KNOW thy CUSTOMER - Company Operations

Industry Standard, The, Nov 6, 2000 by Michelle V. Rafter

Because CRM encompasses so many areas, it's easy to screw up. "If you have a broken process, CRM doesn't correct it," says Barton Goldenberg, president of ISM, a Bethesda, Md., consultancy that's worked on more than 300 CRM projects since the mid-1980s [see "Word to the Wise," page 164].

BANKING ON CUSTOMERS

Out of necessity, financial institutions such as Chase have become CRM front-runners. With brokerages and dot-com startups offering the same products banks sell to their own customers, they're being forced to market more effectively and provide better service. One way to do that is to have a better handle on who your customers are, what they want and how they prefer to do business with you. If customers have to tell their whole life story every time they sign up for a new service from the same bank, "there's no good reason for them not to take their business to an individual provider," says Jim Lekachman, a CRM VP at Fairfax, Va., consulting firm American Management Systems.

For the past two years, New York City-based Chase has been putting together an Internet-based CRM system for its retail banking division's marketing, sales and service departments. With it, Chase can segment customers by current and potential value in order to tailor marketing and customer support to their needs. Chase officials won't reveal how much they've spent on the effort, except to say it's in the millions. But the system, a Siebel platform that Chase customized, resides on the PCs of everyone from branch office sales reps to service reps in various customer call centers. "So if any [employee] in our retail side went into a customer's account, they'd see a service interaction updated immediately, regardless of whether it was input by a customer calling in, visiting a branch or sending an e-mail," says Robin Klein, a senior VP with Chase's national consumer services division.

With its CRM program, Chase mines customer data for demographics and "psychographic" profiles to determine which products and services to pitch to particular people. Say, for instance, a customer calls or sends an e-mail with a complaint. After handling the problem, a bank rep could discover through Chase's database of profiles that other customers with similar demographics and banking characteristics have investments, while this customer does not. Armed with that information, the rep could start talking up investments. "They might start off asking about [whether] you're investing for retirement or college," says Lee Mittleman, a Chase business systems director for relationship management. The system "is an indicator of where we think we'll have a higher probability of striking an interest with you."

Chase is also using the CRM system to initiate sales calls. If a customer mentions to a branch teller that he's interested in buying a house in six months, the agent can insert a flag in the system alerting a sales rep to send the customer an e-mail in three months with an offer for a home mortgage.

Is it paying off? According to Mittleman, Chase's CRM program is directly responsible for a 4 percent increase in the retention of high-net-worth customers from January to June of this year. Chase officials also credit the program with an unspecified increase in the amount of assets the bank manages for its most affluent customers.