Why Financial Services Crave CRM

For Trimark Investment Management Inc., adopting a customer relationship management (CRM) strategy was all about taking service to the next step. “We’d reached a point with our call centre [where] we couldn’t measure a lot of things or take services to the next level,” says Susan Sawni, vice-president of consumer marketing for Trimark in Toronto.

To understand how CRM can improve service, it’s necessary to first understand what exactly CRM is. According to Cameron Dow, the manager of Canadian software research for Toronto-based IDC Canada Ltd., “CRM is a business strategy designed to acquire and retain the right customer. It’s a business strategy, not a technology.”

However, it’s enabled by technology. “The software is the touch-point in customer-facing applications,” he says, explaining the idea is to have “full knowledge of a customer and the customer’s activities,” and to integrate that across all the channels a customer may use to deal with a company — whether that’s in person at a branch office, on the phone, via e-mail or a Web site, for instance.

Financial services companies are particularly interested in CRM, due to growing competition in that market place, says Lori Nave, vice-president of corporate marketing for CRM software vendor Janna Systems Inc. in Toronto. “It’s really intensely competitive for customers and the margins are shrinking,” she says.

Linda Solakis, Trimark’s assistant vice-president of information systems, defines CRM as “a comprehensive approach that provides seamless integration of every area of business that touches the customer — namely marketing, sales and customer service — through the integration of people, processes and technology.

“CRM creates a mutually beneficial relationship with our customers,” she adds.

The key components, she says, include: identifying customers, differentiating customers, interacting with customers, and customizing products and services. “Almost 100 per cent of our touch points to our financial advisors are captured in our CRM system, being inbound/outbound calls to/from sales and our call centre, sales visits, Web and inbound/outbound e-mail and inbound calls to our IVR (interactive voice response) system.”

Establishing Relationships

At Trimark, the company wanted to move to a relationship, rather than a transactional model, Sawni says. “Each transaction was top-notch, but we were missing out on leveraging past experiences to enhance customer satisfaction.”

There are about 200 people working in the Trimark call centre, dealing with between 5,000 and 6,000 calls per day — primarily from financial advisors. A CRM pilot was rolled out in the fall of 1997 to about 20 people in the call centre. By spring 1998, Trimark implemented the CRM system based on technology from Vantive Corp., a company recently acquired by PeopleSoft Inc. Call centre workers record each interaction with the customer, identified by dealer rep number. It helps “supervise the interaction with the individual,” Sawni says. For instance, she says, if one dealer always calls with a problem associated with redemption paperwork, rather than just working through the problem, Trimark can offer to provide back-office training on that process.

Last November, Trimark’s 90 sales service department employees were also tied into the system. “We’re working to automate the opportunity for them,” Solakis says. The call centre can “flag a whole case and push into an inbox for a sales person.”

And the company is already integrating its Web site with the call centre, by providing a “call me now” button on the site. Financial advisors or customers using the Web site will be phoned by a call centre representative, who will be able to see where they are in the Web site, and perhaps assist in filling out on-line applications. “It’s very interactive,” she says.

Trimark is in the process of integrating e-mail too, so that every piece of e-mail exchanged with the customer will be “part of the enterprise-wide system and viewable in the context of all the other interactions,” Sawni says. Vantive provides the database technology, as well as call centre and sales modules, and the Web component is enabled by Cisco Systems Inc.’s WebLine technology. More than one million cases are reportedly now logged in the database.

Better Decision-Making

CRM is “a very important element of our business,” says Naj Hirani, CIO and vice-president of information systems and technology for Spectrum United Mutual Funds Inc. “If implemented correctly, it enables you to look at the business from a current point of view, but also how to build the business from a forward point of view. It enables you to look at information and make decisions based on what influences the business today.”

Toronto-based Spectrum distributes its funds primarily through thousands of third-party brokers, planners and financial advisors. In 1998, the company implemented a CRM solution in the form of Janna Systems Inc.’s Janna Contact Enterprise product that can be accessed by about 13 in-house sales support people and 20 mobile sales staff.

“We want to be top of mind with distributors.” He says there’s a lot of customization available, depending, for instance, on the location of the sales people. They can see what kind of funds have been bought over time, and the commissions the advisors have received. More than that, they can see what sort of dealings the local advisors may have had by phone with the internal sales department.

Meanwhile, those sales reps also make notes in the Janna system. Hirani says Spectrum is currently evaluating a potential Web component to the system.

The e-Customer

“CRM is absolutely anything that speaks to the relationship with the customer. It has to do with levels of service, feelings of security, priority and importance,” says Ken Wong, professor of marketing and business strategy for Queen’s School of Business in Kingston, Ont. Financial services companies were some of the first to adopt CRM, he notes, because they’re no longer marketing transactions, they’re selling a “sense of security and well-being” associated with the brand equity.

