CRM (Customer Relationship Management) is a modern customer relationship management strategy. It covers the processes of acquiring, serving and retaining customers, as well as delivering services to them. CRM is the tool that allows the bank to stay on the banking services market in an extremely intensified competition. The very factors leading to the growth of competition are of a nature that contributes to the maximum possible reorientation of the bank to the requirements of clients – when there is a struggle for each client and each transaction, when it is not the bank that dictates the rules to the clients, but the immediate needs of the clients along with the long-term ones determine the development of the banking market services. Here are just the main factors.
- The current situation on the market when banks offer almost identical products, and new products are immediately copied by competitors. In this situation, the distinction between banks from the point of view of the client is erased, he is no longer tied to a specific financial institution.
- Rapid growth in the number of various channels for the delivery of banking services, transforming banks from separate financial institutions into simple providers of financial services.
- Widespread use of Internet banking and e-commerce, allowing the client to easily change from one financial service provider to another.
- Significant growth in the number of products offered, leading to the proliferation of alliances among financial service providers to provide the most complete end-to-end solutions. This leads to a further reduction in the differences between providers.
- The constant increase in the number of literate, well-educated clients who want to manage their own funds, do not want to put up with the restrictions of traditional banks (working hours, waiting in line at the operator, the range of services provided) and are inclined to self-service through banking service providers.
For successful business in these conditions, CRM strategies and CRM applications are used. Many of the ABSs used in banks now have to undergo revision in order to support CRM strategies; advanced ABSs give the bank the opportunity to implement the best CRM software for banks strategy today.
CRM strategy and tactics
CRM strategies start with two main questions: Who are our existing or expected customers? What type of relationship do we want with them?
There are three basic CRM strategies (each implies a corresponding type of product proposal):
- relationships on a transactional basis (single product involved);
- relationships that, in addition to the transaction, include technical advice and guidance (usually bundles of products and services are involved);
- a complete partnership that includes all the listed elements and is based on a broad knowledge of the user.
The most popular CRM tactic at the moment is segmentation that is, dividing the customer base into groups or segments, with most firms segmenting customers by product and service. Profitability is a more attractive but also more difficult to define criterion for segmentation.
To implement the CRM strategy and tactics, it is necessary to have a powerful ABS in the bank, which must:
- include customer transactions;
- have a wide functionality covering the possible activities of clients;
- contain a history of customer relationships;
- maintain a knowledge base for clients, taking into account both his tastes and needs, and the interests of the bank in relation to him.
This allows you to automatically receive information in the system and provide the services necessary to support CRM.