Mobilising the value chain

By placing service quality above price, banks can achieve greater profitability. Blake Williams, president of Revenue Enhancement for Carreker Corporation, discusses creating and sustaining the critical linkages between strategy and execution.

Optimising the customer value chain is critical to achieving organic growth targets. Improve the customer experience, and revenue and profitability will increase. Effective relationship management is the key to enhancing shareholder value. Yet most of the billions spent on customer relationship management (CRM) systems have not yielded the expected results. Gartner has calculated that 70 per cent of CRM projects are falling well short of targeted gains. The sheer size and complexity of projects has undermined their success, but the core failure has been a disconnection between executive strategies and daily execution throughout the organisational value chain.

The overwhelming nature of the process means institutions are trying to do too much, too fast, on an excessively complex level. Classic pyramid management structures encourage everyone - from IT through sales and marketing to back and front offices - to deliver only the component of change that impacts their department. In effect, they are rewarded for pushing out only their bit rather than focusing on the impact of the combined project. Yet the management assumption behind the project has been that the construction of a sophisticated information system will automatically integrate the required elements of the programme and change the behaviour of its people. It does not. It generates information, but it neither generates the skill set nor the incentives to use and enhance the value of that information.

Customer value enhancement

It is all a question of cultural change; when Carreker is consulted on 'customer value enhancement', it looks to create an integrated sales and service culture with clear and measurable objectives. This invariably involves breaking down large, complex and failing CRM implementations into a series of simpler, more manageable tasks.

What is needed is a moving information loop that integrates the executive vision and provides a closed feedback loop around and through everyone in the value chain. If the chain is broken, it becomes readily apparent, as key indicators will be missing from regular periodic reporting to all key decision-makers and information users.

Executive strategy, resource allocation, frontline activity and customer experience form a symbiotic circle: Carreker provides a framework of process, training and technology (if needed) that enables a closed feedback loop so that mid-course corrections can be made to more rapidly achieve desired results. Often 'quick hits' can be achieved early in the process simply by leveraging existing CRM applications to provide reliable executive reports.

Carreker solutions are generated by bankers for bankers. They benefit from the substantial experience gained from its customer value enhancement engagements worldwide. A recent example of its work was the turnaround of an unprofitable personal banking unit of a growing international bank. Within a single year, monthly sales tripled, service levels rose and profits were generated, all without an increase in staff numbers.

Inherent in Carreker thinking is the belief that service quality is significantly more important than price to customers - they will gladly pay for a good banking experience. Yet ingrained in many banking CRM initiatives is the desire to compete on price. Unfortunately, campaigns driven by volume, such as free chequing and products-per-customer incentives, have not worked as expected because they do not meet the needs of the customer.

Carreker customer value enhancement engagements lead to a far-reaching review of the way its clients view their systems, their products, their people and their customers. Painting a clear picture of an institution's value chain, where and how value is delivered, defining the focus - be it retention, expansion or attraction - and aligning processes and behaviour the organisation, are all key to the way Carreker turns vision into value for its clients.

Further information

Carreker Corporation
Tel: +44 207 469 1600
Fax: +44 207 283 5806
Email: bwilliams@carreker.com
Website: www.carreker-international.com