“That’s part of why banks and financial services are so interested in this area,” he says, adding banks have to combat the feeling that banks don’t care about their customers. “CRM is as much a marketing tool as anything else.”

At Spectrum, the CRM database includes a degree of personal information, including customers’ birthdays and hobbies. “We’re building a relationship with them,” Hirani says.

Businesses are moving from being focused on transactions, mass marketing and being product-centric, to being customer-centric and offering mass customization, says Trimark’s Solakis. A new e-customer is emerging, she says, one that’s empowered, and one that expects constant access to companies, whether that is via e-mail, phone, fax or the Web. Those users “demand immediate response and a personalized touch,” she says.

The New e-Service

For users of financial services, “there’s more choice than ever before,” says Nave of Janna Systems. Pricing on Internet trades are dropping from $50 to $15 per trade, “but customer expectations for service aren’t coming down,” she says. “Customers want to be treated as an individual when they’re transacting with the company.” Meanwhile, financial companies are trying to “personalize the customer experience.”

And it doesn’t matter how the customer approaches the company, whether it’s via the Web, in person, or by phone. “Companies should offer the same level of support to customers regardless of the channel they choose,” Nave says.

“Customers can interact with [a] bank in a number of different ways,” IDC Canada’s Dow agrees. But at companies without CRM strategies, “the right hand doesn’t know what the rest of the bank is doing,” including banking, brokerage or credit divisions. For instance, if a customer misses a VISA payment, the credit card division may not know this person is a “high wealth” individual. Rather than telling off the client for missing a payment, a well-informed bank would opt to “treat them appropriately,” Dow says.

Of note, Dow says banks and financial services companies are no longer talking about their share of the market, but are instead looking at their “share of a customer. They want 100 per cent of the wallet.” And more specifically, that has to be the “right customer.”

Trimark’s CRM system “increases the speed of resolving customer problems,” Sawni says. About 90 per cent of inbound calls are reportedly resolved during the first call, while another two per cent are resolved within the following hour. (Trimark didn’t have access to that information prior to its CRM implementation.) For complex queries, the company provides a guarantee of service within 24 hours; the average response time is more like 12 hours, she says.

Two times so far, the company has used its CRM data to enhance its Web site ( http://fa.trimark.com), customizing products and services. “The fact that we’ve done it twice exemplifies that it’s an iterative or ongoing process,” Sawni says.

But the company expects even more from its CRM system. “The possibilities are endless,” Sawni says. She suggests customers could start to input their own cases on the Web site, and track on-line how the resolution to their cases is progressing. Company employees who have live access to information can “do a better job of servicing the customer. We hope to have a 360-degree view. We can identify different customer groups and differentiate between them, not treat them en masse.”

Andersen Consulting recently surveyed 200 executives and 250 consumers, and while the survey spanned various industries, it reported, for instance, there is a gap between Web capabilities and customer expectations. For example, 83 per cent of customers reported they’d like to check the status of their orders or accounts on-line, while only 19 per cent of sites reportedly have that capability.

Jerry Garcia, a partner with Andersen Consulting’s communications and high-tech group, points to banks finding success with CRM, namely Canada Trust for providing high levels of service. When customers go into branches, tellers will turn their terminal screens and show relevant charts and data with “high graphic content…and a high level of personalization,” he notes. And Royal Bank has “the ability to cross-sell and upsell to Canadians,” he says. “They have a good relationship with customers. They find out their needs and match those to their products.”

Deregulation is having an impact on the financial services industry. “Banks are offering insurance, and insurance companies are acting more like banks, selling mutual funds or mortgages,” IDC’s Dow says. Meanwhile, foreign companies are playing bigger roles in the Canadian market.

It’s important for Canadian financial services to be ultra-competitive, Andersen Consulting’s Garcia says, as it’s “very easy” for American trading firms or other financial services to set up in this country. And when clients evaluate customer service, they’re not comparing Canadian companies against other local firms; they’re considering service levels from the biggest of the big, including Amazon, Dell, Cisco or FedEx.

“Almost everyone has a story about bad customer relations. This is a wake-up call for the Canadian industry,” Garcia says.

Priorities for Financial Services

A research brief last December published by Newton, Mass.-based Meridien Research Inc. outlined the top strategic technology initiatives for retail financial services companies. They included “keeping the commissioned sales force plugged into CRM’s new world order and a better utilization of partner sales channels.”

Other important initiatives reported were:

    Providing better metrics for evaluating the value and success or failure of Web sites.Solving the puzzle of real-time multichannel delivery.Consolidating Internet bill payments.Providing customer identification solutions that support all channels of access.Integrating with wireless and handheld access points.

Grace Casselman is a Calgary journalist who specializes in technology reporting.