New survey highlights importance of CRM in martech toolbox

By Mark Gibson

CRM systems are reaching critical mass in the banking industry, according to a new survey by the ABA. Nearly half the institutions have implemented a system, and many more plan to in the next 12 months.

CRM effectiveness improved slightly compared to last year, but still has a long way to go in terms of improving marketing’s ability to drive business value. These results reinforce the overall theme from last year’s study that a CRM is the foundational piece of marketing technology. It enables more effective customer onboarding, cross-selling, and enhanced relationship management. This article highlights key findings from the study, discusses important use cases, and shares insights from banks that have successfully implemented their CRM.

CRM is the dominant marketing technology

While CRMs have been around for more than two decades, they are now the most common sales and marketing technology being deployed by banks, with 48% of respondents stating their institution has implemented one. While this number is consistent with last year’s survey, the deployment of marketing automation platforms, marketing analytics and data platforms, and AI-powered marketing tools have increased substantially.

This finding would suggest that the number of banks deploying CRM may be plateauing, but when asked about intentions over the next 12 months, nearly 36% of respondents said their bank plans to invest in a CRM, the highest of any tool. This suggests that, far from stagnating, CRM deployment will continue to grow.

What explains CRMs’ current and growing dominance in the sales and marketing technology space? While not asked in the survey, CPG works with many small and mid-sized banks, and we consistently hear that data-driven sales and marketing collaboration is becoming critically important. While this can be achieved without technology, a CRM makes it much easier and enhances transparency and accountability.

The top use cases we are seeing from a sales and marketing perspective include:

• Sales pipeline management — Especially in business and commercial banking, CRMs help RMs manage pipelines, schedule prospect contacts, and record interactions, providing sales managers with visibility into activity and pipeline status.
• Lead management – a CRM system is an ideal tool to capture, route and follow up on internal referrals and inbound sales opportunities, ultimately improving conversion.
• Campaign management and personalization –– CRMs integrated with marketing automation platforms allow for targeted, data-driven campaigns which enhance response rate and ROI.
• Customer onboarding – CRM systems help automate and personalize outreach during the critical first 90 days after account opening, improving new customer primacy and retention.
• Relationship deepening — Equipping bankers and marketers with a full picture of customer relationships across deposit, loan, wealth, and digital channels enables more effective needs assessment, resulting in happier customers and more profitable relationships.

CRM effectiveness is a work in progress

While we have seen that most banks have either invested in, or are planning to purchase a CRM in the near future, the study also highlights that it’s early days in terms of effective implementation. For instance, only 4% of respondents said that there is widespread adoption and understanding of their CRM. In contrast, 8% said there is either limited or no adoption and understanding.

A counterpoint to this finding is that 20% of the respondents rated the CRM as the most impactful tool in improving marketing’s ability to add value to the organization. This was a significant increase from last year’s survey, as the chart below shows.

Maximizing CRM success – learning from the pros

Banks that have achieved successful CRM implementation share some commonalities. Based on conversations with these banks, we identified the following best practices:

• Establish clear ownership and governance – CRMs sometimes fail because no one owns them. The banks we spoke with assign dedicated ownership and establish data governance practices to maintain quality and consistency.
• Establish ‘use cases’ and goals upfront – CRMs can do many things, but that can actually be a problem. Bankers told us that they debated the various uses and agreed on two or three that would greatly impact their customers and their business. Then they quantified that opportunity and held the team accountable to achieve it.
• Get end-user input – The biggest challenge with a CRM is getting bankers to use it. The best way to overcome this is to involve them early in the process to understand from their viewpoint how a CRM could make them more successful, and build that into the design and UX of the system.
• Align CRM workflows with banker processes – Related to the previous comment, successful systems are integrated into existing banker workflows rather than becoming ‘another thing I have to do.’
• Integrate the CRM with core systems and customer data – A single source of the truth is essential for buy-in. It’s important that information in the CRM comes from, and agrees with, data in your core, other auxiliary systems, and your data warehouse or other customer database.

CRM is becoming ‘The way we do business’

This year’s ABA survey suggests that for half the industry, a CRM is integral to how banks serve their customers and manage their sales and marketing teams. From a service standpoint, industries like airlines have trained customers to expect that all their information is at the service representative’s fingertips. Marketers have found that refining a target audience based on their banking behavior can dramatically improve campaign success. Bankers, especially business and commercial bankers, have seen the productivity-enhancing benefits of CRM, which helps them source, nurture and manage prospects and customers. While many institutions are early in the adoption process, the survey clearly points the path forward.

Mark Gibson is co-leader of the sales and marketing practice at Capital Performance Group, a strategic consulting firm that helps financial institutions maximize the ROI of their marketing efforts. He can also be reached on LinkedIn or at [email protected].