Bringing Customer Relationships Back into CRM Implementations

by Michael Ruckman

By the late 1990s, many banks understood the shortcomings of the product-centric model and began to consider the transformation needed to become customer-centric. The idea of customer-centricity required a completely new approach to the banking business – product customization, new distribution channels, increased access to bank staff, a different mentality among customer-facing staff and new performance measures. All in all, the task was daunting to say the least, and there was little past experience in this area of business transformation to provide confidence in the new approach.

The early 2000s brought additional advances in technology and many banks jumped at the chance to implement the massive data warehouses and Customer Relationship Management (CRM) systems that would redefine their businesses. The idea was that data warehouses would track customer data, preferences, usage patterns, etc. and would allow banks to configure CRM systems with “if/then” rules in an effort to offer the right products to the right customers at the right time. Sounds great!

Bringing Customer Relationships Back into CRM ImplementationsHowever, over the past decade, few banks have seen the rewards promised despite significant investments in CRM systems. A 2009 study by Forrester Research indicated that 47% of CRM project implementations in the U.S. fail in their initial attempt. While specific reasons can be cited, CRM failure is most often tied to a poorly planned strategy.  Over the past decade, many organizations grossly underestimated the extent of internal restructuring necessary to reap the full benefits of their CRM solutions. While CRM systems can definitely be a crucial part of the effort to develop and maintain healthy relationships with clients, it is merely a technological enabler. Therefore, designing a CRM system to support a business that is not already customer-centric is unlikely to deliver satisfying results. “In the end, CRM delivered a healthy amount of tactical benefits (improving employee productivity, streamlining processes, reducing cost, etc.) but did not move the needle on customer loyalty and experience,” wrote Bob Thompson of CustomerThink.


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