Executive interview: Gerd Schenkel, GM, Customer Strategy & Cross Marketing, NAB

Australian Banking & Finance, June 15, 2006 by Paul Bartholomew

Gerd Schenkel joined National Australia Bank as general manager, Customer Strategy & Cross Marketing in 2005 from Citigroup where he was director of Strategy & Business Development for Australia. Before this Schenkel was head of Strategy, Development & Implementation for BankWests Business & Corporate Bank. He is responsible for NABs customer relationship management (CRM) capability, where the emphasis is on analytical CRM. Schenkel tells East & Partners senior consultant Paul Bartholomew about the role CRM plays within the Bank and how it can be leveraged to create opportunities in Australias competitive business banking markets.

Customer Relationship Management (CRM) has been a buzzword for many years now but has had mixed success. Why do you think this has been the case?

I think the emphasis might have been too much on technology and installations of technology as opposed to the words customer relationship management. The word is not technology installation; as a bank, customer relationship management is our lifeblood and the National has always been a relationship bank, so therefore technology is important for us to support the business strategy but it by no means replaces it. So CRM is a positive term at National Australia Bank but the more important term is customer and relationship and service, which is obviously much broader.

go how does CRM really impact what goes on at the coalface?

CRM is a broad term but if I can talk about our National Leads system. It essentially looks at our customer database every night and applies a number of algorithms to that data and the objective is to find sales and service opportunities that fit with our customer offerings. These opportunities are presented to the banker the next day through Siebel which is their primary workflow tool and bankers will then pick up those opportunities and act on them. They might not necessarily do anything, or they might say this is a great idea, I had no idea this happened. For instance, a customer might make a very big deposit the day before so a banker might consider that a very big opportunity to talk to the customer about retirement planning, or about investing this money in a better way. So then they can pick up the phone and speak with the customer and the customer hopefully has a good experience. Were very big on measurement and tracking; the banker then gives us feedback on how this conversation went and a key measure for us is the positive outcome rate, so if a banker feels the conversation was positive, this is a success event for us.

Does positive mean you've made a sale or that you're close to making one?

It doesnt mean necessarily a sale; it could simply mean the customer appreciated the call. They might tell us they already have plans for the money but that it is good to hear from us anyway. Often it can lead to other opportunities and customers appreciate us being proactive. They dont want us to ring up and offer another credit card but they do appreciate us calling with something specific about them and their accounts, then they realise its not a broadcast campaign but an honest attempt to add value to their business or their lives. Thats when we get positive feedback and eventually that leads to sales; it might not be at that moment, but next time the customer thinks of a banking decision they'll think a bit more positively about the NAB so we track the positive outcome rate more than anything. We also track sales and all these other things but I find the positive outcome is the most appropriate measure because it could be a simple service call where you might say we've noticed that youve been with us 20 years today, thanks for your business. Customers like to be recognised for the contribution they make to our business and we can use the system for that, for instance.

How do you go about turning the data captured by the Banks CRM system into usable insight that an RM can use to create sales?

We have a team that sifts through the overnight data, applying algorithms and looking for opportunities which create insight, but thats only half the story. The other part of it is the banker looking at these opportunities and overlaying their knowledge and experience and understanding of how each specific customer likes to be dealt with. Together, they give insight and then action normally comes from the banker where they call the customer with a particular offer or proposal. Its fascinating listening to people make these calls. Its a very important skill and the way they think about learning from each other in making these phone calls attractive to customers is quite amazing. All we can do is give them the first prompt, the first bit of insight and they have to pick that up and add a human element to it. Were not aiming to have an automated bank here, it'll never happen, its a human to human business.

Are there different CRM applications for the consumer and business banking markets?

There are big differences in how CRM gets applied, not just between retail and business but also within business and within the customer sets. There's a very complex hierarchy of channels, customers and types of opportunities we generate and depending on the rules we set, the opportunity is sent to a banker or it might be sent directly to the customer via mail, or it might go to the customer directly via an outbound call centre. The system mostly fits in with the sales model, so in areas where the relationship manager is at the centre of the relationship its geared around the RM; we dont go around the RM or against them, all that would do would take us out of the equation; were here to support the relationship manager. Were spending more and more time and effort on understanding what works for the relationship managers and how they do business with their customers and its different by segment. So things that dont work, we change or turn off and things that do work we do more of. The relationship managers tell us which is fantastic so that feedback loop from them is very important and weve recently increased our efforts there.