Communicating with One Voice - The Voice of the Customer

Communicating With One Voice ...The Voice of the Customer

ISSUES PAPER

Understanding Customers

Leveraging Technology

Customer Communications

Operational Efficiency

Distribution Productivity

Organizational Flexibility

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Improved Profitability

Communicating Consistently Across Multiple Channels

By Jay McKeever

A respected and versatile business professional, Jay McKeever’s vast careerexperience encompasses a variety of industry genres, including positions incommunications, human resources, operations, contracting and marketing.

Before joining Cincom, Mr. McKeever spent 17 years at the United Parcel Service(UPS) rising quickly to the position of operational supervisor where he successfullyimproved operations results from 65 percent to 110 percent within the first six months!He then served as a UPS Human Resources Division representative and eventuallyled district customer communications for five years. It was during this time that Mr. McKeever began developing his approach to customer-centric communications.

After UPS, Mr. McKeever joined Mortgage Now, a Cincinnati-based, mortgage-lendingfirm. During his time with the organization, he developed and executed inventivemarketing strategies to successfully overhaul an underperforming market territory.

In 1996, Mr. McKeever joined Cincom Systems, Inc. as a business manager responsiblefor product royalty payments and reporting to third-party vendors. In addition, inhis role as Cincom’s Director of Worldwide Marketing since 1999, McKeever currentlymanages all marketing, customer communications and product developmentoperations. At Cincom, Mr. McKeever strives to deliver a consistent value propositionto customers via a wide range of communications media, in particular electronicand telemarketing media. He uses Cincom’s own software products to improvecommunications quality, response time and return on investment.

When it comes to executing effective customer communications strategies, Mr. McKeever has this to say: “Today we are seeing the need for an old-fashioned,yet avant-garde approach to customer relationship management – getting to knowyour customers, talking to them, listening to them. But a lack of real-time dialogueprevents marketers from responding to customer queries with the appropriate productor solution. Consequently, marketing becomes all about pushing messages into a void where two percent response rates are considered successful! And unfortunately, all but a few companies fail to communicate with relevance and within anacceptable time frame. Only through personalization and real-time dialogue canfinancial services providers align their products, pricing and promotions to meetcustomer needs and demands.”

Communicating With One Voice ... The Voice of the Customer 2

About The Author


Our Background

Founded in 1968, Cincom started with a simple idea and blossomed into amultinational enterprise. That simple idea was selling software separately fromhardware, an idea that revolutionized how computers and their components weresold. Since our inception, we have provided software solutions that help our clientscreate, manage and grow customers. Our software products include manufacturingcontrol systems, databases, document management, sales knowledge systems and e-Business solutions.

Cincom has provided mission-critical software to over 1,000 firms in the banking,insurance, security and allied services industries. To help them succeed, we’veconducted a comprehensive analysis of the issues currently plaguing financialservices organizations. During our study, we examined scores of analyst briefings andresearch documents to identify the foremost customer problems affecting financialservices providers, as well as possible solutions to those issues. To increase ourknowledge, we’ve interviewed over 40 financial services organizations and havelearned a lot from our own customers, that include:

American Bankers American Community Mutual InsuranceAmerUS Life Insurance Company Atlantic Mutual Insurance CompanyAurora Healthcare Blue Cross Blue Shield of South Carolina Cap Gemini Ernst & Young CitibankDun & Bradstreet Fannie MaeFederal Reserve Board Great American Insurance CompanyHighmark Ing (U.S.) Financial Holdings Corp.Kaiser Permanente MetLifeMorgan Stanley & Company Nationwide Northwestern Mutual Financial Network Prudential FinancialSallie Mae

The information presented in this paper is based on proprietary research conductedin the United States, the United Kingdom, Germany, Spain, France and Italy. In addition to the information gathered from research and interviews, we’ve alsoincluded information from current news articles, the expertise of Cincom staff, consultantsand business partners, including BearingPoint, Doculabs and Fujitsu Consulting.

The experiences of our own financial services customers have taught us that successcan be achieved by implementing technology appropriately and effectively. We hopeour knowledge and insights assist you in implementing sound business strategies thatenable you to maximize the potential of your organization.


