ABC XY Bank combined customer base reaches more than 3 million customer in more than 650 branches. The bank now operates double the volume and at the minimum needs to maintain its customer base. Your team is asked to evaluate current service operations, segment and analyze the customer base and devise a customer contact blueprint that balances the cost of service with the current and potential value of customer relationship. What would you propose?
To help me in developing a customer relationship management strategy, I will use SAP software as Accenture has suggested, both SAP CRM and SAP ERP. And here is the solution map of this software :
As stated in the previous case study, ABC Group which is the fifth largest financial services provider in Southeast Asia has a plan to merge two bank, Bank X and Bank Y which locate in Indonesia. This merger purpose to achieve the vision of ABC Group to be “Southeast Asia’s most valued universal bank”. The merger process will be create a new bank entity, named “ABC XY” bank by total assets of more than USD 10 billion and also among the top five in terms of distribution network in Indonesia.
The merger process delivers the new bank entity, ABC XY bank, to have customer size larger than before with huge customer base about more than 3 million customer in more 650 branches. It also strengthened the core strength of the bank that provides strong corporate market player and also strong consumer and commercial market. By doing the merger, ABC XY bank gives customer a wider array of product choices and commoditized many product innovation. As product differentiation becomes more difficult, the bank’s brand value must be more closely linked with its customer service. More than anything else, the new customer base want high-quality, real-time service in all communication channels of ABC XY bank. This fact bring ABC XY bank must give a better understanding of their customers and integrate front- and back-office activities more completely.
To have a better understanding of the customers, our team will lead ABC XY bank to be “customer-centric”. It means we will confirm who their best customers are, and make sure they know how loyal their customers are and what makes the customers loyal. This process will be helped also by SAP software, SAP CRM and SAP ERP to give flexibility and integration that the bank need to define.
The Need For Customer Centricity
Accenture’s High Performance Marketing and Customer Management research has shown that one of the defining characteristics of high-performance business is their ability to deliver a differentiated customer experience : tailored to specific customer values, needs and intentions, and consistent with the brand promise. Mastering this ability drives customer loyalty which in turn contributes to financial performance and greater shareholder value. The challenges to being “customer-centric” in the current business are many seen falling into three categories : knowing the customer, reaching the customer, and delivering a differentiated.
This customer-centric approach will be adopted to ABC XY Bank so that the bank could give further analysis of their customer with SAP application. The three categories that has mentioned before are described in the below :
Three Categories in customer-centric – Adopted from Accenture
Mutidimensional Picture of Target Segment of Customers (Source : Accenture)
In addition, Accenture has developed a model depicting several cross-regional consumer segments representing strategic growth opportunities over the next decade. And this is the model in region Asia.
- Young Royals : urban, with-collar workers that have high disposable income and feel the need to live up their high social status trough strong affinity to famous international brands.
- Trend Seekers : young, westernized, and typically living in large urban areas that aim to be recognized as trendy irrespective of brand association.
- Family Enrichers : mature group comprises many retirees, interested to try new experiences and products they missed out on when younger.
- Life Manager : Pragmatic, value-driven and family-oriented and opt for “tried and tested” brands to accommodate a systematic approach to building their savings.
ABC XY bank has customer in region Asia, especially in Indonesia. So I will try to give an analysis of customer’s model of ABC XY bank (from customer characteristic that bank X and bank Y have had before).
- Corporate sector : customer mainly from corporate that has higher cost of funds (from mass affluent customers). It could be predicted that this customers has strong affinity to famous and credible brands of bank because of critical responsibility to a great quantities of people.
- Consumer & Commercial sector : individual and retail, general commerce, and wide characteristic of customer. This customer are predicted to heavy credit card users, that are very excited to the bank that serves them with much offerings which gives advantageous to them.
By knowing what customers want, ABC XY bank can create a better basis for determining needs, predicting behavior and shaping customer experiences accordingly.
SAP CRM (Customer Relationship Management)
SAP white paper said that establishing and strengthening long-term relationships with the customers is the key to success. It’s the focus of customer relationship management. CRM involves far more than automating processes in sales, marketing, and service and then increasing the efficiency of these processes. It also involves conducting interactions with customer on a more informed basis and individual tailoring them to the customers’ need.
