10 minutes
The value of customer relationship management systems is indisputable. When used as a tool to support the credit union’s strengths in people and processes, these systems allow credit unions to know their members better and, as a result, improve service, generate relevant cross-selling opportunities and deepen member relationships.
However, successful implementation requires time and commitment, as well as a clear understanding of what you want to achieve.
“The term CRM is applied to such a broad range of activities that it is important to gain an understanding of what the credit union is trying to accomplish and which CRM challenge spaces they want to address,” says Ryon Packer, SVP/enterprise product strategy/credit union solutions at CUES Suppler member Fiserv, Brookfield, Wis.
Packer identifies more than a half dozen categories that credit unions can undertake with a CRM system, including such functions as contact management, referral management, campaign management, profitability tracking, sales tracking and workforce activity capture (which allows leaders to see how productive employees are and track metrics such as number of teller transactions at drive-through vs. counter; number of loans applied for or accounts opened). There also is a trend toward enterprise CRM solutions, which give credit unions a 360-degree view of each member, he says.
Because of the various components a CRM system can entail, Packer stresses the need to have the right leadership aligned with the implementation process. So, if the main CRM function is operational, an operational leadership component should drive the initiative. In the case of an enterprise CRM implementation that encompasses all phases of the organization, the executive sponsorship should be broader.
“What we’re seeing with the drive toward enterprise CRM solutions is the need for everyone at the CU to play a part,” Packer explains. “Your CMO has to be engaged, your COO has to be engaged, as well as your branch leadership, sales leadership, lending and IT. Everyone has to come to the table and contribute to make the enterprise CRM initiative a success.”
Key Implementation Factors
“If you don’t understand your relationship with (the) member, chances are you’re going to lose that member over time,” contends Jay Mossman, CEO of CUES Supplier member Akcelerant, a wholly owned subsidiary of Temenos in Malvern, Pa.
Because of the need to understand the member, Mossman stresses the importance of selecting a member-centric CRM solution.
“Some of the systems out there are account-centric, meaning they understand all the accounts the member has but don’t bring them back into a single view,” Mossman says. “Providing a single view of the member is really what CRM systems are all about. It’s being able to see from one place all of your interactions with the member.
“In interactions with the member, you can determine what other products might be worthwhile for them to consider,” he explains. “As an example, you might be talking to the member about an auto loan, but when you do the credit report, you can determine whether your credit card offering is better than the credit card the member already has with another financial institution and make an offer accordingly.”
Credit unions have various objectives in mind when implementing a CRM system. For instance, $508 million Vibrant Credit Union, Moline, Ill., is upgrading to a new system with an eye toward improving service while also leveraging open sales opportunities for the benefit of its 41,000 members. The new CRM system, which is part of Vibrant CU’s conversion to a new core processor from Fiserv, is scheduled to launch in March 2016.
“We see CRM as allowing us to create better and deeper relationships with our members,” explains President/CEO Matt McCombs, CCE, a CUES member. “Our goal is to have a complete picture of what our members look like, identify the opportunities or struggles they’ve had, and create a better experience for them. We measure everything on depth of relationship, primarily services per household, total deposits per household, total loan dollars per household, and specific overall product penetration levels per household. Our goals are very aggressive in increasing these metrics.”
Vibrant CU’s upgrade will transition the CU from a simple, homegrown contact-management system sitting on top of its old core processor to a fully integrated CRM model capable of tracking every member interaction from start to finish.
At $2.25 billion/200,000-member BCU, Vernon Hills, Ill., CRM capabilities are achieved using the Akcelerant Framework System.
“When we first implemented the system eight years ago, we were in the teeth of a severe recession,” says Jim Block, SVP/chief lending officer. “We were looking for ways to reduce our servicing expense and enable process automation. At the time that we implemented it, we weren’t looking at it as a growth tool.
“Today, in an expansionary environment, we’re leveraging the system for capabilities we can use in cross-selling and identifying opportunities for members who have fewer products than we would like them to have.”
BCU has found another key advantage of Akcelerant Framework to be its underlying connectivity, which enhances workflow and provides excellent reporting capabilities. “When we initially set it up, we knew we had a problem with inconsistent processes and inter-departmental hand-offs,” Block says. “We also knew that we needed to improve our communication with members. We were looking for a tool that would give us the capability of dynamically changing how we could help our members on whatever system we were using, while reducing inconsistencies through the process and ensuring our communication was where it needed to be.”
Aligning to a Strategic Vision
Block recommends that CUs implementing a CRM today have a clear idea of what they would like their end-goal processes to look like and then build toward those goals.
“You really should press your team to think about how things could be instead of how things currently are,” he advises. “I think people are comfortable with what they know and what is already working, but to get the kind of leverage and benefit from your CRM investment, you need to encourage your team to shift its paradigm regarding what the new technology is capable of. That’s really what they should work toward building.”
