Customer Centric Experiences & Insights (Making Love for Profit) Stephen Coulter,  Managing Director $ © 2006 Emerging Tho...
What Customers Want <ul><li>Spend less time banking and changing banks… </li></ul><ul><li>A bank that knows/respects/manag...
Is Your Organisation Customer Centric? <ul><li>Is there a single customer file linking relationships across your organisat...
June 1989 – Paul Keating Helps a Bank! <ul><li>Home loan interest rates hit 17% </li></ul><ul><li>Unable to provide direct...
<ul><li>Home loan interest rates hit 17% </li></ul><ul><li>Unable to provide direct tax relief the Treasurer announces off...
How the Bank Leveraged The Event <ul><li>Protected the key deposit base by developing and launching the first major bank c...
Commonwealth Bank 1998 <ul><li>CBA introducing segment management in March 1998 </li></ul><ul><li>Basic segment reporting ...
Over 3 Years Drove Rapid Adoption of Internet Banking Maintaining High Value Customer Profile Source: Commonwealth Bank In...
Customer Management Model (Able to be run at any segment level) Customer Management Model Customer Value Driven Management...
KPI’s to Manage Customer Segments Different Targets for Different Segments Customer Retention Customer Retention Customer ...
Areas of Focus Customer Segmentation & Analytic Capabilities Event Marketing  Capabilities Customer Needs-Based Solutions ...
Barriers to Customer Centricity <ul><li>Believing the talk and not walking it </li></ul><ul><li>Management seeing customer...
Key Success Factors <ul><li>Leadership, People </li></ul><ul><li>Relationship between sales and marketing </li></ul><ul><l...
Find Out More <ul><li>Stephen Coulter </li></ul><ul><li>040.333.8888 </li></ul><ul><li>[email_address] </li></ul>
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Emerging Thought Siebel February 2006

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Ahigh level presentation on customer centricity and leveraging data through CRM

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Emerging Thought Siebel February 2006