1 Terry Vavra,Ph.D., Don’t LetCustomers ShortCircuit YourRetention Efforts,CustomerRelationshipManagement,March 1996, pp33-35

2 BrianMcDonough,Wireless Carriersto TheirCustomers,WirelessNewsFactor, June14, 2001

3 CustomerRelationshipManagementConfronts theFinancial ServicesCrisis, Peppersand RogersGroup and RoperStarch Worldwide,December 2000


Executive Summary

Unfortunately, most customers can tell little difference between you and yourcompetitors. Worse yet, many financial services firms are actually destroyingcustomer satisfaction by delivering communications that are:

1. Self-serving and provider-centric

2. Overstating of actual service delivery

3. Confusing and annoying to customers with complicated, legalistic messages

4. Inconsistently communicated over multiple channels

This was all true of the small mortgage firm I once worked for and it is even truer for the newly merged, disjointed financial services behemoths that servemillions of customers.

One of the most damaging outcomes of these inefficient marketing types is theincreased customer churn that inevitably results. The numbers speak for themselves,as these numbers show:

• The typical U.S. company loses 15 percent to 20 percent of its customer baseeach year and 50 percent within five years; some industries (auto,telecommunications and airline) are losing nearly 50 percent of theircustomers per year.1

• Customer loss and replacement in wireless phone services costs providers $55 million a year.2

• Financial services companies are losing $700 million in profit annually by notbuilding meaningful relationships with customers.3

How did we get into this situation? More importantly, how do we get out of it?

The answer seems simple enough: When we charged down the road to globalexpansion, one-stop shopping and CRM, we lost sight of the basics. To turn itaround, we need to revisit message development approaches from the ground upby doing the following:

• Creating a new sense of relevance with the customer

• Delivering customer-centric messages consistently across all channels

• Bringing technology-enabled communications to marketing, sales and service staff

The good news is that we can get there. This research paper sheds new light on the basics and reveals emerging practices for communicating product-servicedifferentiation, and delivering relevant messages to your customers – across alltouch points.


Table of Contents

Our Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Assessing Today’s Communications – Provider Beware! . . . . . . . . . . . . . . . . . . . . 9

Proliferating Communication Channels . . . . . . . . . . . . . . . . . . . . . . . . . . 10Communicating Without Differentiating . . . . . . . . . . . . . . . . . . . . . . . . . 11

Perfecting Customer Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Shifting to Customer-Focused Business Models . . . . . . . . . . . . . . . . . . . . 13

Improving Customer-Centric Processes . . . . . . . . . . . . . . . . . . . . . . . 13Making the Shift to Customer-Centric Marketing . . . . . . . . . . . . . . . . 14

Delivering Customer-Focused, Contextually Relevant Messages . . . . . . . . 15Creating a Single View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Communicating Clear, Unique Value Propositions . . . . . . . . . . . . . . . . . . 18Improving the Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Providing Consistent Communications . . . . . . . . . . . . . . . . . . . . . . . . . . 19Delivering Consistent Messages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Delivering Value Over Multiple Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Making the Most of Existing Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Improving Data Access and Integration . . . . . . . . . . . . . . . . . . . . . . . . . 24

Improving Data Access and Quality for Better Communications. . . . . 25Data Warehousing in Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . 26

Using the Data You’ve Got. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Reducing Expensive Customer Service Inquiries . . . . . . . . . . . . . . . . . . . 28Integrating Contextual Communications Increases ROI . . . . . . . . . . . . . . 30

Coordinating Electronic and Postal Mail With Outbound Telemarketing. . . . . 30Producing Personalized Documents . . . . . . . . . . . . . . . . . . . . . . . . . 31Automated Customer Correspondence . . . . . . . . . . . . . . . . . . . . . . . 31

Using Electronic Media: Personalization, Permission and Privacy . . . . . . . 33Increasing the Potential to Grow ROI via Personalization . . . . . . . . . 33Selling Complex Products and Services Online . . . . . . . . . . . . . . . . . 33Taking Advantage of E-mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Improving Communications via Automation . . . . . . . . . . . . . . . . . . . . . . 36Automating Marketing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 36Automating Sales Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Wrapping It Up: Discussion Review . . . . . . . . . . . . . . . . . . . . . . . . . 39Parting Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

What’s Next? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43


4 DDB Life Study,2000

5 Insight DrivenMarketing,Accenture, 2003

6 Insight DrivenMarketing,Accenture, 2003

Anyone in marketing knows that it’s becoming increasingly difficult to connect withexisting and prospective customers. Studies show that loyalty to brands has erodedsharply. Adult shoppers across all age groups in the 1970s were highly influencedby brand. Today, even those over 60 years old (the most brand-loyal segment ofconsumers) has dropped by 20 percent in the past 25 years.4

And the return on marketing investments is dropping:

• Enterprise productivity demands closer scrutiny of marketing.

