As the financial services industry evolves from transaction-centric to a more customer-centric business approach, effectively leveraging customer relationships becomes all the more critical. A customer’s financial needs change throughout their lifetime and their loyalty increases, making it doubly important for financial institutions to cultivate lifelong and profitable customer relationships.
Developing and implementing a responsive customer relationship management (CRM) strategy that offers the most appropriate products and services to customers throughout the relationship life cycle—and rewards them with the level of service they want and have earned—can be critical to gaining “wallet share.”
These simple tips can help you get started.
- Strategy first, technology second. CRM projects can easily go off track when companies buy technology before they have their CRM business goals clearly established. The first step is to develop a strategy that addresses the needs of current and potential customers. Consider the life cycle value of customers, taking into account different groups, and which ones are likely to yield the highest returns over the long run. Then select the right technology to capture customer data, consolidate the information and deliver meaningful communication at relevant times.
- Develop the right contact strategy. Knowing which products, promotions and incentives to offer to which customers (and when) ensures an organization won’t over-market to customers, demonstrates a more personal understanding of those individuals and will ultimately build loyalty and retention.
- Change accounts into customers. The traditional approach in many financial organizations has been to associate their customers with accounts—to the point of calling the account the customer and vice versa. Customers may feel alienated when they are treated “like a number” instead of like a person with personal needs and a history with the organization.
- Build customer loyalty by offering excellent service. In a competitive marketplace where price is not a differentiator, customers are easily lost through indifferent service. It can be as simple as not calling a customer back when promised, through to delivering a message about a product that’s not relevant. Developing a CRM strategy that is mindful of customer interactions will lead to service excellence, paying dividends in higher customer retention levels.
There is no doubt that customer-focused strategies are essential to unlocking customer value and increasing retention in the financial services sector. Gaining “wallet share” through effective marketing and cross-selling is likely a key objective in most banks’ and credit unions’ marketing plans. There’s no better time to get started than right now.