Desde la perspectiva sistémica para que es bueno el BSC

2.3.2

Before discussing CRM further, it is important to point out that CRM means different things to different people (Peng, 2005). The definitions and also the works of various authors conceptualize CRM as either a business philosophy or a software product. The former views considers CRM as a firm’s continuous process of learning about a customer with each interaction whereas the latter thought defines CRM as a database product that collects necessary and timely data about customer with a purpose to use it for business decisions within an organisation (Gordon, 1998; Reichheld, 1996; Payne, 1997; Gamble et al, 2000; Cross et al, 1996).

Given the two schools of thought, it is imperative that a search through literature to find a working definition of CRM be undertaken. Literature shows varied definitions of CRM which are discussed briefly below:

“CRM is a process by which a seller or a service provider manages customer expectations to ensure a long-term relationship and ongoing

alignment with dynamic customer needs.” (Kholi et al., 2001)

While this definition acknowledges CRM as a process that is of long term importance and places the customer at the centre of it, it does not take into account the fact that systems may need to be deployed for this to happen efficiently. The resources for managing customer expectations are not defined neither is the long term aim of doing this clear.

Another author, Dyche, 2002, defines CRM as:

“The infrastructure that enables the delineation of, and increase in customer value and in the correct means to motivate valuable customers

to remain loyal – indeed, buy again”

Dyche’s (2002) definition over-emphasises the importance of infrastructure to ensure increased customer value and loyalty but under plays the customer’s role as the primary source of defining the customer needs. This is an inward focused view of CRM which may

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result in a highly efficient organisation that does not provide what the customers really needs. Couldwell (1998) whose definition is quoted below, on the other hand losses focus of the end game of CRM; that is to make profits and increase customer value in a sustainable manner.

“Customer Relationship Management is a combination of business process and technology that seeks to understand a company’s customers from the perspective of who they are, what they do, and what they’re like”

(Couldwell, 1998).

Given the gaps observed in the definitions of CRM above, for purposes of this research, a combination of the definitions discussed above together with others were adopted in order to appreciate CRM more holistically. Therefore, CRM is defined as a strategy for managing an organisation’s interaction with customers, clients and sales prospects using technology to organise, automate and synchronise business processes. It enhances an organisation’s ability to retain, attract, find and win new customers. This is done while reducing the cost of marketing and servicing them (Bose et al, 2003 ; Couldwell, 1998, Dyche 2002, Kohli et al, 2001, Anderson et al, 2002; Bennani et al, 2007; Corner et al, 2002; Sahaf et al, 2011). The definition implies that there is need to have a solid understanding of the needs of customers as an essential step in determining what needs to be done to improve customer experience. This study advocates for such an approach as it sought to find what happens when employees share their knowledge about customers with a view to improving the customer relationships and service to them. According to the co-founders of Find Invest Grow; King and Hanington (2013), satisfying customer needs is particularly challenging for banks and they advocate that banks should:

• Stick to what you know – banks should stick to what they do best – banking.

A functional, flawless, fault-free account coupled with banking expertise will improve the customer experience

• Get personal – people bring a touch to a relationship that computers cannot

necessarily do. The fact that banks are increasingly interacting with customers through the computer is destroying the ability of the bank to truly assess risk and customers actually find this to be very inflexible and impersonal. An example of this is the SBM SME Quick loans product that was launched at SBM in 2011 and whose parameter allowed for loans to be granted based on a computer calculated credit score. The product seemed successful at first as it grew to K1bn within under six months of launching but

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the non-performing book quickly grew as well to in excess of 40% within under a year of launching. This was because there was no mechanism of verifying the customers who took the tests nor the facts that they provided into the model. The product was suspended as a result and may be replaced with one that has more intuitive decision making (that includes verification) built into it.

• See the bigger picture – banks have been criticized for not listening to other

stakeholders such as investors, third party experts and customers when assessing finance options. Bankers should learn to speak to suppliers, economists and accountants because businesses exist within an identifiable ecosystem and banks should engage this ecosystem as well (Hanington et al, 2013). This proposal is aligned to the thinking around sharing knowledge about the customer in order to improve the customer relationship.

• Be proactive – banks should proactively manage the financial world of their

customers. For example, when a customer is about to overdraw their account, the banker should call them and either propose a credit line or encourage them to fund their account before the account is in unauthorised overdraft. Small payments and paperwork should also be followed up by the bankers and while this may come at an extra cost, it is a cost that businesses should be willing to pay (Hanington et al, 2013).

Hanington et al (2013) argues that business owners are willing to pay for banking services that are tailor made, flexible, instant and a banker who is knowledgeable and caring about each and every customer that is on their portfolio. In an economic environment that offers opportunity for startups, getting good old fashioned banking basics right will greatly impact on customer experience and improve the chances of building revenue. This argument strengthens the need for better CRM to be deployed in banks in view of the current profitability challenges.

The views of Hannington et al, (2013) are aligned to those of Peppers et al, 1999 who state that when an organisation is looking to implement a CRM initiative, there are four basic steps that need to be followed. These are: identify, differentiate, interact and customise.

