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| 2Q '09 | 1Q '09 | |
| # of CUs | 7,982 | 7,998 |
| Members (millions) | 91.9 | 91.7 |
| Total Assets ($ billions) | 871.8 | 867.4 |
| Total Savings ($ billions) | 741.8 | 737.2 |
| Net Cap. /Assets | 9.6% | 9.6% |
| Loans to Savings | 78.5% | 78.8% |
| Loan Delinq. | 1.60% | 1.54% |
Yes, There Are Some Successful CRM Implementations
But as many as 80% of CRM programs fail to deliver on core promises
A recent white paper from CUNA's Technology Council looks at factors for success in customer relationship management (CRM) programs. It also examines the difficulties associated with many attempts at CRM.
At CRM's core is what credit unions have been practicing since the beginnings of the movement—placing the member's needs first in the financial relationship. The critical difference today is that technology is enabling a more effective CRM culture. The latter is an important distinction: CRM is not a set of technologies; it's a business strategy and culture.
Perhaps the simplest definition of CRM is "a process of developing a sales and service culture enabled by technology." CRM includes any strategy a credit union uses to create a consistent, valuable member experience that leads to retention and expansion of the member relationship.
Why CRM?
Economics and competition are key drivers of CRM. It's no secret that financial institutions are experiencing a squeeze on their net interest margins. Rising interest rates and a leveling-off in the mortgage market also necessitate a sharp eye on income and costs. Toward this end, CRM can help identify member profitability as well as the cost of each service and product.
Benefits of CRM include:
- Improve financial performance by increasing sales, net earnings, and capital.
- Gain and access better information about members, including branch or online use.
- Provide an overview of member accounts and delivery channels.
- Inform members about services and products of potential interest.
- Track and improve service-related performance metrics.
- Help move members away from unprofitable behaviors, and determine pricing based on information collected.
When a member comes into a credit union that has an effective CRM system and an employee pulls up the member's account, information about that member is available on the computer screen. "It's the Holy Grail of financial services—an integrated system where one screen gives the employee all relevant information about that member's relationship and activities," says Eric Acree, executive vice president, Vantage Credit Union, Bridgeton, Mo.
CRM mishaps do occur, however, and successful implementations remain in the minority. Findings indicate that 60% to 80% of CRM programs fail to deliver on their core promises. Reasons for poor results: the culture fails to change, technology is viewed as the solution, other organizational needs come first, or vendors fail to deliver on promises.
The ingredients to a successful CRM implementation include: planning, culture change, a business strategy, sales training, appropriate technology, and effective communication. "CRM resources are in the following order of importance: 50% people, 35% process, and 15% technology," says Acree.
CRM and relationship pricing travel along parallel paths, and both are becoming more critical to credit union survival. For a relationship-pricing program to succeed, it requires accurate and accessible data CRM can provide.
The white paper "Successful CRM Implementations: A Journey of Culture, People, and Technology" is available at the CUNA Technology Council Web site.
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