On a similar note, Chris Braccia, director of product management at CUES Supplier member D+H, Portland, Ore., stresses the importance of having a strategic vision in place to implement a CRM system effectively. “At D+H, we don’t look at CRM as simply software,” Braccia explains. “The software is a tool to help you implement and drive CRM strategy. To go down the CRM path, you need a combination of software, strategy and analytics, as well as the organizational culture to support it.”
Those who are most successful with CRM, Braccia adds, have well-defined expectations of the specific goals they want to achieve, such as higher member service ratings, better member retention or more effective leveraging of cross-selling opportunities.
While CRM systems can provide excellent business intelligence, CUs should not regard them as a substitute for sound processes and essential skill sets.
“You have to make sure that you already have the necessary processes and skill sets in place or in development,” Packer says. For example, a CRM system will not magically correct an organization’s deficiencies in sales and marketing. “If you’re not selling well today, putting a CRM system in place will not transform you into a sales-culture credit union,” he says.
First Steps to Implementation
“Most CUs start by focusing on the sales and marketing side because of the need to drive revenues, but it’s also a good idea to move forward on the service side,” Mossman explains.
Service efficiencies achieved with a CRM system, for example, could involve shortening the time it takes to replace a lost or stolen debit card. “With a service system, a credit union employee can take the request over the phone and start a workflow that automates the notification of cancelation and reorder. It can also send an email to the member confirming that their request has been received and is being processed,” explains Mossman.
If the CRM system identifies a lost card to be a recurring problem, the employee can be proactive and offer to sell the member identity theft protection as a precaution for the future.
Using a CRM system effectively can be an excellent differentiator for CUs looking to compete on a level beyond who has the lowest rate or promotional offer. “The key is to look at driving a successful point of interaction to create a memorable member experience,” Braccia says. “For years, as an industry, banks and CUs have focused on transactions. While having fast and accurate transactions is important, it isn’t nearly as effective as meaningful interactions with your members.”
The use of segmentation schemes is an excellent way to customize the interaction to the specific needs of each member. For instance, the D+H Touché® Analyzer solution identifies four household value segments: Retain, Cultivate, Maintain and Optimize. (The D+H system assigns the correct segment to each relationship. Multiple variables are analyzed, such as account relationships, behavioral modeling scores, profit contribution, share of wallet and so on.) “The idea is to create a strategy around each specific segment,” Braccia explains. “For instance, ‘Retain’ are your most valuable members, so you might want to empower your front-line employees to waive certain fees or give these members 25 basis point bonuses on CDs—that type of thing.
“A screen pops up to tell the member service rep exactly who the member is and all the parameters around that,” Braccia continues. “It’s dishing up cross-sell opportunities that are defined within the analytics tool, thus helping to create a dialog at the point of contact that goes beyond order-taking.” However, the tool does not provide a “script” for employees to read. “It is critical for the CU to have a sales culture that can take this information and use it during a member interaction,” says Braccia.
Implementation Timetable
The timetable for implementing a CRM system can vary greatly, from as little as 60-90 days to as long as nine months or a year, depending upon what the credit union is looking to achieve. For more comprehensive CRM systems, Mossman recommends a phased-in approach.
“CRM is so broad in both its offering and opportunity that sometimes we can get too excited too quickly and try to do too many things too fast,” Mossman says. “Then everybody gets frustrated because nobody’s seeing results. The beauty of CRM systems is that you can take pieces and implement them in a shorter span, start getting some rewards and some ROI before moving forward with other opportunities the system offers.”
Packer agrees with the gradual approach to CRM implementation. For instance, you may want to start by identifying the best prospects among your members for auto or student loan offers.
“We believe it’s best to start by focusing on incremental wins and stacking them up over time,” Packer says. “CRM tools can do amazing things and, without a doubt, you can get these ‘eureka’ moments. But we find that it’s better to get a good understanding of how the system works and what it’s capable of doing rather than trying to make it do something remarkable right from the start.”
For credit unions with multiple branches, one effective strategy is to introduce the CRM system in just one or two locations rather than rolling it out across the board. Not only will this allow the credit union to make adjustments more efficiently, but Braccia points out that it also will help with the buy-in among employees.
“We’ve had a number of clients who rolled their system out initially to just one or two branches,” Braccia reports. “They worked with it a month or two, and then the other branches start asking about it. Oftentimes what happens is the first couple of branches like it and are excited about, and the other branches want to know when they’re going to get installed. So, it can really help create excitement if you position it correctly.”
It’s important to spend time up front educating employees on the value of the CRM and how it’s going to improve their ability to interact with members, Mossman adds. “At the end of the day, when they see that it’s not going to replace them but add value to what they can do, you’re going to start seeing the buy-in that you need.”
Diane Franklin is a freelance writer based in Missouri.
