CRM AND MARKETING STRATEGY IN
FINANCIAL SERVICES
Ing. Kateřina Matušínská, Ph.D.
MARKETING OF FINANCIAL SERVICES/NAMAF
OUTLINE OF THE LECTURE
1. CRM
1.1 Systems of CRM
1.2 Churn Management
2. Strategy defining, marketing planning  Strategic marketing
course!!!
2.1 Strategic management process
2.2 Strategic marketing process
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
1. CRM IN FINANCIAL SERVICES
• CRM = customer relationship management.
• CRM is interaction (one-to-one marketing) with a customer.
• CRM is the active management of relationships with individual
customers at all points of contact, with a view to creating a
mutually beneficial relationship.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
CRM IN FINANCIAL SERVICES
• Customer Relationship Management is a strategy that
focuses on building and supporting long-term customer
relationships. It's not just about technology. It is change in
the philosophy of the company when the emphasis is
given to the customer.
• There are very important good relations with clients in the area
of financial services. Therefore, there should be considerable
difference between the financial institution with CRM system
and a financial institution without a quality CRM system.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
CUSTOMERS MARKETS
Transactional marketing Relationships marketing
Focusing on one-off sale. Focusing on customer retention.
Focusing on product features. Focusing on product benefits.
Short-term. Long-term.
Little emphasis on customer service. Crucial emphasis on customer service.
Limited liability to the customer. High liability to the customer.
Economical contact with customer. Intensive contact with customer.
Quality is primarily a matter of production. All departments of company are
interested in product quality.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKEING STRATEGY AND CRM IN FINANCIAL SERVICES
ADVANTAGES OF CRM IN FINANCIAL SERVICES
• A satisfied customer does not plan to change the product provider.
• Product development can be defined according to the actual needs
of customers.
• Rapid increase in the quality of products and services.
• Ability to sell more products.
• Optimizing the cost regarding communicating with customers.
• The right choice of marketing tools (communication).
• Smooth running of business processes.
• A larger number of individual contacts with customers.
• More time for the customer.
• Differentiation from competitors.
• Strengthening the image.
• Access to information in real time.
• Reliable and fast predictions.
• Increase in staff motivation.
• ...
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
1.1 SYSTEMS OF CRM IN FINANCIAL SERVICES
• Analytical CRM
The work of analytical CRM is customer data analysis, its evaluation, modelling and prediction of customer
behavior. In real life situation the analytical CRM can for example gather all the data about customers inquiring a
specific product by using data mining (tool for data gathering), what services they purchased right away and what
services they purchased eventually. It can find patterns in their behavior and propose next steps during up-selling or
cross-selling. It can evaluate efficiency of a marketing campaign, propose prices or even develop and propose new
products. This way it serves as some sort of help during decision making, e.g. manuals for employees working
in services concerned with how to react to certain customer`s behavior.
• Operative CRM
It mainly supports the actual contact with customers conducted by front office workers and general
automation of business processes including sales of products, services and marketing. All communication with
the customer is tracked and stored in the database and if necessary it is effectively provided to users (workers). The
advantage of this approach being the possibility to communicate with various employees using various channels but
creating the feeling that customer is being taken care of by just one person. It can also minimize the time that the
worker has to spend typing the information and administrating (the data is shared). This allows the company to
increase the efficiency of their employees work and they are then able to serve more customers.
• Collaborative CRM
All departments in a company gather data about their customers. It is not uncommon that these departments compete
or are even hostile to each other. That undermines efforts of CRM to share relevant data throughout the whole
company (e.g. information from help line can help the marketing department choose a point on which it will focus
during the next campaign). The goal of collaborative CRM then is maximum sharing of relevant information
acquired by all departments with the focus on increasing the quality of services provided to customers. The
ultimate outcome of this process should be an increase in customer`s utility and his loyalty.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
1.1 SYSTEMS OF CRM IN FINANCIAL SERVICES
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
1.2 CHURN MANAGMENT
• Churn management identifies valuable customers in
company who are likely to churn and executes proactive as
well as reactive actions to prevent them from churning.
• Reactive retention programs = dissatisfied customer wants to
change the financial service provider.
• Proactive retention programs = prevention, identifying
vulnerable customers in a timely manner and reversing their
dissatisfaction.
• Analysis of customers behaviour who in the past have switched
to a competitor can help to reveal the patterns how to fight
against this situation an how to implement effective retention
programs properly.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
CHURN MANAGMENT
• Methods of data mining can identify the customers in terms of
their leaving and determine the causes of their behaviour.
• Data mining is defined as „non-trivial process of identifying valid,
unknown (hidden), potentially useful and easily understandable
dependencies in the data.“ In most cases, in a large volume of
data.
• Data mining methods are based on statistics, new knowledge of
artificial intelligence and machine learning. Since the late 90s
these methods have been put in practice in many cases.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
PRINCIPLES OF CHURN MANAGMENT
• To know own customers and know who of them left and
who stayed.
• Be able to collect and analyze historical data about these
customers.
• To be able to determine typical loyal and disloyal
(endangered) customers.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
HISTORY TODAY
To produce everything within company. To buy products – services from external suppliers.
To improve by own sources. To improve thanks to benchmarking.
To act on our own. To cooperate.
To cooperate with functional departments. To manage company processes thanks to
multidisciplinary teams.
To focus on domestic market. To focus on domestic and on international market.
To concentrate on products. To concentrate on market and customers.
