Customer Relationship Management - Today and Tomorrow

Identifying, attracting and retaining the most valuable customers remain the primary goals of Customer Relationship Management. In this article, we'll take a look at what companies are doing today to build and sustain high-value customer relationships and explore how technology innovation will help drive competitive advantage in the future. The art of managing your customers is hardly a new concept. From the local branch to Wall Street, understanding your customers and treating them right was deemed the sure fire way to building and sustaining loyalty. However, as markets became global and the competitive influences of diverse economies grew, often it was quantity of customers - not quality of relationships - that drove marketing practices. But as customers grew savvier and bolder about their own buying power, the subtle shift from loyalty to fragmented relationships transpired. Running rapidly alongside globalization came technology innovation, taking marketing, sales and service techniques to new levels of sophistication. Since the last decade declared the birth of Customer Relationship Management (CRM) as we know it, few businesses have found themselves short of customer data or the means to use it. Increasingly, banks and other financial services companies organize and analyze customer data in order to drive marketing targeted to customers' needs and preferences. But is understanding what your customers want enough to enable you to develop and retain profitable relationships? And if not, where are financial services organizations heading in the race to win and retain a high-value customer base? Where we are today Accenture believes that the key to effective CRM is to cultivate meaningful insights about customers; insights that reveal not only what makes the customer satisfied, but also what brings profitability to the organization. Although most companies understand that developing insights about individual customers can increase satisfaction and drive sales, few truly understand which insights are critical, how to use them to deliver value, or how to develop them in the first place. Through more than a decade of work in this area, Accenture has identified six key insights that enable companies to obtain a more accurate reading of their most valued customers - who they really are, their needs and their wants, and importantly, the degree of investment justified by their value and potential. (See Fig. 1) In a typical bank, one-third of the customers may account for nearly all of the profits, while subsidizing a substantial number of unprofitable relationships. By understanding which customers to target and with what offerings and communications, financial services companies can ultimately make more intelligent marketing decisions and allocate resources to maximize profitability across the customer base. For example, take Peter, who's wondering what to do with his stock options. He's already valuable to his bank, due to the size of his account and mortgage, but most of his assets have been invested elsewhere, with competitors snapping at his heels for his business. Customers like Peter are leaving clues about their financial plans with every click through the bank's website. If the bank fully understood his potential value and its share of that value, it could invest in ensuring he knows about the organization's investment expertise and product range. Similarly Claire may not seem like the bank's most valuable customer at the moment since she's just graduated and not yet achieved her full earning potential. But that car loan she's looking for as part of the new business she's launching (which will go on to identify her as Business Woman of the Year in a few years time!), is an opportunity for the bank to seek future value from their relationship - and join with her in enjoying her ultimate success. Customer insight goes beyond just data gathering - it's about transforming this data into valuable insights and using it to better target and tailor marketing efforts. …