Block Financial Leverages Tax Business with CRM

BOSTON (05/26/2000) - Block Financial Corp. in Kansas City, Missouri., this week announced that it would log 5 million customer interactions by June on its new customer relationship management (CRM) system. Block's CRM system was put in place to cross-sell services among the various Block business units, which now include loan and investments services in addition to tax preparation and accounting services, according to Bryan DiGiorgio, vice president of Block Financial's customer service center.

The system went live last November, just in time for tax season and just before Block closed the deal to purchase Olde Financial Corp.

The new system, which uses eFrontOffice from Nortel Networks Clarify eBusiness Applications, a unit of Nortel Networks Corp. in Brampton, Ontario, is also aimed at customer retention, according to company officials. A 1% increase in customer retention can boost revenue by $8.5 million, a Block spokesman said.

The firm will continue to add modules this year for sales and Web customer support, a spokesman said. The company is still refining the Oracle database that houses customer interactions for all the Block business units, DiGiorgio said.

Business Imperatives

Block Financial, which grew out of H&R Block Inc.'s tax preparation business, has 1,600 financial services advisers distributed throughout 190 service centers nationwide.

"It's important to realize that we're now a diversified financial services company, not just a tax preparation service. We have to look at the customer's entire value," DiGiorgio said.

That contrasts with how Block used to operate, he said.

"Previously, we might have seen a customer who called in four times regarding an online tax product as an expense," DiGiorgio said. "But [with an expanded group of financial services], if you discover that person is now purchasing an IRA and an annuity, the customer may have moved to a higher echelon."

DiGiorgio said Block has identified several customer "touch points" - e-mail, telephone, faxes and face-to-face meetings - and wants to capture the customer interactions that come through them for storage in a single database.

Information gleaned from a CRM database can give "a company like Block an opportunity to apply metrics that enhance business and do things they may not have been able to do before," said Denis Pombriant, a senior analyst at Aberdeen Group Inc. in Boston.

Block is now "enhancing the database," DiGiorgio said.

While defining customer profiles and segmenting custo mers "by wallet share" are important issues, said analyst Stephen Diorio at IMT Strategies Inc. in Stamford, Connecticut, one of the drivers for CRM success is training customer-contact employees for different roles. Specific customer-contact people should be responsible for specific sets of custo mers, Diorio suggested.

Otherwise, he said, it's like a kids' soccer game, where all the kids go for the same ball at the same time.

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