The Bankwatch

Tracking the consumer evolution of financial services

Its not about transactions, its about relationships!

Thinking about CRM some more, and a small lightbulb just went on when I read this

CRM is based on transactions between Banks and customers.  Its sole purpose as defined is to ‘drive’ revenue as we say in the business.

Well Doc says that’s not right.  What matters is the relationship between the bank and the customer.  He calls that VRM (Vendor Relationship Management).  Fascinating concept.  Get to know each other, learn to trust each other, take care of each others problems, and THEN the customer will buy something more from you.

To use banking parlance, its not about sales, its about service.  Good service will drive future sales.

 

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Written by Colin Henderson

November 16, 2006 at 23:54

Posted in Uncategorized

3 Responses

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  1. There is a rot at the heart of most CRM thinking, and VRM per se won’t solve it.

    The rot consists in justifying or evaluating any system solely based on the benefits it brings to the seller. Look at how CRM gets used: to evaluate customer profitability, to reduce call time, to enhance customer share of wallet. All that is for the benefit of the bank.

    This is called “customer focus.” In fact, it is the customer focus of a vulture.

    The difference between a vulture and truly having the customer’s best interest at heart is the difference of intent.

    If you focus on the good of the customer at the transaction level, and then occasionally step up to the relationsip level and ask “is this working for us too,” then you have something likely to generate a relationship, which in turn leads to transactions.

    If you start from the premise that all business programs must make money for the seller, and then proceed to do the classic micro-analyses that are increasingly in favor these days, you end up simply imbuing short-term selfishness into the relationship. And nobody trusts someone, or some institution, that behaves that way.

    Charles H. Green

    November 19, 2006 at 15:45

  2. Colin, I remember Virgin’s Sir Richard Branson once say that his company is focused on relationships in following order of importance:

    1) Employee
    2) Customer
    3) Shareholder

    I personally find it a nice thought to put employees first. As a customer you feel when employees are enjoying their jobs or are positive to be at their work; and that makes you feel good to. You buy an shareholders get their return on investment.

    In addtion to CRM, VRM, does something like ERM (employee relationship management) exist which is not some of corporate standard HR manual?

    david garceran nieuwenburg

    November 20, 2006 at 06:12

  3. David .. I like the Branson quote. The closest I see to ERM is Employee awards, thank you’s, gifts etc and which I find to be de-motivating when I watch their reactions. The concept to ERM is interesting.

    Colin

    November 20, 2006 at 09:06


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