Customer Relationship Management Overview

Investing in CRM systems can increase the total income generated per client for banks.

It costs less for a company to sell to an existing customer than to acquire a new one.

Customer loyalty is especially important for financial services due to the nature of the products and services offered.

The costs of serving loyal customers decrease over time as banks learn their needs and preferences.

A well-defined brand promise helps guide employee behavior and create a consistent customer experience.

Strong branding helps differentiate a company from its competitors by creating a unique value proposition.

Branding is an important input factor for customer management in the banking industry.

The most valuable brands usually have a strong brand identity and are associated with positive customer experiences.

The ability to gather, understand, and utilize customer data to improve services and build stronger relationships.

A customer-centric approach that focuses on delivering seamless experiences across all touchpoints, including branches, ATMs, call centers, online and mobile platforms, and social media.

The ability to provide personalized services and experiences based on understanding customer needs and preferences.

A structured process for analyzing unstructured and structured customer data to gain insights into their needs, behaviors, and preferences.

Utilizing data to create targeted campaigns and events to engage customers and promote relevant products or services.

An integrated approach that guides customers through the decision-making process, offering tailored advice to meet their financial needs.

Developing a strong brand image and communication style that resonates with customers and builds trust.

Creating and delivering customer experiences that are both convenient and effective throughout the entire customer journey.

CRM is not just a database for marketing, it's a comprehensive approach to managing customer relationships across the entire customer lifecycle.

CRM is not just about loyalty schemes, it's about understanding your customers' needs and delivering value throughout their journey.

CRM is not an IT issue, it's a business strategy that requires alignment across departments to ensure success.

The IDIC model focuses on identifying customers, differentiating their needs, interacting with them effectively, and customizing solutions for a personalized experience.

The CRM value chain outlines 5 stages that lead to customer profitability, starting with strategic planning and ending with successful customer interactions.

Panye and Frow's 5-process model highlights essential aspects of CRM, including strategizing, creating value, integrating channels, assessing performance, and managing information.

Gartner's model defines 8 essential areas for effective CRM implementation, covering everything from customer insights to sales and service processes.

Customer management in banking involves understanding the target audience, balancing customer needs with bank goals, setting fair prices, and ensuring customer value.

A method of categorizing customers based on their revenue contribution. Pareto principle dictates that 20% of customers generate 80% of revenue. This analysis classifies customers into tiers (A, B, C) based on their profitability, allowing businesses to focus resources on high-value customers.

A calculation that determines the profit generated by each individual customer. It looks at their gross profit (revenue - cost of goods sold) and net profit (gross profit - all other costs).

A valuation method that considers the present value of all future profits a customer is expected to bring in. It factors in revenue, costs, and a discount rate to account for the time value of money. This helps businesses understand the long-term worth of each customer.

A common issue with customer lifetime value (CLV) calculations. It requires making assumptions about revenue, costs, and future behavior (like churn), making the final result potentially inaccurate.

A customer segmentation method that uses three metrics: Recency (last purchase date), Frequency (number of purchases), and Monetary Value (total amount spent), to categorize customers. This helps identify high-value customers with good purchase history.

An analysis that combines CLV with the likelihood of a customer churning (leaving). It predicts a customer's potential future value considering their risk of churn.

The design and analysis of a customer's experience before, during, and after interacting with a business.

A semi-fictional representation of a target customer based on research and data. Personas capture demographic, psychographic, and behavioral characteristics.

Any interaction a customer has with a company, including online, in-person, and communication channels.

The process of understanding and meeting a customer's needs and wants throughout their interaction with a business.

This method uses empirical data to understand customer behavior and motivations, making it highly effective for designing user-friendly products and services.

The process of mapping out the key steps a customer takes when engaging with a company's product or service.

Using customer personas to inform every stage of the product development process, ensuring that the final product meets the needs and desires of the target audience.

Understanding and addressing customer concerns can be a valuable source of insights for improving products, services, and customer experiences.

This is different than marketing goods and focuses on building strong relationships with customers. It started gaining traction in the 1990s.

A marketing strategy that aims to optimize customer profitability by building relationships with customers.

The idea that a business should focus on understanding and meeting customer needs above all else. It emphasizes delivering value to individual customers.

The process of engaging with your customers at different stages of their journey. This is crucial in today's digital landscape.

This includes all the experiences a customer has before they purchase something. This includes things like recognizing a need, researching options, and considering alternatives.

This covers all the customer interactions during the purchase process. This includes choosing a product, placing an order, and making a payment.

This includes all interactions after a purchase. It can last until the end of the customer's relationship with the product or service, including usage, feedback and service requests.

These are the different points of interaction a customer has with a brand across different channels.