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Quick Low-Cost CRM Tips to Use Now
Answer: by Jeremy Bachmann


Question: My community bank has interest in starting a customer relationship management (CRM) program. All the providers we've brought in to speak with us, however, give us estimates that are way out of our budget. Our board is unwilling to spend that kind of money given the highly publicized CRM failures and cuts in IT budgets. Is there a less expensive way to get this project off the ground?

Answer: You've noticed what a lot of others have, too. CRM can be expensive. Gartner Group has found that firms underestimate the costs of CRM implementations by 40% to 75% over five years. There are technology, training, labor, and consulting costs associated with it. Conventional CRM implementation costs often run above $10,000 per user.

Such numbers are likely unrealistic for many small banks. But, there are ways you can reap the benefits of a CRM program without breaking your bank.

  1. Get your customer databases in order first. A CRM system is only as good as the customer data contained within it. Before purchasing a CRM system, audit your bank's databases. Consolidate them, where possible. Once customer records from around the bank are in one place, have a database administrator clean up the database by removing redundant records and pointing out to business users the gaping holes in critical areas. We've noticed that incorrect and missing phone numbers are often the first sore point. Linking business and personal accounts to the same user is also a common challenge.


  2. Develop processes and training for adding customer information. Every contact with a customer is an opportunity to learn more about needs. Train tellers, loan reps, call center employees, the person who answers the email, and even the IT administrator who collects the website logs to share what they've learned about individual customers. Help them know what information is important to collect and how to infer product fits from customer conversations.


  3. Get the buy-in and participation of executives, branch managers and loan reps on the role of collecting customer information. In a rush to implement a program, some banks wave a carrot and stick simultaneously. One group of sales managers wave a big stick at any employee who doesn't enter customer information daily, while another bribes employees with contests and bounties to stimulate


  4. Investigate low-cost implementations. Salesforce.com starts at about $65 per user per month. Enterprise-wide ACT and Goldmine implementations can help get employees accustomed to thinking about the customer from a customer needs perspective, instead of a product perspective. Furthermore, this applications can be rolled out cost effectively to a few users at a time.
As you can see, the first two tips have nothing to do with CRM software per se. Why? Because CRM is first and foremost a business strategy and not a technology. Tips #1 through #3 are mandatory for a successful CRM program, yet many banks have jumped in with the technology first. At Espenschied-Bachmann Group, we recommend that, before you go through an extensive search for CRM technology, you take the steps to move your bank in a direction to truly profit from it.



Jeremy Bachmann is a principal and cofounder of Espenschied-Bachmann Group, Inc., a full-service e-business solutions provider to financial institutions. He can be reached at (818) 438-5316 or at jeremy@e-bgroup.com for questions and comments on getting your CRM program off the ground.

First published on BankersOnline.com 8/12/02
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