For years, credit unions have differentiated themselves from banks and other competitors by creating strong “trusted advisor” relationships and superior banking experiences for their members. But the rules of the game are changing quickly and in a big way.
This change all starts with the concept of customer relationship management. CRM is a strategy that has been pursued by credit unions ever since the term started being used in the early 1990s. Credit unions have also used the term member relationship management.
Over the years, there have been several different definitions of CRM, but they have always encompassed some common themes:
* CRM organizes processes and delivery of banking services to provide maximum member satisfaction.
* CRM should optimize revenue and profitability.
* CRM customizes strategies and delivery based on the needs and preferences of unique member segments.
* CRM must be planned and articulated at the enterprise level to achieve the desired return.
Most financial institutions recognize that CRM is an “umbrella” concept that includes several distinct components that require different tactics and systems, but which at the same time must be designed and managed with a single overall strategy. These components are:
1. Member profiling — collecting and showing all member relationships and information to employees in a single “picture”;
2. Contact history — managing all member contacts, regardless of where they occur and whether they are financial transactions or non-financial encounters;
3. Marketing — analyzing member profitability, demographics, and banking preferences and using that information to offer products and services that garner a larger share of the member’s financial relationships;
4. Sales management — managing employee sales efforts, referrals, cross-sells and incentive programs that reward employee behavior;
5. Sales and service automation — creating an environment where members will have a consistent banking experience no matter how or when they transact business.
Why the Ground Is Moving
While these…