Deriving Value from Customer Marketing Solutions

by D. Trent Fleming, BOL Guru

No doubt, many of you have already purchased some kind of marketing CIF program, or even a CRM solution. Over the last five years, many banks have purchased such systems. Few have achieved measurable results. The motivation behind such purchases is normally quite good:

• Learn more about existing customers
• Sell more services to existing customers
• Add new customers.

All are admirable goals. In today?s highly competitive financial services industry, these three targets are critical to an institution?s success. I?ve written extensively on this issue in the past, but feel that today?s marketing blitz toward the sale of these products requires me to comment again.

The most important component of any enhanced customer information solution is the basic, or operational CIF. If this database is not in good order, any marketing efforts coming out of it will be suspect, and may even cause the bank embarrassment (10 pieces of direct mail to the same customer, solicitations to deceased customers, etc.)

In my experience, the most common problem with the operational CIF in many banks is simply that they have multiple customer records for the same customer. Some types of accounts are tied to one CIF record, some accounts to another. The result is that you don?t see the entirety of the customer?s relationship when you access one or the other of these CIF records. Cleaning this up (scrubbing, in the vernacular) is demanding work, but well worth the effort in the long run. Prior to instigating such a cleanup, be sure to identify and resolve practices that have resulted in the problem in the first place.

With the CIF database problem resolved, you can move on to more exciting things.

• First, identify the types of campaigns you?d like to run ? attract more deposits, sell more home equity loans, etc.
• Next, determine what specific information about your customers or prospects you?ll need to produce such a campaign.
• Finally, evaluate the ability of your basic CIF to store such information.

As vendors add fields to their CIF files, you may find that much of what you are looking for is already available. This evaluation is critical in determining whether you need an ancillary product or if you can simply use your existing software. The other component in this evaluation is the type of tools available to extract and format the information for use in direct marketing efforts including letters, envelopes, and e-mails ? that is, creating and fulfilling lists for a specific target audience. Again, you may find that your core software provides a report writer system with the needed functionality.

One key advantage of storing and extracting information directly from your core CIF system is that the info is always current: you don?t have to periodically download and update information on a secondary system. Of course, if your core CIF does not meet your needs, it is time to evaluate third party products. Talk to your vendor for recommendations, as well as your peers. Remember: without clear goals in mind for such a system, you will always be disappointed with the results. You will also need to commit to adequate training for your staff in the use of such programs. Your contact with customers and prospects is too important to allow ?read the manual training? as your primary method. Don?t shave pennies on training!

The bottom line is this ? you need to do a better job of identifying and marketing to your profitable customers and prospects. Whether you use your core CIF system, or a specialized CRM/MCIF product, start today so that you can retain and enhance your best customer relationships.

First published on BankersOnline.com 4/22/02