Morgan Stanley gets closer to customers with CRM

Back in the pre-World War II era, store owners had ready means of gaining detailed knowledge of their customers and their buying habits. Although the growth of mass marketing and the mass production of goods has slowly distanced that relationship, technology -- and customer relationship management (CRM) software in particular -- could allow companies to restore that connection with customers.

"The customer is so clearly in charge today," Tony LoFrumento, executive vice president of CRM at Morgan Stanley, told attendees at Computerworld US's Premier 100 conference this week. When LoFrumento joined the New York-based financial services firm's retail organization in 2001, his mission was to implement a world-class CRM infrastructure and environment. Morgan Stanley's Individual Investor Group in the U.S. consists of 13,000 financial advisers and services some 5.6 million client accounts with US$595 billion in assets.

In a commodity business such as financial services, being able to distinguish itself from competitors is critical for Morgan Stanley, LoFrumento said, and CRM has been a key part of reaching that goal. "We separate ourselves by understanding clients and meeting and exceeding their needs," he said. "We're doing that through CRM."

The three main goals of the project were to acquire targeted clients, gain more business from each customer and retain those highly valued customers who do the most business with the firm, said LoFrumento.

In tackling the CRM project, LoFrumento said he first addressed the analytical components of the strategy, such as business intelligence, data mining and campaign management. The next step, which LoFrumento is tackling now, is to look at the operations side of the strategy, including call center and contact management.

The CRM project pulls client data into one place and makes it available to departments within the firm to support clients. LoFrumento approached the project by first identifying the data needed, locking in IT support, enhancing the CRM data mart, recruiting staff and then selecting vendors. "We wanted to go with someone that would be a leader into the next decade," said LoFrumento.

He chose SAS Institute Inc. and Business Objects SA as key project partners.

Morgan Stanley's financial advisers can now get a 360-degree view of each client through a menu of reports accessed via the company intranet and can sort that data in myriad ways. Because 5 percent of Morgan Stanley's clients generate 95 percent of revenue, LoFrumento said, the CRM technology allows branch managers to do predictive modeling and shift the mix of services to those high-value customers.

"There's tons more detail, and we now have the ability to drill into that data to help the product marketing group plan the next campaign," he said. "The campaigns get smarter."

Data accuracy is essential. "When you're dealing with dirty data, you're not moving the bar forward at all," said LoFrumento. Currently, Morgan Stanley contracts with an outside firm to scrub its data, although that function might eventually be pulled in-house.

LoFrumento also recounted his experience on Sept. 11, 2001, when the IT team was attending a ribbon-cutting ceremony for a new 11-server configuration. Morgan Stanley's CRM group, IT support and IT systems were all housed in Tower 2 of the World Trade Center. LoFrumento said six of the company's 5,000 employees in the building, including two security guards who were helping others to escape, died on that day. After the disaster, LoFrumento said he learned "how you have to get back on your feet," and a little over two months later, the CRM project was back on track in a new building.

The key to a successful CRM initiative, he said, is an openness to change. "If you're not committed to being a client-centric organization, you're not going to get there."