• The time to break even in the mobile phone industry has grown from 6.8 months in 1998 to 7.2 months in 2003.5

• Sixty-eight percent of marketers have difficulty or cannot measure the ROI oftheir marketing campaigns.6

Faced with servicing a more educated, sophisticated clientele, today’s financialservices providers must contend with challenging customer demands. As financialservices offerings become more abundant and less differentiated from those of thecompetition, customer communications become a decisive factor in determiningwhich companies will win the hearts and minds of prospective customers – andwhich will fall by the wayside.

Effective customer communications seems simple enough, but upon closer inspection,it’s readily apparent that today’s financial services providers are delivering messagesthat are fragmented, inconsistent and often downright confusing to the customer.Why? Here are just a few examples of how most companies fall short:

• Value proposition messages – though good on paper – are not delivered as promised.

• Messages are irrelevant to the individual customer’s situation or place in life.

• Call center communications often do not match those delivered at the branchor by web agent.

• Messages delivered on invoice statements or on EOBs (explanations ofbenefits) are legalistic and prompt customers to make calls into the servicecenter for clarification.

• A change-of-address request often necessitates a call to several differentcustomer service centers due to lack of data integration.

It’s commonly understood that good communications are bi-directional in nature.To that end, getting an effective message to the customer is only half the battle –the other half entails effective listening. Financial services providers must ascertainwhat customers are saying and thinking with two-way communications strategiesbased on old-fashioned listening skills. The key to any successful relationship –developing a mutual understanding with your customers – will enable you to servethem in a manner they expect, demand and, most importantly, appreciate.


Assessing Today’s Communications –Provider Beware!


Remembering the relationship adage, “If you love someone, set them free,” providingyour customers with convenience and freedom of choice in when and how theyinteract with your company is key to securing their satisfaction. In this idealpartnership, customers not only understand your message, but they are also able toprovide feedback if your message is somehow inappropriate or lacking. You knowthe goal – to develop the customer relationships you need to stay competitive in theindustry – but to reach it, you must first understand the obstacles that stand in yourway. According to our research, customer communications in the financial servicesindustry have deteriorated (in part) due to the following issues:

Proliferating Communication ChannelsThe traditional “Big Three” communication channels (contact centers, direct mail,in-person contact) have expanded to include e-mail, fax, pagers, internet, VOIP(voice-over internet protocol), consumer events, text messaging, ATMs, kiosks,value-added resellers, distributors and so on. And more contact channels arecoming. Why?

• Explosion in choice and over-saturation of supply in all industry categories.

- Retail outlets in the U.S. have tripled since 1975.

- Discount stores have doubled since 1970.

- Apparel stores are up 50 percent.

- The average supermarket now carries 30,000 items.

- There are 850,000 eatery outlets in the U.S.

- Telecom services are up 60 percent since 1995.

- There are 8,200 mutual funds on the market today.

• Huge jump in number of marketing messages.

- The daily average in 1985 was 6507 and the daily average in 2003 is 3,000.8

- Direct mail went from 35 million in 1980 to 85.6 million in 1999.9

- Telemarketing calls now average 60 a month and some segments get as many as 90 a month.

• More knowledgeable consumers with easy internet access.

• Category leaders like Wal-Mart, UPS and McDonald’s set higher expectations.

According to the Gartner Group, by 2005, 80 percent of financial services products willbe sold through at least 30 different delivery models. This communications channelproliferation will make it necessary for financial services firms to optimize the sales-service experience according to the individual requirements of these many differentchannels. And although the majority of these new channels will be electronic, thevarious channels will be dissimilar enough to prevent providers from being able togroup them all into the same category when developing communications strategies.That said, each channel requires its own management strategies to operatesuccessfully within an overall corporate channel strategy.

The unique needs of the customer are reflected in the channels they use tocommunicate. Unfortunately, most financial services providers have been unable totake advantage of these diversities to better direct their marketing and sales efforts.

7 A New Era ofEros inAdvertising, MarkMuro, The BostonGlobe, 1989

8 Statistical FactBook, DirectMarketingAssociation

9 Statistical FactBook, DirectMarketingAssociation

For example, many financial services providers cannot yet distinguish a marketingmessage geared toward a customer accessing their account from a home computer,from that of a message directed at a customer accessing their account from a mobilephone. True, the message may fundamentally be the same, but the communicationnuances are quite different. In this case, a mobile phone internet connection doesnot lend itself to the lengthy text announcements and graphics that a home PCwould allow. To work successfully, communications must be tailored and managedaccording to the capabilities and limitations of the intended delivery channel.

