CRM Requirements for 2021 have Changed – is Your Institution Ready?

CRM Requirements Have Changed

Although many people think of CRM as just a technology, it is so much more than that. CRM technology without CRM strategy will never be successful. 

With 2020’s unprecedented changes in customer behavior, accelerated digital evolution, and ever-present data problems, it’s no surprise that in 2021 CRM strategy and the technical requirements to implement them also need to change.

It’s time to assess the new technology requirements that will support a healthy customer relationship strategy in this new era. How will you continue to manage customer relationships as the financial services industry continues to evolve?  

New Challenges Drive New Requirements

Challenge: The Digital Divide

Sometimes technology can put a digital divide between you and your customers. The move to digital has decreased already weak branch traffic, and opportunities to talk to customers and build the relationship have become scarce. You only hear from them when they have a problem or when they are looking to add a new product or service. It’s clear that you can’t wait around for them to call any longer. Is this the impact we want digital banking to have on our relationships? 

Because there is an increased digital divide, you have to try harder to maintain relationships because otherwise, you’re just like everyone else. If their experience with your institution is disconnected, they can find that experience elsewhere. 

“This sudden increase in digital adoption is both a blessing and a curse for banks. Although it is efficient and has dramatically advanced most banks’ digital agendas, the lack of human connection poses the risk of banks weakening their already tenuous personal and emotional connection with customers.“ Accenture, 2020 Banking Consumer Study: Making Digital More Human

Customers really want to talk to a real person when they need help. They can call an 800 number and wait for help at any of the big banks but having real people to help customers live their best financial lives is what community banking is all about. You are different from everyone else because you can be there for them. 

Challenge: We don’t know what customers are doing

According to the Federal Reserve, over 70% of US households use digital banking, but our research shows numbers closer to 50%. And that number only tells us who has digital banking, not who actually uses it.  When we look at usage in bank data, it differs from bank to bank but still shows a much smaller number. Plus, most financial institutions have no way to see this, causing them to rely on intuition about customers rather than data. You can’t rely on generalized numbers and intuition like the rest of the crowd; you need to base everything on factual data.

Challenge: How to affect buying decisions

A CRM strategy needs to consider the lifecycle of a customer, because the customer’s journey does not begin with account opening. They are reaching out because they did the research and decided they needed a product, or because someone sent them an offer. You want them to be thinking about your institution during this time. Do you assume customers will come to you first just because you’re the community bank? Other institutions are proactively vying for their business, and if they never hear from you unless they’re getting a statement, they won’t think of you first.

So how can you affect their buying decision before this?

Challenge: Keeping up with digital evolution, not revolution

Today it’s about digital evolutionnot revolution. It’s an evolution because customers have been moving in this direction for years. Digital technology continues to evolve and your digital capabilities must evolve with it. Financial institutions already know that digital is important, but the problem is that customers and channels continue to change. Even after your digital means may have caught up to customer needs, they need to consistently adapt to meet modern demands. Modern channels require modern technology. 

Yet, digital is more than online banking, bill pay, a mobile app and online account opening. Convenient services are good, but these things do not make you any different from the big banks. You’re not going to be competing with big bank technology spending, so focus on what do you do better: proactive customer service and personal relationships.  

Challenge: How to position your bank with your customer base

Is your institution trying to be the next Amazon? Or the friendly bank on the corner? Be careful not to lose your community bank identity getting caught up in the digital revolution. Your customers don’t expect you to be the world’s premier e-commerce company in 2021. In this digital divided world, you do not have to have all the same channels as the big banks, but your CRM strategy does need to be different than theirs. Therefore, position yourself as a community bank with an accessible mixture of personal help and some convenient services. Don’t try to be the big banks. Be a community bank with the ability to reach customers where they are.

The status quo won’t cut it anymore 

We run into 3 types of financial institutions: 

1) Those that have a relationship strategy but do not have a CRM

2) Those that have an incomplete CRM that doesn’t actually support their relationship strategy 

3) Those that have an expensive and complex CRM in some departments that can’t be leveraged by other departments in the bank because of cost and complexity.

Community financial institutions can’t rely on what they have been doing. Most know that a relationship strategy is critical and that they need technology to support it, yet still don’t have a system in place that meets their needs. To compete in 2021 you need to connect with customers beyond digital with a relationship strategy that differentiates you from the big banks. To do this, you need a data-driven CRM that can help them confront and adapt to the customer behavior changes we will see in 2021.

