When David Vey tells credit unions why customer relationship management (CRM) software is so important, he gives a simple example:
“The daughter of one of your most important members comes in to cash a check, but she doesn’t have an account with you. Your teller routinely asks her for three pieces of identification, a request that alienates her.”
Vey, CEO of Sedona Corp., says a good CRM system would have tagged that account’s importance to the credit union and pulled up information about the member’s household. That way, the teller would have known how to handle the family member’s transaction quickly.
Chris Braccia, director of product management at Harland Financial Solutions, calls CRM “the great differentiator” because a good member experience is often the only edge credit unions have today.
“This includes defined criteria based on the complete member relationship with the credit union,” he says. “Say a credit union designates its most valuable members as ‘retains,’ and crafts a set of criteria around them that defines interaction benefits.
So when Mary Smith is distressed about a fee she thinks is unfair and the teller sees ‘retain’ in her CRM profile, he removes the fee.”
Credit unions share three common goals in using CRM, says Floyd Salamino, vice president of CRM consulting at Marquis. “Along with increasing member retention and recruitment, they’re also looking to increase cross-sales and automate in-house processes. Where they can differ is in how developed their sales and service cultures are.
“Some of them look at CRM as a way to bolster existing sales and service cultures that already have buy-in from senior leadership and front-line employees,” Salamino continues. “They’re looking for technology to support and expand those capabilities.”
Make information actionable
Staff buy-in is crucial for making CRM systems effective, Braccia says. Obtaining that buy-in requires giving all member contact representatives access to useful member information. “The credit union has all of these bits of data about John or Mary Smith—the key is to compile and analyze the data, turning it into actionable information that can be used by staff to improve sales.”
Harland Financial Solutions’ system, Touché Analyzer, uses “segmentation schemes,” elaborate data categories that make information available to staff. This includes members’ purchasing propensities, share of wallet, cross-selling suggestions, and members’ current and potential value to the credit union, Braccia says.
Vey notes that while almost everybody can use, for example, an Excel spreadsheet, “the average user takes advantage of maybe 1% of its potential. Our goal is to take the power of our software and make it easy for users to learn and obtain useful data. You have to know how to migrate the information and present it in interesting and useful ways.”
CRM advances over the years include more intuitive and user-friendly interfaces, including an improved layout, more logical flow, and clearer verbiage, says Salamino.
“The days of programmer-centered software are long gone,” he says. “Also, there’s much wider acceptance of the technology and a greater focus on results versus activities. Credit unions aren’t just tracking referrals or calls, they’re now looking more strategically at the actual results of those actions.”
Implementation, however, is the hard part. “Credit unions don’t set up CRM software every day, which is why they turn to us for help,” Salamino says. “We send a consultant onsite to help them customize the software and stay focused on what’s essential.”
The most important thing is simplicity, he says. “Once you’ve mastered a few essential elements, expand your use of the software’s other features.”
It’s also important to prove results, Salamino adds. “Set a benchmark and goals, and develop metrics for measuring progress: Where are you now and where do you want to be in 12 months? Track, measure, and adjust along the way.”
NEXT: CRM best practices
CRM best practices
Vey acknowledges it’s less imperative for small credit unions to have a CRM solution than it is for large institutions.
“The CEO can say, ‘We have 1,000 members and I know them all so there’s no need for CRM,’ ” he explains. “But what happens when there’s an influx of new members; say, several hundred? Now they’re just names with no faces or kids to associate with them. Suddenly you’ve grown into the need for CRM.”
Another factor driving acceptance of CRM is that financial industry leaders have become much more tech-savvy and sophisticated during the past decade. “This has spilled over into member relationships,” Vey says.
Clients can customize CRM software with their own stratification schemes by, for example, dividing members into Platinum, Gold, or Silver households, and then suggesting which products these members likely will want next.
“Our software can also track what solicitations households have received from the credit union’s marketing department, so a frontline person can talk about that topic without having to bring the member up to speed,” says Salamino.
“Credit unions can include scripts and qualifying questions for employees to follow when they’re cross-selling,” he adds. Triggers such as birthdays or anniversaries also are useful.
When targeting new members, these triggers include actions for staff to take, such as a congratulatory phone call, Salamino explains. This allows management to track staff’s calling efforts and how much business these actions generated.
Braccia says credit unions with several branches can find CRM hard to juggle. That’s why he advises developing a template at one branch that can be used at others.
“As far as individual CRM components, such as referrals, sales tracking, contact management, and servicing,” he adds, “we advise focusing on one at a time, and not trying to learn all aspects at once.”
The idea is to avoid adding many new CRM-related tasks to those the member-facing representative must tackle each day. It’s important to remember, Braccia says, that successful CRM deployment includes behavioral change. “Give it time. Mastery of CRM can take anywhere from 18 months to three years. You don’t do it in a rush.”
Financial institutions sometimes are at odds with the concept of retailing, says Braccia. “But we are in a commodity business so we can’t play the product or price game because both categories are easy to replicate. What’s left is a good consumer experience that narrows the ‘consumer expectation gap’—namely what consumers expect versus what they get.
“People who come into a credit union are on serious business,” he continues. “They want to be greeted by name, acknowledged that they’re doing a serious task, appreciated for their patronage, and reinforced in their perception that the credit union is a trusted financial ally.”
Salamino agrees the credit union movement is more sales-driven than it once was. “That doesn’t mean pushing people to buy products they don’t need—people like to buy things, not to be sold. CRM allows credit unions to understand their existing relationships with members and to be more proactive in suggesting suitable products.”
He adds that it can take credit unions a long time to embrace and use CRM. “As a former credit union executive, I know first-hand about managing multiple priorities. We encourage potential clients to talk to other credit unions, both about us and our product, and about CRM itself.”
Vey advises credit unions to spread their footprint and provide more and better services.
“Not doing so makes them look like a cafeteria that doesn’t serve soup, salad, or veggies,” he says. “Members who want a full range of services will go elsewhere if the credit union doesn’t provide them. Your job is to recognize your members’ needs and serve them.”