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CRM: Why Simple Can Be Better

Customer Relationship Management, or CRM, has long been touted as the Holy Grail for financial institutions. Find out F&A Federal Credit Union's solution to the complicity, high cost, and laborious nature of traditional CRM solutions.

Customer Relationship Management, or CRM, has long been touted as the Holy Grail for financial institutions. After all, what could be better than an all-inclusive system that helps you retain profitable members and move those who are not towards profitability?

The problem lies in the complexity of the solution. CRM isn’t just a software system that promotes a common message to the same member across all communications channels. It’s a business philosophy that must be embraced by management and inculcated into employees at all levels. It is a process solution requiring both procedural and automated systems to be put in place. Additionally, it is an approach to training and ongoing evaluation to ensure goals are being met and that there is a significant return on investment.

Rich Andrews, CEO of F&A FCU, a $720M credit union near Los Angeles, shares his experience: We looked at CRM as a way to provide better and more meaningful service to our members. We discovered that it’s a very complex process requiring an enormous amount of work and dedication just to answer even basic questions. We thought there had to be a simpler approach, something that could deliver member-level offers without a huge investment in time and resources.

Full-blown CRM solutions can be complicated, expensive, and require years to fully implement. Some solutions even recommend a change of the host processing system. According to Mr. Andrews, making the decision to proceed simple questions:

1. Will more profitable members be retained?
2. Will more unprofitable members move towards profitability?
3. Can the additional profit generated be measured and quantified?

What we needed was a straight-forward solution that would provide CRM-type functionality, but not necessarily across all channels. We wanted to take a small step rather than a big leap, added Mr. Andrews.

F&A found a solution that fit the profile: automatically targeting specific offers to individual members was lower risk than a full-blown CRM system and was far easier and faster to implement. Consequently, this web-based solution was launched at F&A in late March of this year.

This system automatically targets and delivers promotional offers to members when they visit the credit union’s web site. Offers are relevant and timely for each individual member based on their unique needs and behaviors. Such offers also provide an excellent response path requiring just a few mouse-clicks to take the member from interest to action.

For instance, if the targeted offer below is sent to member John Smith and grabs his attention, he’s likely to click on it. Upon doing so, he’ll be taken to a page that provides detailed information about the HELOC offer allowing him the choice to apply on the spot.

As the example above shows, personalization can include the member’s first name. It can also include other data elements unique to the member such as the pre-approval loan amount in this example:

In order to target specific offers to individual members, the software uses the credit union’s current MCIF data and member transaction data to automatically identify which members get which offers. This removes the need to spend long hours designing campaigns and manually selecting which members qualify for offers.

After the first three months, F&A had tracked enough data for analysis. Mr. Harden explains, The initial forecast projected that 91 loans and checking products would be sold in the first quarter after its release. We thought it was possible, but aggressive. Needless to say we were surprised and pleased that 129 new loan and checking accounts have been opened. Using this technology we are able to very effectively market our entire range of products without increasing staff or our marketing budget.

For those credit unions that already have an MCIF system, the addition of WebMRM provides a low-risk and affordable way to implement an effective single-channel CRM solution. For more information contact aaBeck Technology Group: Ph: 888-512-1099, E-mail: sales@aabeck.com, Web site: www.aabeck.com.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
May 29, 2018

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