, she said.