Financial services still struggling with CRM investments

Australia's financial services industry is still struggling to capitalize on its multimillion-dollar CRM installations.

Hydrasight research director John Brand said most financial firms are yet to witness real business change in relation to CRM usage as they are still focusing on data collection, data quality or data integration.

"The big problem we see in CRM implementations in the banking industry is that there's little difference when it comes to the customer perspective," Brand said.

"If you asked a customer to rank their bank [in dealing with them before and post-CRM implementation] you will see very little positive, and more often than not, much greater negative views that customers hold.

"Not all of this can be attributed to a CRM system itself though as the business practices of the bank have a lot to do with customer perceptions too. All the technology in the world is unlikely to be able to improve those."

But the technology doesn't always stack up either, with the traditional leaders in this market segment not embracing sales process technology.

Mark Parker, managing director of CRM provider, Salesnet Australia, said one hurdle is finding a CRM solution that is capable of reinforcing best practice and can be tailored to fit the business, rather than having to shift the business to fit the software.

Parker said the commercial lending segment is a classic example of this phenomenon where banks have seen sweeping changes and loss of market share resulting from the emergence of new players with sophisticated sales and marketing strategies.

"Most of the chief sales officers we talk to understand Pareto's Principle (the 80-20 Rule) and acknowledge that 80 percent of their sales come from 20 percent of their sales team. The real issue for them is they don't have the right technology to standardize their sales and service practices to those of their top performers," Parker said.

"They know growth is being eroded by newer and more agile competitors."

The goal is to maximize vast amounts of customer information to create more effective sales cycles, a resource often untapped.

Craig Henshaw, director of specialist banking consultancy Practical Impact, said even though banks have invested heavily in CRM software, it has little value without creating the right sales processes.

"Sales people are a particular breed and there are two distinct types. The 'hunters' are intuitive, arrogant and often neurotic who zoom in on their kill and then move on, whereas the 'farmers' befriend the customer and build long-term relationships," Henshaw said.

"The key is to find a way to manage and reward the hunters and farmers differently and to create a structure that capitalizes on the strengths of both types and then train them accordingly. Few are prepared to overcome the political obstacles to solve this."

Frost & Sullivan research director Foad Fadaghi wasn't as critical, claiming banks are sophisticated users of CRM.

"Banks can afford to train and invest in systems to increase customer satisfaction and in adequate workflows within CRM tools," he said.

"The key element to an effective CRM system is an established workflow regime, the issue dogging a lot of first generation CRM implementations."

The Commonwealth Bank of Australia has been engaged in a massive $1.5 billion IT transformation project set to be completed this year.

It includes the implementation of a customer service platform, or CommSee, to deliver a single version of the truth.

CBA IT manager Peter Reynolds said it isn't just about CRM, but an entire platform.

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