Communicating Without DifferentiatingToday’s customers may be more demanding of their financial services providers, butthey have a difficult time distinguishing one company’s product-service offering fromthe other’s. To date, the industry has been one with a mass-communications culture,resulting in “lowest common denominator” messages and no differentiation amongproviders. To stand out in the current climate of increased competition and decreaseddifferentiation, financial services providers have to clearly communicate what makestheir offerings special – better than those provided by the competition. If you arepretty secure in the differentiation of your branding message, you should have noproblem completing this sentence: We are unlike any other provider because … .

And please note, the “because” statement must refer to something the consumeractually cares about! Remember, as far as your customers are concerned, “It’s allabout ME!”

While the brand message must differentiate and relate, it must also be delivered atevery touch point with a correspondence and service offer consistent with the claim.It’s not only a matter of the message itself being consistent over the various touchpoints, but more importantly, the value message must be consistent with the servicelevels provided, or the message is deemed untrue. Think of the millions of dollarsspent on communications to deliver a brand position that is destroyed the momentthat service does not match the claim. Some of the more successful institutions arebeginning to connect more readily to customers through ubiquitous marketing, salesand service media. What’s at the heart of their success? Clearly communicating whatsets them apart and making good on that claim.


Messaging Gone WrongProduct-centric communication doesn’t work anymore. No matter how muchflash, bangs and whistles are featured in your product-service lineup, if you don’tcommunicate how your offering will meet the needs of your customers, theysimply will not buy from you. And as confident as you might be in the merits ofyour own offering, you must first ensure that the customer remains the primaryfocus of all communication.

• In a recent survey of 175 executives, Accenture revealed that 70 percent ofthe respondents believe that clutter makes it difficult to capture customerattention.

• Credit card company response rates to direct mail have dropped from 2.8 percent in 1992 to 0.6 percent just four years later.

• In 1980, we could reach 80 percent of a broad target audience with one off-peak television commercial; today it takes 200 commercials to achievethe same reach.


Customer communications will be a decisive factor in determining which companieswill succeed in today’s financial services marketplace. To enhance your ability tobetter serve your customers, you must be able to capture, consolidate, analyze anddistribute information about them at every touch point.


10 Building BetterCustomerRelationships,2002, FujitsuConsulting, pp 4

11Gartner Report,March 2001 asreported inCincom EMEAResearch

12FujitsuConsulting:Building BetterCustomerRelationships,2002, pp 23

Perfecting Customer Communications

Our research has identified four strategies for optimizing yourcustomer messages:

1. Shift to a customer-focused business model.

2. Develop customer-focused, contextually relevant communications.

3. Deliver a clear, unique value proposition.

4. Deliver this message consistently at every channel touch point.

Shifting to Customer-Focused Business ModelsShifting to customer-centric business models is a tough place to start on improvingcommunications because it is a multifaceted, complex issue. I am aware of thedifficulty firsthand because my own company struggles with this transformationevery day. Software companies such as Cincom grew up with a focus on products,just as the financial services industry has done. Product focus is bred intoeverything we do and undoing it is hard work.

Put your consumer hat on for a moment and ask yourself the following: Do youwant to purchase products that a provider believes will make you more productive?Or do you want the provider to understand your situation and work cooperativelywith you to solve your business problems? If you prefer that providers focus on yourneeds instead of how they can shoehorn their products into your infrastructure, thenyou’re well on your way to recognizing the need for customer-centric business models.

Improving Customer-Centric Processes10

Internal Processes – Financial services companies tend to be organized aroundproducts, not customers. To create differentiation through customer relationships, it is necessary to first change how the business is organized and to developcustomer-service processes before embarking on a customer relationshipmanagement (CRM) initiative.11

Companies Failing at Customer Centricity – Thirty-seven percent of companiesstill have a strategic and operational focus on the products and services they sellrather than on the people they sell them to.12

CRM Software Use Is Not Yet Widespread – Only 30 percent of companies haveactually implemented a commercial CRM software package and most of these are onlya year old. Of these companies, 54 percent have implemented just one part of CRM.

Becoming customer-focused must go beyond lip service. We all have to learn totrust our customers to define their needs and to make decisions about what theyneed. Instead of selling, we need to help them buy what they need. This means wemust look at the products we offer, the culture we work in, the processes we use toget things done, and the way our business is organized, even our compensationand motivation systems. It all has to change.