In a digital world, the typical CRM is no longer sufficient. The changes we mentioned are driving different requirements for CRM:

  • Data Integration
  • Data-Driven Everything
  • Integrated Email Marketing

Requirement: Data Integration

Data is more important than ever – but exists in more silos than ever

Your CRM technology can’t help you personally connect with customers if your data isn’t integrated. Financial institutions know they have lots of data on their customers, but don’t know how to leverage it to improve relationships. Meanwhile, most CRMs don’t address the basic data problems that community institutions deal with. In this digital world, there are even more data silos than ever which just perpetuates these problems. These data problems will only worsen as institutions add more products and services.

The Complete View

With increasing digital usage, it’s harder than ever to see a complete view of your customers’ behavior – just looking at transaction data from your core and ancillary systems isn’t enough anymore. Understanding customer behavior in your digital channels is no longer optional. Website traffic, mobile banking, email, and social media are new siloed systems because there is untapped data potential within each that helps you understand what your customers need. 

Requirement: Data-driven everything

Integrated data should drive everything in your CRM strategy because it allows you to proactively reach out to customers about what they need (maybe even before they know it!) Proactive communications based on your customer’s behavior causes them to think of your institution first when they need something. It’s no longer just about personalizing customer experience: It’s about being able to see and learn from customer data so you can offer exactly what the customer needs when they need it. You can be there in front of them before another institution can. 

Data-driven activities

Data can drive meaningful daily activities for bankers that help them build and foster customer relationships – instead of waiting and hoping they come to your branch. You can use behavioral data to target your campaigns and communications that show branch staff exactly who to call on, what they need, and why they need it. 

Requirement: Integrated email marketing

Email is a constant in everyone’s life that quickly and efficiently helps financial institutions communicate with their client base. Does your current CRM technology have what you need now to meet the requirements of your strategy? If you do data-driven everything, that means your email marketing needs to be data-driven as well.

Understand Customer Behavior First

Understanding customer behavior with data helps you target your email campaigns.

We shouldn’t only email a customer when we want to sell something or send an email blast to everyone who doesn’t have a CD, that’s what everyone else does. If your strategy should be more personal, you have to use targeting based on behavior. That means linking data to the actual email campaign. Can you see data about customers you are emailing? Can you see previous communication and contact history? You need to know about the relationship before you communicate with them. 

The productivity problem

Todays email tools are usually standalone and batch-oriented. You have to extract a list of email addresses from other systems and import it into your email system. It’s impossible to be productive and nimble with these kind of campaigns. If you want to maintain consistent and relevant communication, this way simply not sustainable in the long run.

Some everyday CRM strategies, like onboarding, require a better approach. Emails must be triggered by data-driven processes to effectively and efficiently communicate with your customers.

Attribution is Key

If your data, email engine, and CRM are kept separate, there’s no way to attribute the results of a campaign. You need to be able to connect what customers did digitally with their actual financial behavior in one central location. What they do after the open or click an email is what’s important. Ultimately, it doesn’t matter who opened your email – what you really need to know is who took the desired action you promoted.

Your CRM must connect data from transactional systems to the list of people that opened or clicked the email. For example, you can create an email campaign with the goal of promoting debit card usage. Most email engines can show you that an email was opened, or a link was clicked, but you want to see who used their debit card more frequently. Attribution of results to email campaigns cuts out the intuition and guessing and lets you actually measure the ROI of a campaign.

Relationship Management in 2021

CRM strategy in 2021 will look a lot different than in years’ past, especially after an incredibly tumultuous 2020. The financial industry and its customers continue to evolve, and relationship strategy must evolve along with it. This means making sure to have the right CRM technology to match these new requirements. A CRM strategy driven by integrated data and integrated email marketing will help set your institution up for relationship success in 2021. 

Interested, but unsure if you’re ready?

What keeps financial institutions from implementing a CRM? Many think they don’t have time, it’s too expensive, it’s too complicated, and so on. We want to recommend starting small at first to avoid getting overwhelmed. We promise, taking that next step will be invaluable to your customer relationships. Still have questions? Contact us.

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