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Managing
customer relations The use of customer relationship management (CRM) is still relatively new in the pensions industry. However, a recent survey by Datamoniter showed that as life offices seek to manage their existing customer bases more effectively, CRM would be crucial in both ensuring higher levels of customer service and improved customer information use. It also claimed that the cost of introducing an effective CRM system may prove prohibitive to all but the financially strongest companies, who will consequently gain a competitive advantage over their rivals. A system that can integrate the front end with the back office infrastructure could be highly advantageous in the pensions industry, as a company would be able to keep track of the business that a customer holds with them and gain a good picture of the services that the customer requires. So could pensions people have been put off by the number of failures that CRM has seen in other industries? According to technology research and advisory firm Gartner, reasons why CRM fails include ignored data, little attention paid to skill sets, or no proper plan in being put in place. The company asserts that data should be in the right place at the right time and that companies must have a detailed understanding of the quality of their data. They add that many companies undertake CRM with no idea of what they are hoping to build in the long-term. A recent survey conducted by customer value solution provider, Xchange, suggests that companies must become more focused on customer value through organisational culture and process change if they are to increase market share and gain a higher return on investment. The survey shows that 74 per cent of CRM professionals state culture change as a major barrier to customer value management, while 13 per cent blame senior management, and 13 per cent blame lack of appropriate technical skills. It also reports that although companies are not reaping the expected return yet, they are not moving forward in their CRM strategies to gain that return. Over half of the respondents said that their CRM strategy was exactly the same as it was 12 months ago. Is it any wonder then that the pensions industry has not been very forthright in implementing CRM with gusto? Tony Ayres, sales and marketing director at Marlborough Stirling, says that the two aspects central to effective CRM are philosophy and technology. “You can’t have one without the other. They are relevant to anywhere you are looking to provide a service to customers, and pensions is a complex area. You would need to be able to service a customer much more effectively, especially where investments and fund switching are involved.” Though many believe that CRM doesn’t work, there are those that believe that it would work if only it was used correctly. Gerry Budd, director of strategy of Rossbank companies is trying to use CRM as a means of increasing sales. He says: “Good CRM is about building a brand awareness and presenting the right product and services through the channel of choice at the right time. Sometimes companies spend money on CRM that is really a sales campaign, and consequently doesn’t work very well and then form the opinion that CRM doesn’t work. Some implementations just do not work that well if they are driven by sales philosophy.” Instead, Budd asserts that the right way to use CRM is to start from the customer, understanding them more, presenting things to them. “CRM is a state of mind in the organisation and the people that are using these systems,” he adds. Brian Pettinger, commercial director at CRM specialists Lexicon, says that though the pensions industry is in the very early stages of implementing CRM, the market is an attractive one. “There is a growing issue around communication in the pensions industry. Problems with Equitable Life, for example, have meant that consumers want more communication with their provider. Also, there has been a significant uptake in internet access for retirees, therefore they are getting a lot of e-com connections and people are targeting them to sell them other products. The pensions market would take a far more professional line than perhaps other marketeers would.” Implementing CRM is a key issue and might be a deciding factor. Ayres believes that success depends on the way that it is implemented, and the existing legacy systems. “If you engineer your back office systems directly, you then build on the additional capability you need onto that back office system, to provide the front office capability. You have then inherently got all of the logic and data available to you in a native form.” He explains that modern online back office systems that can work in collaboration with other systems interactively would be best for CRM implementation. “Trying to build CRM on anything that’s on a batch based mainframe system is going to be expensive, and also fundamentally flawed.” He adds, an integrated system like this means that if the customer were to check their funds on the internet soon after, they would see that the transaction had happened. “The more you can make those transactions available in a usable way in the front office, the fewer things you have to do in the back office. It’s good customer service, but it’s also cost efficient as you’re not double-handling data.” Pettinger points out that outsourcing CRM is a solution, due to sheer volume. ”I don’t think you can expect pension providers and corporations to take company resources to implement a whole new CRM system, because of the number of mailings. So, outsourcing is an answer to that.” Aon Consulting, one of Lexicon’s clients, uses facilities such as match-mailing, which contain personalised benefits statements and life certificates. Data is received directly from Aon and validated by Lexicon’s data processing software. Checks are run to ensure that all transactions balance before payslips are generated, to ensure that no incorrect payslips are mailed. The
increased efficiency that this brings will attract many in the pensions
industry, considering the one per cent cap that is currently squeezing
margins, though a general culture towards a more client orientated
working style will be required first. Ayres advises to look at building
CRM from the inside out, and at the bigger picture. “What a lot
of the pension providers will be looking to do is to have a more
holistic view, where CRM is just one of the things that they are
looking at.”
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