  1. 1. Customer Centric Experiences & Insights (Making Love for Profit) Stephen Coulter, Managing Director $ © 2006 Emerging Thought
  2. 2. What Customers Want <ul><li>Spend less time banking and changing banks… </li></ul><ul><li>A bank that knows/respects/manages their relationship </li></ul><ul><li>A bank that makes better offers to retain loyal customers than it offers its new customers </li></ul><ul><li>A bank that makes it easier for them to deal with it than another bank </li></ul><ul><li>A bank that doesn’t make “junk mail” offers unrelated to customer need </li></ul><ul><li>A bank that provides customer contact staff with information to manage customers better </li></ul><ul><li>A bank that knows them……… </li></ul>
  3. 3. Is Your Organisation Customer Centric? <ul><li>Is there a single customer file linking relationships across your organisation? </li></ul><ul><li>Can customer relationships be linked and aggregated? </li></ul><ul><li>Are common customer management segments used across your organisation? </li></ul><ul><li>Is customer management information available pervasively? </li></ul><ul><li>Are customer segment managers in place to support, manage or coordinate customer strategy across business units? </li></ul><ul><li>Is customer value an organisational driver? </li></ul><ul><li>Can Customer Acquisition, Retention, Share of Wallet & Profit be Measured? (& accepted across the organisation) </li></ul><ul><li>Do common processes/procedures exist across products/channels to make it simple for the customer to deal with your bank? </li></ul><ul><li>Are existing customers eligible for offers made to new customers? </li></ul>
  4. 4. June 1989 – Paul Keating Helps a Bank! <ul><li>Home loan interest rates hit 17% </li></ul><ul><li>Unable to provide direct tax relief the Treasurer announces offset accounts </li></ul><ul><li>What Happened at the Bank </li></ul><ul><ul><li>Segment manager assessed logical customer reaction </li></ul></ul><ul><ul><ul><li>Have deposits and home loan at same bank </li></ul></ul></ul><ul><ul><ul><li>Easier to move deposits than home loan </li></ul></ul></ul><ul><ul><ul><li>What is the threat to the Bank’s deposit base? </li></ul></ul></ul><ul><ul><li>Customer information system was available bank wide </li></ul></ul><ul><ul><ul><li>Information updated monthly </li></ul></ul></ul><ul><ul><ul><li>Simple menu driven that anyone in branches or head office could use </li></ul></ul></ul><ul><ul><ul><li>Customer centric system including customer profit updated monthly </li></ul></ul></ul><ul><ul><li>Segment manager ran simple query </li></ul></ul><ul><ul><ul><li>Find customers with deposits at the Bank that are most likely to have home loan at another bank </li></ul></ul></ul><ul><ul><ul><li>CIS found over $Xbillion in deposits at risk </li></ul></ul></ul><ul><ul><ul><li>Segment manager had executive attention and the business case to get resources </li></ul></ul></ul>
  5. 5. <ul><li>Home loan interest rates hit 17% </li></ul><ul><li>Unable to provide direct tax relief the Treasurer announces offset accounts </li></ul><ul><li>What Happened at the Bank </li></ul><ul><ul><li>Segment manager assessed logical customer reaction </li></ul></ul><ul><ul><ul><li>Have deposits and home loan at same bank </li></ul></ul></ul><ul><ul><ul><li>Easier to move deposits than home loan </li></ul></ul></ul><ul><ul><ul><li>What is the threat to the Bank’s deposit base? </li></ul></ul></ul><ul><ul><li>Customer information system was available bank wide </li></ul></ul><ul><ul><ul><li>Information updated monthly </li></ul></ul></ul><ul><ul><ul><li>Simple menu driven that anyone in branches or head office could use </li></ul></ul></ul><ul><ul><ul><li>Customer centric system including customer profit updated monthly </li></ul></ul></ul><ul><ul><li>Segment manager ran simple query </li></ul></ul><ul><ul><ul><li>Find customers with deposits at the Bank that are most likely to have home loan at another bank </li></ul></ul></ul><ul><ul><ul><li>CIS found over $Xbillion in deposits at risk </li></ul></ul></ul><ul><ul><ul><li>Segment manager had executive attention and the business case to get resources </li></ul></ul></ul>June 1989 – Paul Keating Helps a Bank! All of this happened before 9:00am the morning after the Treasurer’s announcement! How long would it take at your bank now – 17 years later?
  6. 6. How the Bank Leveraged The Event <ul><li>Protected the key deposit base by developing and launching the first major bank cash management account </li></ul><ul><li>Developed the home loan solution and home loan simulator to drive home loan market share (& cross-sell off it) </li></ul><ul><li>Developed a mortgage offset services around the customer to drive deeper relationships </li></ul><ul><li>All actions significantly exceeded targets and gained CEO & Executive support for the Bank’s customer centric strategy and further development of capabilities </li></ul><ul><li>The Bank’s market share gains from 1990-95 show the effectiveness </li></ul>
  7. 7. Commonwealth Bank 1998 <ul><li>CBA introducing segment management in March 1998 </li></ul><ul><li>Basic segment reporting implemented allowing segmented analysis of profit, account holdings, channel usage, etc </li></ul><ul><li>NetBank was a new service with ≈20,000 customers </li></ul><ul><li>Analysis showed much higher profit and cross sales potential for online banking users </li></ul><ul><li>Internet growth rates far quicker than banking </li></ul><ul><li>Established online segment manager and used NetBank as a cross-sale, retention and acquisition tool for high value customers </li></ul><ul><li>Leveraged internet market growth rates into banking </li></ul>
  8. 8. Over 3 Years Drove Rapid Adoption of Internet Banking Maintaining High Value Customer Profile Source: Commonwealth Bank Investor Relations Website June 2001 Analyst Presentation
  9. 9. Customer Management Model (Able to be run at any segment level) Customer Management Model Customer Value Driven Management Model Customer Acquisition Acquire customers your Bank wants to retain Build relationships that drive value for customers and the Bank Customer Share of Wallet Customer Retention Retain customers & build relationships Customer Value Target customers your Bank is best able to provide value to and derive value form
  10. 10. KPI’s to Manage Customer Segments Different Targets for Different Segments Customer Retention Customer Retention Customer Tenure Customer Balance Retention Customer Profit Customer Management Hierarchies Customer Profit/Revenue Margins & Fees Customer Share of Wallet Balances Per Customer Product Groups/Customers Product Penetration Rates Customer Acquisition # New Customers Replacement Rate Customer Value Driven Management Model
  11. 11. Areas of Focus Customer Segmentation & Analytic Capabilities Event Marketing Capabilities Customer Needs-Based Solutions Sales & Relationship Management Capabilities Prerequisites Customer Information File Group Data Warehouse Data Integration & Synchronisation Data Integrity Reliable MIS <ul><li>Ability to identify customers relationships across the Bank </li></ul><ul><li>Segmentation framework that is accepted and applied across the Bank </li></ul><ul><li>Customer metrics including profit </li></ul><ul><li>Event library </li></ul><ul><li>Event detection rules </li></ul><ul><li>Lead Management </li></ul><ul><li>Offers combining products, services and information required to fully meet the financial needs of the customer related to the event </li></ul><ul><li>Sales System </li></ul><ul><li>Sales Management & Leadership </li></ul><ul><li>Relationship Behaviours & Incentives </li></ul><ul><li>Pipeline measurement and management </li></ul><ul><li>Refine offers based on customer interactions </li></ul><ul><li>Real Time Decisioning </li></ul>Leverage Direct Customer Feedback See Siebel IBM Research
  12. 12. Barriers to Customer Centricity <ul><li>Believing the talk and not walking it </li></ul><ul><li>Management seeing customer centricity as an alternative to product or distribution models </li></ul><ul><li>Independent business units not collaborating or lack of a cross business unit customer strategy/segment support or management group </li></ul><ul><li>Management information systems not supporting customer centricity </li></ul><ul><ul><li>Or being built around products and/or channels </li></ul></ul><ul><li>No crisis yet…… </li></ul>
  13. 13. Key Success Factors <ul><li>Leadership, People </li></ul><ul><li>Relationship between sales and marketing </li></ul><ul><li>Common information source (Finance, Products, Operations, Customers) </li></ul><ul><li>Customer “ownership” </li></ul><ul><li>Make it simple and convenient for your customers to do business with you – leverage the knowledge you have to achieve this </li></ul><ul><li>Implementation Phasing – </li></ul><ul><ul><li>Start with basic segments that can be measured reliably </li></ul></ul><ul><ul><li>Know which customers you want and focus efforts </li></ul></ul><ul><ul><li>Share basic customer information across your bank </li></ul></ul><ul><ul><li>Stop doing things that aren’t win: win for the Bank and targeted customers </li></ul></ul><ul><ul><li>Prioritise retaining/developing targeted customers ahead of acquisition </li></ul></ul><ul><ul><li>Put basic customer management KPI’s in place </li></ul></ul><ul><ul><li>Target segments with solutions not products </li></ul></ul>
  14. 14. Find Out More <ul><li>Stephen Coulter </li></ul><ul><li>040.333.8888 </li></ul><ul><li>[email_address] </li></ul>

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