The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘CRM (Customer Relationship Management)’ Category

What do customers expect of Banks?

 Ron has a deep understanding of Banks, and Bank customer research.  He discusses the Net Promoter Score, and finishes with three types of customer/bank relationships, based on his experience. 

What is interesting here is the reality that most/all Banks seek a ‘relationship’ with their customers, yet customers have different needs.  As a Bank customer, do you seek a ‘relationship’ or something different, and more practical.  Here are Ron’s three types.

  1. Interpersonal excellence
  2. Advice and guidance
  3. Operational excellence

Source: The ONE Question To Ask Customers « Marketing ROI: Whims from Ron Shevlin

The only qualification I would place here is that customers will slide between those three.  I think customers need all three, but not at any one point in time.  If they are buying a home 3. is the need, but if they inherit money, then its 2.  1. is more personal, and may apply to a group of customers just because they like/ need that.

Anyhow, I buy the point the Bank segmentation is Bank focussed, and fails to recognise how customers need Banks.


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Written by Colin Henderson

February 15, 2007 at 23:26

Update; the role of email for Banks

email and its role hit me twice in the last few minutes, so thought I would update the things I have seen lately. 

William over at VanCity asked about the role of email.

I don’t pretend to know it all, but the reading and examples I have seen, point to email as a relationship tool. Pertinent communication that is useful to the receiver. Anything marketing related at all should still meet those criteria, but always with the opt in/out preferences in the hands of the customer. I’ll do up a post with the links I have seen on this, including a good one I read just a few minutes ago.

In terms of email as a marketing/ acquisition tool, clearly the landscape has changed inexorably.  This interview with Justin Cook from BorderWare Technologies Inc covers it well, and he puts it this way:

Marketers as understanding that ‘batch and blast’ tactics just don’t produce the same return as highly relevant targeted emails ‘conversations’

He talks about email “marketing” as appropriate for subscribers, and absolutely not associated with rented lists.  He speaks about the high impact of even a small number of reported spam infractions. 

He has this advice:

  1. Ask: “Who reads or will read our marketing e-mails?”
  2.  Ask: “Do they perceive value in our e-mail content, that it can actually help them perform their job better?”
  3. Build a working opt-in process, and highlight it on every page of your website.
  4. Build a working opt-out process; make sure it’s very easy to opt out if people want to.
  5. Get authenticated.
  6. Don’t spam.

Other comments on this topic here, from the same source as above, AIMS.


Here is an even more sinister reason (phishing life threats) that emails from unknown and untrusted sources are treated with, at best, suspicion.

And, final update – this excellent post from Ron sums up email and relevance to loyalty well.

Relevance to Bankwatch:

Broadly email is accepted as a relationship tool, but hated for spam.  The implication is that either the customer opts in, or has an agreed relationship with you that implies email is acceptable.


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Written by Colin Henderson

January 17, 2007 at 16:16

Microformats as information brokers – the intelligent agents to support VRM

I have been thinking a lot about Vendor Relationship Management (VRM) over the holidays. Doc latched on the the concept as the the corollary to Customer Relationship Management (CRM). He spoke of VRM finally delivering the Cluetrain promise, and that got my attention. CRM places all the power in the hands of the vendor (Bank, telecom, retail store ) and that’s why you get annoying phone calls at dinner time, junk mail, or those annoying “can I put you on hold” comments while the poor call centre rep reads up on your history. CRM does nothing for you as a customer.

VRM is your software, you the customer. The concept (its just a concept right now) would allow you the customer to control your interactions, and effectively manage the vendors based on what you require. CRM allows vendors to manage you based on what they think you need, which is of course ludicrous.

However one of the constraints I see in the current thoughts on VRM is that it does not recognise how customers think. I would like to see this picture evolve to reflect the stages of customer purchasing. Consider your own behaviours. If you need a chocolate bar you go to the store with no thought and buy it. If you need a car, you go through stages in the purchasing process. So depending on what you need, and generally if you are buying it online, this will apply, its more than a chocolate bar purchase, and you want to control the entire process, not just the act of purchase.

