Crm in Finance

CRM in Finance

In today's dynamic world, the importance of good customer service is becoming more and more apparent. With the blurring up of differences between banking, broking and insurance; coupled with industry consolidations; demutualization; shrinking margins; profitability pressures; and new distribution channels; the finance companies are being forced to rethink their business models for survival. Today's customers are more sophisticated and are more willing to explore alternatives to traditional products and how they are delivered. The task of getting and keeping customers requires even greater skill and effort. Getting closer to customers and effectively responding to their needs is a great way to boost their loyalty and encourage deeper business relationships. It is also a much more strategic route to success than cutting costs and improving efficiency. As companies engage in the battle to win over a larger share of customers, corporate interests in the concept of customer relationship management (CRM) have grown dramatically. CRM technologies focus on managing all interactions that an organization has with its customers, in order to leverage the data in a variety of business applications. Globally, industry executives are struggling with the complexities of CRM, trying to understand what it can mean for their organizations and how to proceed to adopt appropriate CRM solutions. Combined with challenging economic conditions and continued stiff competition, the finance industry can no longer operate under one policy model. Instead, it must adopt a new client-centric approach to meet the needs of its customers better. While CRM is not a new process, its evolution over the years has changed the way businesses viewed and interacted with their customers. To the point that many finance executives are now discovering CRM to be a valuable corporate asset - one that can directly impact their bottom line The underlying idea of a CRM tool is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If it works as hoped, the organization would achieve the following goals:

Ð'* Provide better customer service

Ð'* Respond quicker to customer inquiries

Ð'* Make our call center more efficient

Ð'* Simplify and increase marketing and sales processes

Ð'* Discover new customers

Ð'* Have a deeper understanding of current customers

Ð'* Increase customer revenues and identify the most profitable customers

A typical finance company has a huge customer base, varied product lines, multiple distribution channels, and a market spread across geographies. To effectively interact with customers and design suitable products, the CRM strategy has to fully utilize the potential of technology. The company has to leverage a vast pool of data at each step in the CRM process, and use the insight gained for developing new products and services to meet the ever-changing needs of the customers.

The CRM process in the Britannia Society has three steps:

1. Identifying the most potential customers: Besides acquiring new customers, it is vital for the company to retain and increase the profitability of existing ones. CRM vendors must create better customer value propositions through better value packages, and better finance options for the customers. This provides the customer more choices and fewer reasons to turn to competitors.

2. Understanding their needs and buying patterns: Customer Segmentation segregates customers who exhibit common characteristics in different segments. These segments can then be treated as distinct entities and the future interaction with them can be tailored accordingly. Attrition Analysis involves analysis of data captured during individual customer contacts at the various touch points. Acquiring new customers is much more costly than retaining the existing ones. It costs one-sixth less to keep a current customer than it does to attract a new one. Typically, buying a product is a long-term decision for a customer; and if she/he decides to switch, it is very likely that she will not come back. Affinity Analysis is often referred to as market-basket analysis. Certain products show an affinity towards each other, and are likely to be bought together.

3. Interact with them so as to meet all of their expectations: Target Marketing where marketing managers can design specific campaigns targeted at individual segments. Campaign Analysis to analyze the effectiveness of a marketing or promotion campaigns. Often the surge in sales of the promoted product can result in decrease in sales of