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Home > Market Research > Financial Services > Customer Relationship Management Strategies in Financial Services: Achieving high performance and pr
Research has shown that over half of CRM projects fail to produce results whilst one in five actually damage long standing relationships. However when accompanied by appropriate training and organisational structure, CRM systems can have a significant impact on revenue. Customer Relationship Management Strategies in Financial Services: Achieving high performance and profiting from innovations in CRM is a new strategic management report providing a practical guide to the steps that are involved in successful CRM in financial services.
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Table of Contents
Table of Contents
Customer Relationship Management Strategies in Financial
Services
Achieving high performance and profiting from innovations in CRM
Executive Summary 10
The origins and rationale of relationship marketing 10
Creating value for the organisation 10
How to tackle customer defections 11
Achieving customer satisfaction through service quality 11
The implications of eCommerce for CRM 12
Avoiding the pitfalls of CRM 13
Chapter 1 The Origins and Rationale of
Customer Relationship
Management (CRM) 16
Summary 16
Introduction 16Ͻst century attitudes towards banks 18
How marketing oriented is your company? 19
Benefits of developing relationships 20
Relationship marketing versus transactional marketing 20
Eight major benefits of developing relationships 21
Long-term profitability 22
Lower costs 22
Repeat customers often cost less to service 22
Opportunities for cross-selling 22
Defection less likely 23
Employee retention 23
Family influence 23
Satisfied customers provide referrals and may be willing to pay a
price premium 24
A customer retention plan: reducing defectors and boosting retention
rates 24
Measure customer retention 24
The crude retention rate 25
The weighted retention rate 25
Ascertain defection motives 26
Price defectors 26
Market defectors 26
Are all customers the right customer? 27
Identifying profitable customers for CRM 28
First group of customers to target 30
The middle group of buyers 30
The final, less profitable, group of customers 31
Implementing relationship marketing 31
Defining the value proposition 31
Case study: First Direct 32
Meeting consumers diverse requirements 33
Delivering superior value and engaging entire organisation 33
Implications for practice 35
Demonstrating trustworthiness 36
Generalised trust 36
System trust 37
Personality based trust 37
Process based trust 37
Who owns the customer? 39
Effects of merger activity 40
The “customer is king” 41
“Everyone owns the customer” 43
Sharing information companywide is crucial to widening customer
ownership 44
How to evaluate your company’s success in offering customer satisfaction 45
Chapter 2 Creating Value for the
Organisation 48
Summary 48
Introduction 48
Developing a segmented service strategy that aims to deliver increased value
to the customer and the organisation 50
Step 2: Segment the customer base and determine segment value 52
Step 3: Identify segments’ service needs 53
Step 4: Implement segmented service strategy 55
Finalise segment service strategy plan 56
Chapter 3 How To Tackle Customer
Defections 62
Summary 62
Introduction 62
Case study: Abbey 64
Defection can be remedied 66
Possible reasons for customer defection 67
What are the factors that force customers to switch? 69
Retaining customers in a competitive business 71
Loyalty must start to count for something 72
Chapter 4 Achieving Customer Satisfaction
Through Service Quality 74
Summary 74
Introduction 74
Financial services characteristics and their implications for branding and
relationship management 75
Intangibility 75
Implications for branding 76
Inseparability 76
Implications 77
Heterogeneity 77
Implications 78
Perishability 78
Implications for branding 79
Fiduciary responsibility 79
Two-way information flows 80
Implications 80
Impact of online delivery for service concepts 81
Consumer empowerment 82
Effective separation of production and consumption 82
Service quality 83
Example: customer care at the ANZ bank 84
ANZ’s ‘Customer Service Charter’ 85
Researching service quality 88
Research objectives 89
The most common research objectives in financial services 89
Research methods 90
Regular customer surveys 90
Customer panels 90
Transaction analysis 91
Mystery customers 91
The SERVQUAL methodology 93
What to measure 93
How to measure 95
Internet customer questionnaire 99
Chapter 5 The Implications of eCommerce
for CRM 116
Summary 116
Introduction 116
How should financial firms respond? 119
Example: internal marketing at Barclays 122
How different companies are approaching eBusiness 124
The reluctant approach of a life insurance company 124
The integrated approach of a national retail banking operation 125
The focus for change in an international insurance company 125
The stand-alone Internet bank 126
Key factors in developing effective strategies for eCommerce 127
The role of senior management 127
Capabilities required in a changing environment 127
Critical success factors 128
The threat of criminal activity on eCommerce 129
Ways to help customers protect themselves against fraud 132
Chapter 6 Avoiding the Pitfalls in CRM 134
Summary 134
Introduction 134
Peril 1: Implementing CRM before creating a customer strategy 135
Example: Fidelity Investments 136
Peril 2: Rolling out CRM before changing your organisation to match 137
Peril 3: Assuming that more CRM technology is better 137
Peril 4: Stalking, not wooing customers 137
Chapter 7 Appendix 141
Example 141
Part A 141
List of Figures
Figure 1.1: First Direct customer communication preferences 33
Figure 2.2: The customer profitability matrix 49
Figure 2.3: A framework for developing a segmented service strategy that aims to deliver
increased value to the customer and the organisation 51
Figure 2.4: Market maps 51
Figure 2.5: The segment competitor profile of an insurance company 54
Figure 3.6: Consumers are more demanding than ever 63
Figure 3.7: More consumers plan to switch in the next 12 months 63
Figure 3.8: Factors that erode satisfaction and trust 71
Figure 4.9: Reasons for customer loyalty 83
Figure 5.10: Reasons for customer preference for face-to-face contact 118
Figure 5.11: Complex products sell in the branch 118
Figure 5.12: Newcastle Building Society’s virtual customer service assistant 119
Figure 6.13: The imperatives of CRM 139
Figure 6.14: The imperatives of CRM, continued 140
List of Tables
Table 1.1: The contrasts between transaction and relationship marketing 21
Table 1.2: Customer satisfaction exercise 45
Table 2.3: Customer management stage analysis, problems and opportunities 58
Table 2.4: Customer management stage analysis, problems and opportunities, continued 59
Table 4.5: A comparison of different online metric collection methods 92
Table 7.6: Dimensions of Internet banking service quality 142
Table 7.7: Expectations of an excellent online bank, Part A 143
Table 7.8: Expectations of an excellent online bank, Part A, continued 144
Table 7.9: Expectations of an excellent online bank, Part A, continued 145
Table 7.10: Expectations of an excellent online bank, Part A, continued 146
Table 7.11: Expectations of an excellent online bank, Part B 147
Table 7.12: Expectations of an excellent online bank, Part B, continued 148
Table 7.13: Expectations of an excellent online bank, Part B, continued 149
Table 7.14: Expectations of an excellent online bank, Part B, continued 150
Table 7.15: Expectations of an excellent online bank, Part B, continued 151
Table 7.16: Expectations of an excellent online bank, Part B, continued 152
For full details, please email keithw@cmsinfo.com
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