Similarly for a new bank account, which is my focus here, but I hope this can be applied to VRM more generally. Brad and Cathy at Forrester have done much research on this topic, and come to realise that the web highlights the way that people think. In the old world it appears that customers walk into a Bank to buy a bank account. This doesn’t take into account the thought process and events that preceded, the discussion with family members, and friends, the picking up of brochures from several banks. In the new world, these events are exemplified on the web, including reading (brochures), discussion and email, (family and friends), web browsing (thinking).

Forrester concluded in the case of mortgage purchase there were several general steps:

We can abstract these steps into five general steps:

  1. research: sources, research product types
  2. education: the process and ways to get a loan
  3. quotes: obtain quotes, perform calculations based on the quotes. consider how it fits with customers expectations, decide what I will specifically apply for, how much, interest rate, terms required etc.
  4. apply: apply to one or more locations, and receive offers
  5. acceptance: accept one offer, and make final decision

Returning to the VRM information flow, the “request for proposal” is an amalgam of 3 & 4. In the consumers mind, these are two discreet steps. In some cases the decision will between 3 & 4 will be made almost instantaneously, but they are two separate processes. #3 is a ‘what if’ analysis, a simulation to consider life after the new service is in place (e.g., I have this great new car, but can I afford the payments, will it fit my garage, will my wife like it, etc). Whereas #4 is after the decision is made, and the consumer is ready to deal.

So thinking about how to manifest those steps online is what I have been thinking about. I recall back in the mid 90’s conjecturing during an IT strategy session, for the concept of intelligent agents, bots that would somehow (we had no idea how), scour the internet for the right service based on the customers preferences. I see VRM manifesting that concept.

Then I read some more on microformats today – (Hat tip to Read/Write, and Alex Faaborg of Mozilla) and this picture.

Link to informationBroker.jpg_large.jpg (JPEG Image, 1481×699 pixels)

The diagram is restricted to contacts, and calendar entries, but the part that caught my attention is the ‘information broker’ bit at the bottom. That information broker could represent the buying process I outlined above.

Consider the consumer who is at stage 1 of my buying process above, and he wants to buy a car. He has in mind a used model, something in the 2002 – 2004 range, and about $25,000, of which he estimates he will borrow $12,000. He instructs his financial services microformat with these facts, and as he browses, it gathers data based on his requirements. In fact, it could gather from sources without him actually visiting those sites, if he chose to instruct it accordingly.

Once he has enough information, the consumer can choose to instruct his microformat to move to stage 2, etc etc.

Part of stages 1 and 2, would include seeking advice and information from trusted social networks. Splogs need no apply, and would be blacklisted. In this view the notion of a splog black list service, similar to phishing black lists would be powerful. Trusted sources that eliminate spam/ splog information. Power would be truly transferred to the customers.

If I was a smart bank I would offer such a microformat for my customers, and it would pull in the best of breed, not necessarily my own products. Who has the nerve to try that? As a Bank I would be building trust with the consumer. If I do a good job there may be a business model there … a referral fee even?

Relevance to Bankwatch:

In this view the consumer is not restricted to Banks. Banks would have to re-architect their CRM systems to lookout for VRM requests, and recognise the stage the customer is at. But Prosper, Zopa and others will be doing the same thing, and can probably react faster than the Banks. Also, if the customer is researching (stage 1, do not press them to close the deal (stage5), or they risk losing the right to bid in future. This customer could blacklist them from their VRM tool.

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Written by Colin Henderson

January 2, 2007 at 11:20

Time to rethink the basis of marketing data

 Unfortunately for Alton he wrote this right when the need to turn the traditional paradigm on its head is becoming more and more evident

it is easy to forget about the foundation of effective marketing – have an integrated view of your customers and prospects

Source: The Marketing Consortium : Developing an Integrated View of the Customer

We have been challenging traditional marketing here for while, and very supportive of Forrester’s piece that stated Marketing is in a state of crisis.  We have also looked at CRM and it is in state of crisis, and not delivering on the promise – more here, and several posts on CRM here.

