To the Editor:

It's no secret that customer service is key for banks to retain their best customers, as Charles E. Wilson, a financial services industry consultant at IBM Corp., points out.

In Laura Thompson's Sept. 22 article, "Banks Find Rewards in Special Attention to Best Customers" [page 6], Mr. Wilson observes that as banks grow bigger, they lose track of their ability to identify their "best customers." This is an obvious truth.

Banks are reevaluating the importance of customer appreciation due to profitability and revenue-growth concerns. Many banks are implementing the latest customer relationship management techniques, but solving problems of profitability means more than simply enhancing attention to customers.

If a bank cannot identify its truly profitable customers and why they are profitable, customer relationship management efforts will be misdirected. Time and again, misguided CRM efforts have destroyed shareholder value by increasing the cost to serve unprofitable customers, cross selling unprofitable products, and, even worse, annoying the most profitable customers with unwanted solicitations.

Accurate, detailed customer profitability and behavioral information driven by "best practices" profitability measurement tools is required to drive effective CRM. Focused programs built from a solid customer knowledge base will drive CRM benefits without alienating the most profitable customers, the very ones the banks should be striving to retain. Without careful evaluation of which customer qualities drive profitability, banks face the threat of losing more than profit. They stand to lose their most valuable asset - the customer.

Frank Fletcher
President, chief executive officer

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