As product diversification is a problem for the financial services industry, the quality of customer service is becoming the lead denominator
One of the greatest difficulties facing the financial services industry is product differentiation. Companies may have excellent products, lots of choice, well-established brands, and first-class fund managers, but most of the competition can offer similar benefits and very similar products.
So, if product diversification is no longer a real option for attracting and retaining customers, what is the answer? Many financial services organisations are starting to believe that quality of service may be the only effective differentiator left and CRM (customer relationship management) systems are the way to deliver it
CRM has been hailed by many as a miracle solution to the problems of customer promiscuity, yet its take-up within the financial services industry has been slow. Paradoxically, in an industry where cutting-edge technology is required for fund managers to do their job, dealing with customers is often reliant on out-dated software or even paper-based systems. As a result, simple valuation or application enquiries can take days to resolve.
Intermediaries are the primary source of business for most fund managers in the UK and Europe but despite this, information about these customers is not centrally held and they are frequently known by fund managers merely by an number or account. This problem is exacerbated when the administration is outsourced to third-party companies.
Intermediaries vary from large nationals with multiple offices to affiliations of individual intermediaries grouped together in formal and informal networks and one-man bands. All of them may want to do business with a fund manager in different ways. Specifically, while they may all need to have the latest information on products, some want to operate at a face-to-face level with designated individuals from a fund manager, some prefer to deal with a service centre by telephone, and others want to use email or the internet to get information or even to transact their business.
A well implemented CRM system can allow fund managers to provide an integrated solution to all different types of intermediaries and allows each of them to deal with the fund manager in the way that suits them best. Once in place, it can also deliver substantial cost savings.
Some of the benefits to intermediaries would include:
• Faster access to product information including fund factsheets, market reports and application forms, possibly through a download section on a purpose-built website
• More ways of transacting on behalf of investors ' face to face, by telephone, by email or over the web
• Faster response to enquiries ' valuation requests on behalf of the investors
A CRM programme needs to be reviewed and re-focused on an ongoing basis. To allow this feedback to be built into the process, integrators should employ a phased delivery approach ' ensuring that key business benefits are delivered first and subsequently adding other elements to the programme. This allows for the CRM project to be flexible enough to adapt when the business climate requires it.
Servicing solutions can be more complicated as they often involve integration from other systems to enable enquiries on various business aspects to be answered by the service desk.
The best approach involves defining a scalable solution that is built once and can then be deployed for every channel as required.
Staff training is critical. The return on investment is only obtained from a CRM project if the users employ the system. This requires clear, process-based training which is regularly reinforced. CRM is a broad church of functionality, and users can get overwhelmed with too much information.
Obtaining user support for the project prior to implementation is also very important. Existing company culture and processes cannot be ignored, but need not fall victim to costly and time-consuming management-changing programmes. Acknowledging the culture and working within it, rather than against it, is essential.
Sadly, not all CRM enterprises are successful and the reasons for failure seldom have anything to do with the technology. Process issues and resistance to change are far more likely to be at the root of the problem. These must be identified and tackled at the earliest stages of the project.
Ultimately, customer relationship management needs to focus on the people, not just the technology. Customers form relationships with other people, not with systems. However, technology can make internal processes more efficient, so that sales staff can have all necessary information at their fingertips before a face-to-face meeting, and servicing agents can answer all their calls first time, without hand-offs.
CRM systems ' if they are properly implemented and used ' can make an organisation truly customer focused, providing an effective marketing and sales engine targeting key customers, and an efficient servicing and administration model enabling world class customer service. It can also provide management with the information and reporting to see exactly where the business is, and where it is going.
Colin Robinson is Associate Vice- President at Akibia Consulting
Product differentiation is a problem for the financial services industry.
CRM is believed to be the only factor to measure quality of service by.
CRM systems ' if they are properly implemented and used ' can make an organisation truly customer focused
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