Over the years, banks have invested billions of dollars in CRM systems, yet it is reported that between 18 per cent and 70 per cent of them will run over budget, suffer data integrity issues, have technology limitations, or cannot realise the expected growth in the business that pays for them.
There are several reasons for this, including:
The adage ‘garbage in, garbage out’ is relevant. Unless the data being input to the CRM is reliable, then it won’t be of any use to employees using it, whether it is front-line or analytics, or marketing. CRM exposes poor data quality.
Even though the typical bank’s executives sign-off millions of dollars expenditure on CRM, many don’t provide their support to help successful implementation, employee adoption, and payback.
One failure is thinking that by implementing a CRM system, the bank will become ‘customer-centric’. It won’t, and like ‘customer-centricity’, implementing a CRM system is potentially disruptive.
Employees who are supposed to use the system to help them do their job aren’t engaged. They may fear the purpose used to inspect their activity. This causes a failure to adopt after implementation.
In the 1990s, many banks bought CRM systems although they did not know what they wanted to do with the system, which often led to poor implementation and low employee adoption rates.
The first CRM systems were developed for branch-centric banks where customer interactions were conducted face-to-face.
When telephone banking was implemented in the mid-1990s, additional functionality was tagged on to add this channel to allow customer service representatives to replicate processes that the branch had undertaken.
Fully remote channels such as Internet Banking and Mobile Banking have further strengthened, but sometimes complicate the role of the CRM system as employees who meet customers face-to-face have a much smaller role. As a result, many banks’ executives cannot ask, “Why are we implementing a CRM system?”.
Decisions to buy a CRM system are often made by the Marketing and IT departments, who make selections based on their criteria, not those of the ultimate user.
Many organisations whose CRM cannot achieve its goals forget this golden rule: ‘people, process and technology’, in that order, and focus on the technology, forgetting that ‘people’ (customers and employees) should be the focus. People and process come before the technology.
This follows the previous point, as processes must be realigned to the customer’s journey, whether they are buying or using a product or service.
Implementing a new, or replacement, CRM system requires meticulous project planning and execution. Scope creep, where new functionality is added after requirements have been signed off, often causes budget overruns and implementation delays or lack of functionality.
Other failures are caused by overwhelming users with new functionality all at once.