Identifying the customers

In order to have a relationship, one needs to know the person they intend to have a relationship with first (Peppers et al, 1999). In the same way that Deutsche Bank, ANZ and

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BNY Mellon in Asia Pacific are very clear about their targeted customer segments, it has been proven that clearly identifying your customers and building products and capabilities for them is a key deliverable to driving profitability (Peyper, 2016). This, at SBM is achieved through the KYC process which enables the bank to fulfil not only the compliance requirements but also gathers critical information about birthdays, employment details, income bracket among others. SBM has also defined its customers in the personal markets as salaried individuals and therefore all systems, capabilities and strategies are built around salaried individuals. The process of identifying these individuals through the KYC process enables SBM to identify the various individuals that compose the client base. Similarly, clear definitions have been made in the business banking segment by dividing the customers into commercial as well as small and medium enterprises.

Sometimes in trying to compete in the market, a bank may realise the need to redefine its customer segment simply because it is finding too much competition or limited opportunity in its initially developed strategy. An example of this is the China Minsheng Bank which was formed in 1996 with the initial aim of serving the micro- and small enterprises (MSE). The bank started off serving the private small and medium (SME) segment comprising mainly high tech enterprises. Following a few failed strategies, this bank transformed its management framework, organisation and business structure as well as its IT platforms to cater for MSEs and high-end retail customers in 2009. By 2013, the Bank was serving 1.26 million MSE customers compared to 7,000 big enterprises prior to the transformation. It also has 20 million retail customers with savings deposits making up 23% of their total deposits and non-interest income only accounting for 25% of its total revenue. The bank realises that MSE loans are small, frequent and short term and need to be managed differently and they do this through sub-branches and a credit factory has been built to keep costs down. The bank went on to do another transformation to re-examine at its risk management and cost control capabilities (Ping, 2013). This is a clear example of how chosen markets determine the rest of the business operation in terms of the calibre of people employed, the systems and processes used as well as the overall business model.

SBM PBB redefined its focus in the business banking business unit to pay more attention and grow business within the commercial banking segment rather than the SME segment following the losses it witnessed in 2012/13 as well as the cost of managing such a risky business segment which mainly goes towards the collections and origination capabilities. Once the customer needs are established, a memorable positive customer experience and in line with the working definition of this research can now be put in place and this requires that CRM systems and processes be applied. There are a host of CRM systems that can be

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employed in order to support the management of the entire customer experience as well as all the components that drive revenue growth (Dickie, 2006).

Differentiating the customers

Not all customers are the same and, therefore, an organisation would find it a challenge to satisfy customers using generic products and services (Peppers et al, 1999). It is this realisation that motivated SBM to differentiate its customers into different segments. How well this differentiation meets the customer’s expectations may in turn drive customer behaviour to spend more with that organisation and therefore drive profitability. The current reality at SBM is that while the realisation and differentiation criteria exists, it is not applied fully in such a manner that truly serves the customer and encourages increased purchase and thereby profitability (Genesis Analytics, 2012). An opportunity for this study to resolve this problem at SBM exists since the employees in the bank know about the customers and can use this to differentiate them and serve them better. Currently the situation is known but has not been resolved and it relates to the second objective of the study where the current CRM and KM practices at SBM are reviewed against theory.

Interacting with the customers

Once the customers have been identified and differentiated, it is important to interact with them in a manner that displays full knowledge of the customer. Customers are delighted when they are identified by name, told about products and services that are relevant to their business or life cycle and acknowledged for what they are worth to the organisation (Frei et al, 1998; Peppers et al, 1999). At SBM customers are organised into portfolios to enable this interaction to happen in a meaningful manner.

Customising the offerings to suit the customers’ needs

Organising customers in a differentiated manner such as in portfolios; enables the customisation of customer offering. While customers can be in the same segment each customer’s needs are different and some customers require more of a given service than the other. The process of identifying customer needs and matching these with their requirements is critical in CRM and while mass customisation can be achieved for lower segments, as customers’ needs get more complex, mass customisation becomes even more challenging. This is the reason why the Relationship Managers in the upper segments of PBB have fewer customers to manage than the lower segments.

Having established the importance and need for CRM within banking as a way of ensuring increased profitability and in assessing the steps of establishing CRM as outlined in the foregoing, SBM has the foundations of CRM and yet still falls short of being the market leader. This shows that while the steps highlighted above are important, there is need to do

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more than just the steps. There is need for the employees to understand the customer’s needs, share what they know about the customer and use it to enhance the customer offering as well as the relationship. There is, therefore, a need to understand how the concepts presented above can be made operational since CRM, as stated earlier is not a simple concept to implement not only because of the various stages one needs to follow in implementing it, but also because the concept itself can be implemented with varying levels of complexity. Buttle (2004), argued that CRM can operate at three levels in an organisation – strategic, operational and analytical. This approach is shared by Sahaf et al (2011), who also argue that CRM operates at operational, analytical and collaborative levels. The discussion below examines the levels of CRM.

Table 1, below shows the customer value propositions across PBB; clearly stating the products, channels and pricing strategies for each segment. The various offerings enable the bank to realise the most value from each customer segment.