Hendra Kwik

Managing Customer Relationship At Bank ABC XY

Accenture Do You now Competition

High Performance. Delivered

The Question

ABC XY Bank combined customer base reaches more than 3 million customers in more than 650 branches. The bank now operates double the volume and at the minimum, needs to maintain its customer base. Your team is asked to evaluate current service operations, segment and analyze the customer base and devise a customer contact blueprint that balances the cost of service with the current and potential value of customer relationships. What would you propose?

Case Definition

ABC XY Bank is the result from merger between Bank X and Bank Y by ABC financial group in Indonesia. The business and IT solutions have been in place and now ABC XY Bank has been ready to operate in a new business, with its vision to be Southeast Asia’s most valued universal bank. But, after the integration, Bank ABC XY is facing complex organizational and workforce transition which cause Bank ABC XY’s performance to be at the minimum and risk to many negative impacts (which is popularly known as valley of despair event). This valley of despair event also reduce Bank ABC XY’s reliability and capability for the customers.

In the other side, since Bank ABC XY is the result of the merger between two banks, its customers are significantly increased until double volume. After the merger, Bank ABC XY has 3.3 million customers in total, but as has been explained in the first paragraph, Bank ABC XY’s performance is still at the minimum. The change management strategy has been applied to help Bank ABC XY getting out from the valley of despair event, but somehow it will still need some time until Bank ABC XY can totally get out from the valley of despair event. The problem starts here. The condition where Bank ABC XY’s performance, reliability, and capability are at the minimum, combined with the condition where Bank ABC XY is having double amount of customer (reaching 3.3 million customers) makes Bank ABC XY difficult to maintain its customer base. Bank ABC XY’s difficulty to maintain its customer base is the main problem to be solved in this 3^rd case.

The Challenge

The challenge is to help ABC XY Bank creating a customer relationship management strategy to help eliminating Bank ABC XY’s difficulty to maintain its customer base. The customer relationship management strategy is expected to maintain the current potential value customer relationships with the lowest cost of service. Mainly, the strategy will be about analyzing and designing an effective customer relationship management process, transforming the process into a CRM SAP (Customer Relationship Management System, Application, Product), implementing and testing the CRM SAP, providing training about the CRM SAP to Bank ABC XY’s employees, migrating the previous customer relationship management datas from Bank X and Bank Y which are required into the CRM SAP, launching the CRM SAP (Go-Live), and finally supporting the use of CRM SAP after the launching (Post Go-Live). In the consulting world, this kind of strategy is often called customer relationship management strategy.

The Key Areas

In creating customer relationship management strategy for ABC XY Bank, there are three key areas to be prioritized, those are:

A. Designing Bank ABC XY’s value-oriented strategic customer relationship management process which can maintain the current potential value of customer relationships.

B. Transforming the customer relationship management process into a reliable CRM SAP

C. Implementing the CRM SAP to maintain and even increase the value of customer relationships

The Requirements Analysis

Several requirements that have to be analyzed to create the effective customer relationships management strategy are:

A. Maintaining customer base and its potential value

Since Bank ABC XY is the result of the merger between Bank X and Bank Y, in order to maintain its high-value customer base, the new design of the customer relationship management process for Bank ABC XY must be able to provide consistent-satisfactory products and services for two market segments. Those market segments are corporate market base which was Bank X’s main customer base and consumer & commercial market base which was Bank Y’s main customer base. Besides that, Bank ABC XY’s new customer relationship management process has to maximize the use of currently available products, services, and channels (650 branches, 1267 ATM, and 237 SST).

B. Evaluating current service operations

Current service operations of Bank ABC XY is still disintegrated since the integration process between Bank X and Bank Y service operations system is still in the beginning phase. Besides that, Bank X’s service operations system is totally different with Bank Y’s service operations system. The system’s difference is mainly caused by the difference in market segments, the difference in the legacy systems for credit card business alignment, and the difference in network architectures. The IT strategy has been applied to integrate the system, but again since it is still in the beginning phase, the current service operations is still disintegrated. Thus, the new customer relationship management process has to minimize the negative impacts from this disintegrated system to be able to deliver consistent and satisfactory results to the customers.

C. Segmenting and analyzing the customer base

Currently, there are two main market segments for Bank ABC XY, those are corporate market segment and consumer & commercial market segment. These market segments are the biggest customer base for Bank ABC XY, thus they must be the main focus in the new customer relationship management process.

D. Devising a customer contact blueprint

Customer contact blueprint is very essential to maintain the customer base. Customer contact blue print can be devised by creating a structured customer data management. The customer data management will include past business and transaction data of Bank ABC XY’s 3.3 million customer accounts. It will become the element of customer insight for Bank ABC XY. This customer data management will equip Bank ABC XY with the ability to understand customer needs and accurately predict customer behavior. This ability is very essential to capture critical customer data and analyze that data to create deep insights into how Bank ABC XY’s customers behave, how they would like to interact with the Bank ABC XY, and what they truly want and need from the Bank ABC XY. In turn, these insights will determine how Bank ABC XY must interact with its 3.3 million customers in the future, such as what offers/programs to make and what service options to provide. Thus, a structured customer data management must be equipped in the new customer relationship management process and it should be available to any organizational units that have contact with the customer.

