Effective MRM Puts Business Before Technology

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In some industries including financial services customer relationship management (CRM) is an initiative that has often begun the information technology department. However, taking a technology-first approach to relationship management is a critical error, according to David Cornelius, vice president of financial services at FileNet.

"When CRM has not been the success that everyone initially thought it would have been, the cause has been directly related to a focus on the technology components of CRM, to the point where there was a loss of understanding of what the customer wants," Cornelius says. "The business benefits of CRM better service, cross selling, upselling weren't achieved, or when they were their delivery was ham-handed because the business staff hadn't bought in to the project."

Encouragingly, it is precisely the member-first focus of credit unions that gives them a leg up on other financial institutions when it comes to relationship management initiatives (which, in the context of credit unions, turns the acronym CRM into MRM, or member relationship management). "We have found, and surveys conducted by independent analysts confirm, that if you ask consumers what type of institutions they trust, credit unions are near the top," says Brian Crawford, chief marketing officer at PSCU Financial Services. "And for their part, credit unions definitely realize that they're in the relationship business as well."

Crawford adds that he has seen credit unions begin to view these relationships not only as service commitments, but also as opportunities for increased revenue. "Credit unions still want to lead with a high degree of member service, but they also want to better target products and pricing, to identify and retain desired member segments, and to direct members to additional products and more profitable relationships."

Over the past months, credit unions have been targeting the dual goals of improved member service and maximized profit from member relationships and have looked to MRM technology to help achieve these. MRM technology successes start with understanding just what relationships a member has with his or her credit union by bringing together customer data from the different systems that might support all the different business a member has and creating, at a minimum, a central customer file to be used by MRM-specific applications and other systems. Continually improving integration technologies, including open-standards languages like XML (extensible markup language), have been important components of consolidating this member information.

"A key objective from a service standpoint is to provide the member service representative (MSR) with a better picture of the member. It's a simplification, a blending of systems all into one," says Jim Major, communications director at PSCU Financial Services. Typically, MSRs will be provided at a minimum with a single portal, or gateway into the different systems. Additionally, integrating technologies can help credit unions provide this consolidated data to members as well. Whether via an in-branch kiosk or via the web, providing a member with single-point access and, ideally, single-sign on to various accounts, can be important to both increased sales and retention.

"From the members' points of view, if they can do everything they need to do in their financial lives easily and in one place, without having to authenticate themselves multiple times, it heightens the bond between them and their credit union," Major explains. "Consider if a credit union provides bill payment services via their site. The member is less likely to go to other sites, such as a utility's web site, to pay bills."

Credit unions are also using integrated MRM technology to identify new sales opportunities. Rules-based technologies can, for example, alert an MSR handling a service request that the member might be a good candidate for other credit union products.

MRM technology is also beginning to be used to provide tiered service to members. "Credit unions are working toward creating segmented service bundles," says Crawford. "For instance, credit unions have traditionally led with no fee, no minimum balance checking accounts. But that is, in effect, a subsidized service. By varying fees and balance requirements to match the life stages and expectations of members, these costs can be distributed more equitably and can help credit unions attract desired member classes."

For that degree of identification, a credit union with any volume of business will almost certainly turn to technology at some point. However, many objectives of MRM can be approached as tactical projects and can often leverage existing technologies that credit unions have.

"(MRM) technology definitely can provide you with detailed insight and business analytics into the relationship you have with members," Cornelius says. "However, it's possible to provide better service just by creating a portal to give (MSRs) an easier point of access to data from all the disparate databases that support your different books of business."

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