CRM is predicated on collection of customer (and prospect) data, and presenting it to the agent/ CSR with suggested next products, and magically new sales will happen.

Well I have been whining about this for a while, and highly supportive of new marketing concepts but, a nagging question, has been, what is the answer?  How do we solve this conundrum.

Last night I read Doc’s post on VRM, and this might well be the genesis of an answer.  This diagram is something they created at the IIW conference.

What I like about this picture is that it dramatically makes the point that the “foundation of effective marketing: have an integrated view” is relatively useless.  Zero in on ‘Vendor 2″ in the diagram.  Lets assume they have that “integrated view”.  Sit in their seat and look out … they have no idea what vendor 1, or vendor 3 knows, is thinking or is planning.  And more importantly they have no idea what is happening with “me” in the centre, because in this diagram the only person who knows everything is “me”.

This top of this diagram fairly accurately describes what happens even today.  “Me” gathers information from various sources, (data sources – online banking, statements, etc) and vendors (telephone marketers, junk mail, internet research) and assesses the results.  Its not as clean as that, and certainly but basically that is what happens.

VRM adds “comparison based on match quality” which could be a tool/ site/ form of broker, that assesses the offers independently and provides a selection.  This is the magic of an intelligent agent that we conjectured about in the 90’s …. an independent bot (your definition!) that is all knowing about you, but only provides enough information to vendors to get detailed quotes, that can be assessed, and a choice made.

Relevance to Bankwatch:

Back to the integrated view – the most important point is providing a capability to listen, understand, accept and make prospects an offer that they are likely to accept, within suitable timeframe, probably immediate.  Of course that hasn’t been built yet, but this is the challenge, combined with product intelligence to provide accurate offers. 


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Written by Colin Henderson

December 8, 2006 at 18:54

Doc appears to have an epiphany

 Doc seems unusually excited about VRM following IIW where he has been attending.  If he is this excited, we had better watch out!

VRM finally delivers the Cluetrain promise

Source: The Doc Searls Weblog : Thursday, December 7, 2006

I love the concept.  I have hated CRM for ever as a failed mechanism – technology (CRM) can’t possibly bring individual employees or even self service to a sufficient level to satisfy customers.

Anyhow, VRM is defined as the reciprocal of CRM.  Its the customer equivalent, which provides the tools for the customer to interact with vendors/ sellers.

This is a thread worth following and thinking about.


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Written by Colin Henderson

December 7, 2006 at 23:31

The case for OpenID |

 OpenId is a digital identity system.  It operates by keeping your identity securely with you, yet permits you to log into participating applications.  You control your identity, your information, and the degree to which your information is shared with the application.

This article explains the benefits of OpenId when compared to others in the same space.

  • OpenID is a fully decentralized system.
  • OpenID has a much lighter cost structure than any alternative.

Source: » The case for OpenID | Digital ID World |

Its an important concept.  Consider your Bank … online banking, credit card system, online brokerage, cash management system, private banking, mutual funds etc etc – all separate applications, each with their own customer authentication built into the application.  This is one (of the many) reasons that its very hard to aggregate customer information in a meaningful way that supports Customer Relationship Management for self service channels at Banks.

The concept that OpenId is the antithesis of that approach.  In an idea scenario Banks would have implemented a discrete authentication method, standalone.  That method could then support each of the various applications, including the CRM system.  It would be …. customer centric.