SAP CRM Marketing
The goal of marketing is to generate customer awareness and demand of the product that we offer. ABC XY Bank offer wide product choices and commoditized many product innovation so our team will define the marketing strategy and plan. Marketing strategy are used to determine how ABC XY bank want to use their limited marketing resources to give the best brand awareness and sales revenue from their customer. After the marketing strategy defines the goal ABC XY bank want to be achieved, we arrange marketing plan to describe the details of how we plan to achieve those goals. It could be done by composed marketing plan elements such as campaigns and trade promotion.
- Campaign contains information like the campaign objectives, tactics, priority, channel (email, telephone, etc) and target market.
- Trade promotion contains information like product choices, trade funds, other promotions, and etc.
SAP CRM Marketing would assists ABC XY bank in planning, budgeting, executing, analyzing, and optimizing all aspects of marketing and campaign execution. As described in SAP solution map, marketing have some major components as shown in Figure 3.1.
|Marketing Resource Management (MRM)||ABC XY Bank can plan and forecast, manage costs and budgets, control digital assets such as brands, logos, and so on and also can publish calendars of marketing events.|
|Market Planning and Budgeting||This application provides ABC XY bank ability to analyze past market budgets (from the its origin, bank X and bank Y) and create a forecasting based on the historical data.|
|Segmentation||ABC XY bank which is the new entity that is produced from the merger process need to build the new target customer base for marketing campaigns. SAP CRM bring the bank to create new target customers from its existing customer database (call center, customer contact records from both of the bank, website, and so on).|
|List management||This applications provides data mapping between source data fields and SAP CRM data fields, duplicate check (between owned and acquired leads), data cleansing, address validation, measurement of list analysis. It can help ABC XY bank to manage customer master records.|
|Campaign Management||Using SAP Campaign tools, ABC XY bank can graphically model a campaign and conduct campaign simulation.|
|Trade Promotion Management||TPM can help organization to increase the effectiveness of their in-store retail promotion. For ABC XY bank, this promotion may be given from percentage of credit rates.|
|Lead Management||SAP CRM lead management functionalities allow ABC XY bank to manage all marketing channels, including telemarketing, email marketing, Web-based promotions, etc.|
SAP CRM Sales
SAP CRM also helps sales professionals that ABC XY bank has, become more efficient and effective. It helps ABC XY bank to plan, execute, and analyze sales operations throughout the sales cycle, find new ways to accelerate buying decisions, uncover new areas of revenue potential, and implement new methods to improve sales productivity.
|Sales Planning and Forecasting||This application provide a complete picture of projected revenue and anticipated sales volume over time with coordinated planning and execution of sales activities across all channels.|
|Territory management||It can optimize sales resources across clearly defined territories and also can improve resource utilization so ABC XY Bank would place the right resources in the right locations at the right time to optimize team performance.|
|Account and Contact Management||This function provide ABC XY Bank a single, comprehensive view of all information necessary to manage the sales accounts. It can also access key contacts, critical relationships, detailed customer profiles, and the status of all recent interactions at anytime and from any location.|
|Activity Management||ABC XY bank will manage customer visits, account profiles, and activity-driven sales processes with this function and also can synchronize all e-mail, contacts, calendar entries, and tasks with leading groupware solutions.|
|Opportunity Management||Using opportunity management, ABC XY bank can track, qualify, and distribute leads to the most appropriate sales professionals and monitor the conversion of opportunities into revenue.|
|Quotation Management and Order Capture||It will guide sales professionals through the product configuration process to ensure that complex product and service recommendations fully meet customer requirements.|
|Sales Contract Management||ABC XY bank will be helped to develop and manage long-term customer contracts, incorporate customer agreements into ongoing customer processes, and monitor the sales process from inquiry to completion.Seamlessly integrate with back-end financial and accounts receivable processes to generate invoices, process payments, credit returns, and process claims.|
|Sales Performance Management||ABC XY bank can develop, implement, and manage compensation plans to retain and motivate the sales professionals to succeed.|
SAP CRM Service
SAP CRM can reduce the service cost of ABC XY bank while raising customer satisfaction by increasing efficiency and delivering consistent high-quality service that provides better services than its origin, Bank X and Bank Y.