The Solution

Figure 1: Impact of Implementing Change Management Strategy

Currently, Bank ABC XY’s customer relationship management’s maturity is still poor (in the red zone). The solution will be applying an effective customer relationship management strategy to improve Bank ABC XY’s customer relationship management’s maturity from poor (red zone) to excellent (green zone). The strategy is consisted of five main steps:

A. Designing the customer relationship management process

B. Transforming the designed customer relationship management process into CRM SAP

C. Preparing for the implementation of the CRM SAP

D. Launching the implementation of the CRM SAP (Go-Live)

E. Supporting the implementation of the CRM SAP (Post Go-Live Support)

The strategy must also include how to maximize the utilization of the existing system for an efficient result. Customer relationship management aims to retain and gain more customers without increasing cost, and the strategy should produce that outcome also. Studies show that retaining customers is lesser cost than attracting new ones. It is better to focus on keeping current customers satisfied first because in the long run, when customer loyalty is built, they could help the company attract new customers via word-of-mouth. The proposed customer relationship management strategy will absolutely help Bank ABC XY retaining its current 3.3 million customers and it will even help attracting new customers via word-of mouth.

The Change Management Framework

Figure 2: Ross Dawson Transformational Customer Relationship Management Methods Framework

The Customer Relationship Management Strategy (The 5 Main Steps)

(In this case, writer will act as the leader for Accenture Customer Relationship Management Team)

The 5 main steps of customer relationship management strategy is created based on Ross Dawson Transformational Customer Relationship Management Methods Framework. The simplification of Ross Dawson Framework is shown in figure 3.

Figure 3: The simplification of Ross Dawson Framework

The customer relationship management strategy is classified into five main steps, those are:

1. DESIGNING THE CUSTOMER RELATIONSHIP MANAGEMENT PROCESS

The first phase is about designing the customer relationship management process. Leader will lead a group of business consultants to design the process. Bank ABC XY’s customer relationship management process will be designed based on the results from the requirements analysis which includes the aspect of: maintaining customer base & its potential value, evaluating current service operations, segmenting & analyzing customer base, and devising customer contact blueprint. The process design will also involve every business and organizational aspects which are related to the customer relationship management process. Since the process is required to maintain the customer base and the value of the customer relationship, the process must protect the customer loyalty.

Figure 4: Customer loyalty protection methods framework

In order to protect the customer loyalty, the process design should also consider the customer loyalty protection methods framework shown in figure 4. Finally, the most important point is that the process must be based on Bank ABC XY’s value and it must be able to achieve the highest customer relationship value with the lowest possible cost of service. This customer relationship process design is the most critical and determining phase in the customer relationship management strategy, thus it should be carefully designed. Milestones and budget management will be set to keep the project on the track.

2. TRANSFORM THE DESIGNED CUSTOMER RELATIONSHIP MANAGEMENT PROCESS INTO SAP

As the next step, leader will lead a group of system integration and technology consultants to transform the process which has been designed into a CRM SAP. Leader will divide the group of system integration and technology consultants into two group. The first group will be assigned to handle the functional design and the second group will be assigned to handle the technical design. The system integration and technology group will be responsible to transform the process into a correct and reliable CRM SAP. Milestones and budget management will be regulated to keep the project on the track.

3. PREPARING FOR THE IMPLEMENTATION OF THE SAP

After the correct CRM SAP is produced, the leader will assigned a group to create user manuals for using the CRM SAP. The user manual will be the guidance for Bank ABC XY’s employees who have not been accustomed to use the CRM SAP. Instead of providing user manual, the leader will also provide training about how to use the CRM SAP to Bank ABC XY employees. Training will be given continuously until all of Bank ABC XY’s employees understand well about how to use the CRM SAP. In the end of each training session, there will be an evaluation about the materials taught. The score of the evaluation will be used to determine whether the employees have understood the materials or not.

4. LAUNCHING THE IMPLEMENTATION OF THE SAP (GO-LIVE)

When the correct and reliable CRM SAP has been produced and all of Bank ABC XY’s employees have understood about how to use it, the implementation of the SAP can be launched, which is also known as Go-Live.

5. SUPPORTING THE IMPLEMENTATION OF THE SAP (POST GO-LIVE SUPPORT)

After the CRM SAP has been implemented (which is known as Post Go-Live), leader will assigned some consultants to monitor and support the implementation of the CRM SAP for several months, depending on the needs. These consultants will be responsible for ensuring that the CRM SAP implementation running well and help solving problems if there are problems with the CRM SAP implementation. Besides that, they are also responsible to help Bank ABC XY’s employees being accustomed to use the CRM SAP. The leader will also try to counter resistance and fear from Bank ABC XY’s employees about the use of CRM SAP by assigning the consultants to provide counseling to Bank ABC XY’s employees if needed.

References

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