The concept is that by keeping the customer ID separate, it can be easily adapted, and informed by preferences and other attributes.  Examples of preferences would be mainly generated by the customer themselves, and ideally through self service.  This could include for example:

  • don’t call me at dinner time
  • don’t ever phone me
  • email me
  • contact me only once a year
  • contact me only about mortgages
  • etc

Attributes could be bank generated things like customer segment, and marketing potential.  When we take the preferences and attributes together, we start to get a picture of how we should interact and work with that customer for their benefit, and the Banks benefit.

When the customer ID is tied into many systems it is much more complicated, and exponentially more expensive to address preferences and attributes for all systems. 

While progress is being made, most banks lean towards the left diagram, and this is why the customer experience is often fractured.  How many people have a CapitalOne credit card, and still get telephone calls trying to sell them a CapitalOne credit card!  I pick on them because they are flagrant about it, but they are not alone!


Written by Colin Henderson

December 5, 2006 at 08:46

Financial Services Customer Care Centres lag other industries

In a rather damning report (dated Dec 2005) on financial services efforts, their Customer Care Centres are seen to be lagging almost all, along every axis, with the exception of Insurance, government, and Telcoms – three hardly known as exemplars.  I would suggest that this is partly because they have not made the leap from Call Centre to Customer Care Centre, the second have cross channel implications.

I see this tying into the need to develop proper benefit from CRM within Banks.  The report does note that Banks’ have been investing heavily, so benefits should be expected.

Despite comprising nearly 23 percent of the U.S. CCC market, behind only telecommunications and technology (25 percent) and retail and manufacturing (27 percent), the efficiency and effectiveness performance of financial services firms’ CCCs has lagged that of most other industries.

Source:  Integrating sales with service in financial services customer care centers  pdf

Elements of expected investment are:

  • Multi channel integration: expected to account for 28% of that investment.  Purpose is to integrate enterprise resources across channels, using a mix of technology and people-oriented solutions.
  • Efficiency:  various activities depicted in this diagram:


  • Cost reduction:  There is much focus on cost reduction activities including:
  • Migrating customers to lower-cost channels
  • Improving workforce deployment and agent productivity
  • Outsourcing CCC operations
  • Raise revenue:  This component has less meat in the report
    • Providing training tools and incentives that encourage
      and enable agents to cross- and up-sell
    • Segmenting customers and developing targeted
      sales efforts
    • Integrating product and channel strategies to
      optimize sales.
  • Customer retention (loyalty): 
    • Integrating channels to provide optimal, consistent
    • Sharing customer data across channels and LOBs
    • Tailoring services to customer needs and preferences
  • Contact flow management:  standardized processes, workflow and business rules cross the enterprise and across channels
    • Identify and segment incoming calls – Using interactive voice response (IVR) in combination with customer data to determine customer needs, existing relationships, past interactions and recent transactions across all channels. In  addition, by using customer lifetime value or tiered customer ratings (such as gold, silver and platinum), banks can also tee up segment aligned products and services that provide special
      price considerations
    • Direct calls to appropriate levels of service – Using skills-based routing and an agent proficiency matrix to route transactions to the agent who is best equipped to complete the call successfully on the first attempt
    • Increase levels of self-service, where appropriate –
      Directing customers to lower-cost channels, including IVR and the Web. However, this strategy must be well thought out since a poorly designed self-service offering risks increasing the number of online calls exponentially, to the detriment of the initial objective
  • Achieving optimal customer profitability: Optimal customer profitability requires identifying and targeting customer needs with tailored customer service and product offers, including the following actions:
    • Route customer calls to appropriate channel or media –
      Identifying and segmenting customers by needs and preferences, based on data from all interactions and
    • Build cross-selling and up-selling capabilities – Enabling
      agents to identify opportunities and close sales
    • Make outbound customer acquisition and retention
      calls – Targeting desirable existing and new customers
      in target segments.

    Its quote a sweeping paper, and worth the read for technology strategists, as well as business leaders trying to understand the leverage points of technology versus process, and when you need both for best impact.

    Finally this diagram trying to pull together some of the activities.


    Written by Colin Henderson

    December 4, 2006 at 15:20

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