To produce and offer standard products. To produce tailor made products.
To realize mass marketing. To realize targeted marketing.
To find sustainable competitive advantage. To find new competitive advantage again and again.
To develop new products slowly and carefully. To develop new products quickly.
To cooperate with many suppliers. To cooperate only with a few suppliers.
To manage from top positions. To manage from bottom, top and across.
To be active in the market. To be active also in the area of surrounding
environment.
2. MARKETING STRATEGY AND PLANNING
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING STRATEGY AND PLANNING
• Strategy: the way (procedure) how to achieve defined goals!
• Strategic marketing planning: systematic and rational
enforcement of market and corporate tasks, derived from the
basic business and marketing goals. It is an essential part of
corporate planning.
• Strategic management process  Strategic marketing
processs
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
• Vision: a set of specific ideals and priorities of the company, a
picture of its successful future, based on fundamental values
or philosophy with which the goals and objectives are
associated .
• Vision gives an answer to the question of how the business
will look like in the future. The vision should correspond with
the real situation, abilities and possibilities of the company.
„We want to bring to our clients and partners simple, fast,
fair and professional solutions in the field of insurance and
investments in a manner that always exceed their
expectations.“
(Insurance company)
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
• Mission: explanation of the meaning, the purpose of a business, a
statement of what the company wishes to achieve.
• Sense of existence of the company.
• Relation to other market subjects.
• Standards of behaviour in all company.
• A long time accepted values of the company.
• Correctly formulated mission must answer these questions:
• Who are our customers?
• What customer´s needs do we satisfy?
• Where do we operate?
• What is the philosophy of company?
• What are the strengths of the company and the competitive
advantage?
• Which products does company satisfy customers´ needs with?
"As a responsible market leader, we help our clients in the key
moments of life, to ensure a better future."
(Insurance company)
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
MORTRAGE BANK - vision:
We want to be a profitable, modern and specialized bank with
a distinguished name offering a wide range of mortgage
products, especially in financing residential real estate.
Thanks to our professional services and helpful approach to
clients we will continue to set the tone in mortgage
banking.
MORTRAGE BANK - mission:
We help our clients to live.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
VISION – WHERE ARE WE
GOING?
THE PICTURE OF FUTURE.
MISSION – WHY DO WE EXIST?
REASON FOR EXISTENCE.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
• Objectives (SMART): specific desired state which will be fulfilled
in certain time.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
• Objectives (SMART): specific desired state which will be
fulfilled in certain time.
• market share
• growth in revenues and profits
• cost reduction
• ROI
• strengths in relation to competitors
• technological capabilities
• recognition as the leading financial institution
• reputation
• size and diversification
• stability during economic cycles
• ability to compete in international markets
• financially strong position
• social responsibility
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.1 STRATEGIC MANAGEMENT PROCESS
• Identification of opportunities of the company: they
represent the finding of the right balance between the
opportunities coming from the external environment and the
company capabilities and resources on the other hand.
• Offer something of what is shortage in the market.
• Offer an existing product or service to a new segments or in
better way.
• Offer new product or service - to find a market niche.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
2.2 STRATEGIC MARKETING PROCESS
1. Planning phase
• Marketing situation analysis.
• Marketing objectives setting and strategy formulation.
• The marketing plan.
2. Implementation phase
• The actual implementation of a marketing plan.
3. Feedback phase
• Comparing the results obtained with the marketing plan.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING SITUATION ANALYSIS
• „5C“: company, collaborators, customers, competitors,
climate/context
• Analysis of macro-environment: STEP analysis
• Analysis of the external microenvironment: Porter´s 5competitive
forces model
• Analysis of internal microenvironment: material, financial and
human resources
• SWOT analysis: comparing, evaluating of reciprocal links!
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING SITUATION ANALYSIS
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING OBJECTIVES
• Marketing objectives:
• What should company achieve in the target
market?
• How to get there?
• What impression can company create?
• Crucial market objectives:
• Market position of the company.
• Customer relationship management (CRM).
• Identity and image of the company.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING STRATEGY
Marketing objectives Marketing strategy
What?
Who?
Why?
How? Marketing mix
„7P“
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING STRATEGY
Based on market trends Growing, maintenance, retreating
Based on the approach to market
segments
Offensive, defensive
Based on the behaviour to the
external environment
Cooperative, conflicting
Based on specific customer
groups
Mass market, large segments,
neighboring segments, multi
segments, small segments, market
niches, adjustment to customer
needs
Based on the market life cycle Entry into new markets, growing
markets, mature markets and
declining markets
Based on the position of
enterprise in the market
Market leader, market challenger,
market follower, serving to market
niches
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING PLAN
• Marketing plan - a written document showing the results of
marketing planning and showing where the company wants to
be at a certain time in the future and providing information
what resources will be needed.
• Part of the implementation programs (subtasks and their
conditions of performance for each department within the
company) + budget.
• Planning process takes 6-9 months in a typical bank!
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING PLAN VERSUS REALITY
• Comparing and evaluating of the actual performance with the
expected.
• Analysis and determination of the causes of deviations from
the plan.
• Establishment of actions to eliminate deviations.
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES
MARKETING AUDIT
• It is used for planning and monitoring purposes.
• Comprehensive, systematic, periodic and independent
assessment of the business situation in a particular
environment.
• Marketing environment, objectives, strategies, systems,
functions and performance ...
CRM AND MARKETING STRATEGY IN FINANCIAL SERVICES