Banks that solely implement customer relationship management at an internal sales management level rather than for improving customer service are missing the point, says Chris Skinner.

In the early 1990s, firms flocked to business process re-engineering (BPR). BPR focused on taking tired, old business processes and giving them a fresh injection of ideas. The dream was to increase revenues and reduce costs, but most firms failed to realise this dream.

The issue lay with tinkering around with processes rather than radically transforming the business around customers’ needs. We now live in the age of customer relationship management (CRM) and exactly the same has happened. Banks are taking the easy option of adding CRM to existing structures and expecting big rewards, with very few realising such gains. The reasons appear to be because far too many firms implement CRM for internal sales management rather than improving customer service.

The proof was highlighted by a recent Bearing Point survey of leading financial institutions. The survey found that the financial services industry is investing billions in CRM projects that focus on internal efficiencies rather than customer experiences. The same institutions agreed that better customer experiences would improve customer loyalty, and yet they invest less than $1m annually in customer experience programmes.

The customer experience is his emotional reaction to any interaction, be it via mail, phone or in-branch. Many banks assume that delivering a good interest rate and functional product is all that is needed to gain and retain customers. Products and rates focus on the headline, the customer’s intellect. It is the heartline that retains the customer – “we made you feel good about us in all of your dealings with us”.

The heartline is the emotion that encourages people to be loyal and to recommend services to their friends and family. Therefore, it is incredulous that banks are wasting so much money on internal sales tracking and management information through CRM, while hardly investing in the customer experience across all interactions.

How do you change this? You redesign your business processes from a customer’s view of the experience they want you to deliver at every interaction point. You design your business processes and organisational structures to reflect this strategy and, as part of this process, technology requirements are only considered in terms of how they enhance the customer experience.

This has little to do with applying CRM and much more to do with a clear vision and understanding of customers’ needs. As for CRM, true relationships are marriages and if banks cannot marry customers’ needs to experiences, then banks will be continually caught in the trap of speed dating.

Chris Skinner is founder of Shaping Tomorrow and chief executive of Balatro Ltd. Find out more at or e-mail Chris at


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