|Sales and Marketing for Services||It can develop and execute targeted, installed-base marketing campaigns. And also can generate and process service contract quotations, and service orders.|
|Service Contract Management||It can be used to manage service contracts, automatically verify entitlement, manage service-level agreements, and alert agents when a customer’s contract is about to expire.|
|Customer Service and support||Access information on service histories, contracts and service entitlements, service levels, installed base, and warranties through an easy-to-use interaction center screen.|
|Field Service Management||Organize, plan, and deliver service resources to meet service demands using Gantt charts, geo-maps, or a powerful optimization engine.|
|E-Service||By using E-Service which is E-banking, ABC XY bank will provide a secure, personalized portal for customer support and service over the Web.|
|Channel Service||It is used to manage and assign external resources to customer services orders and enable third-party technicians to receive, execute, and confirm service orders.|
|IT Service Management||Streamline IT helpdesk operations with ITIL-compliant solution for incident, problems, request for change, and so on. And also ensure alignment between IT operations and business priorities through native integration between SAP CRM and SAP ERP.|
In addition, SAP Customer Relationship Management (SAP CRM) also includes features and functions in the following areas :
- Partner channel management – Attain a more profitable and loyal indirect channel by managing partner relationships and empowering channel partners. Improve processes for partner recruitment, partner management, communications, channel marketing, channel forecasting, collaborative selling, partner order management, channel service, and analytics for partners and channel managers.
- Interaction center – Maximize customer loyalty, reduce costs, and boost revenue by transforming your interaction center into a strategic delivery channel for marketing, sales, and service efforts across all contact channels. Activities such as telemarketing, telesales, customer service, multifunctional shared service, and interaction center management are supported.
- Web channel – Increase sales and reduce transaction costs by turning the Internet into a valuable sales, marketing, and service channel for businesses and consumers. Increase profitability and reach new markets with functionality for e-marketing, e-commerce, e-service, and Web channel analytics. Deploy these capabilities directly against the SAP ERP application or with SAP CRM as a fully integrated customer channel.
- Business communications management – Improve contact center and communication-dependent business process effectiveness and reduce costs through SAP Business Communications Management – an all-software, IP-based communications solution, natively integrated with SAP CRM. Whether customers contact your company by phone, e-mail, chat, text message, or fax, SAP Business Communications Management routes the contact to the right person with the right skills, whether the person is in the office or working remotely – all without the need for costly, cumbersome hardware-based communications systems, significantly reducing total cost of ownership.
- Real-time offer management – Advanced recommendation engine that optimizes any decision-making process across all customer interaction channels, enabling you to take the most appropriate next action to enhance customer relationships and maximize your customers’ lifetime value.
SAP ERP (Enterprise Resource Planning)
SAP stated that ERP Solutions could improve integration between business processes and technology for seamless transparency between ERP systems and other corporate application. ERP solutions must also provide readily available, secure access to all internal functions and processes by every bank employee, customer, vendor, and partner. By using SAP ERP, ABC XY Bank can provides comprehensive support for banking enterprise support activities including financial processes, human capital management, and technology.
ERP (Enterprise Resource Planning) system means that in this systems the different applications employ a shared database. The result is that all applications’ data are updated simultaneously, since they actually are using the same data. Implementing enterprise wide systems can be extremely rewarding. By streamlining data flows throughout an organization, these system could dramatically affect the company’s efficiency and bottom line. From SAP solution map we know that sales and service operation will be integrated with SAP ERP so that these operation are expectable to be effective and efficient.
Analyzing rich customer information using SAP CRM and integrate their business process using SAP ERP, gives ABC XY bank to a further opportunity to differentiate their approach for customer service. The ability to interpret the new customer base’ situation helps ABC XY bank to introduce the right offer to the right customer at the right time. It also give the bank more effective and efficient cost using to the all processes that are done to achieve customer satisfaction. And finally, it can transform the bank into a profit center.
- Accenture. Back To Customer Centric Basics.
- Accenture. Customer Acquisition and Retention. Creating Customer Loyalty : A Customer-Centric Approach.
- Accenture. New Faces, Places, and Spaces. Customer-Centric Principles for Acquiring Customers in Today’s Multi-polar World.
- SAP White Paper. Analytical CRM.
- SAP Solution Brief. Banking : Differentiate Through Service Excellence With SAP CRM. Optimizing Customer Satisfaction, Efficiency, and Profit.
- SAP Press. Discover SAP CRM.
- www.SAP.com (cited : February 1st.2011)