Shifting to a customer-focused business model is outside the scope of this report,but some basics relevant to customer communications include:

Choice and Flexibility – There is no one right way for the customer to contactand interact with their financial services provider. The right way is the way thecustomer wants to interact with the financial services provider at that particularmoment. And that method may change only occasionally, or as much as daily.Regardless of their preferred method of interaction, your communication with thecustomer must be consistent and clear.

Ease-of-Use – All channels of communication must be user-friendly – even for anovice or first-time user. Difficulty in finding information or getting service from the financial services provider is one of the quickest ways to lose a customer.

Quick and Knowledgeable Responses – Customers should be able to locateinformation quickly about products and services. When information can’t belocated, the customer should be automatically directed to a channel that can quicklycomplete the request. But by sending your customer on a merry-go-round chasethrough siloed channels, you will soon chase your customer to another provider.

Assurance – The customer must feel that your word is as good as gold. When avalue promise is made, it must be kept.

Best Value – In the end, customers want to feel they are receiving the best valuefor their money.

Making the Shift to Customer-Centric Marketing 13

The challenge of transforming a product-driven company into a customer-focusedenterprise can be hampered by internal processes, such as operating independentlyfunctioning business lines rather than basing the firm’s organization on theparticular customers or groups of customers being served. To make the change,consider implementing the following processes:

1. Differentiate customers into segments by value and needs.

2. Discover the precise needs of each customer, by segment.

3. Access customer data and distribute it to authorized users.

4. Evaluate and develop products and services that can be customized around segment or individual customer needs.

5. Redesign compensation and rewards to cause needed behavioral changes.


13One-to-One B2B,Peppers andRogers

Delivering Customer-Focused, Contextually Relevant MessagesWhat’s the difference between a product-centric and customer-centric approach tocommunication? In a word: relevance. Whereas product-centric messages promotefeatures and price, customer-centric messages promote a totally personalizedsolution based on individual customer needs. Product-centric communicationexploits the value of a single transaction while customer-centric communicationaddresses the lifetime value of the one-to-one customer relationship.

This begins with content that is about customer pains and issues instead of thewonders of our products. First, show the customer that you understand their needsand their situation, and when you have gained their trust, guide them to see how yourproducts address their unique needs better than the products of your competitors.

It’s no surprise that personally relevant communication is of the utmost importanceto customers. In fact, one recent survey showed that only 26 percent of respondentswould even act upon impersonal, “Dear Customer,” correspondence. That leavesthree-quarters of your customers unsatisfied. So, now is the time to trade in the “WeWe” product-focused communication for the personalized “Me Me” messages thatbuild repeat business. If you are doing this already, CONGRATULATIONS! If not,why not?

When implemented correctly, customer-centric, contextually relevant communicationswill enable you to:

• Build personal relationships that keep customers loyal.

• Strengthen customer satisfaction.

• Communicate customer specifics that reduce future inquiry (and therebyreduce cost of communications).

What Is Context? – Context is the interrelated conditions in which information oractivity exists with other situational events that impact decision-making and the finaloutcome. All consumption occurs within a context. The more you understandcustomer context, the less information customers have to supply to you and thebetter you can serve them. To better understand the concept of context, let’s take a lead from screenplay writer Linda Seger: “Characters don’t exist in a vacuum.They’re a product of their environment. A character from seventeenth-century Franceis different from one from Texas in 1980.”

In the world of financial services, a newly retired father of adult children is quitecontextually different from a 35-year-old father of two school-age children. Further,Linda continues: “Understanding a character begins with understanding the contextthat surrounds the character. What is context? Compare context to an empty coffeecup. It’s the space surrounding the character, which is then filled with the specifics ofthe story and characters. The contexts that most influence the character include theculture, time in history, location and occupation.”

Additionally, context also includes customer interests, behaviors and experiences,etc. – all factors that collectively determine the needs of the customer, as well ashelp providers offer services to best satisfy those needs.


What Is Contextual Content? – Content is a general term that describes articles,photos, illustrations, diagrams, videos, sounds, promotions, animations, navigationallinks, functionality and online tools that appear in the web browser view. Contentsare contextual when they are personalized to be relevant to each individual visitor’ssituation – the visitor’s fine-grained profile of demographics and informationalinterests, location, timing, needs and decision criteria.

What Is Contextual Marketing? – Marketing is contextual when it is maderelevant to each individual customer’s situation while also addressing the needs of the sponsoring enterprise (awareness, positioning, qualification, barrieridentification, trust, closure). Contextual marketing brings customers and sellerstogether so that the customers can make better decisions, faster and easier.

Customized Customer Messages – Customized messages are a highly effectivemeans of connecting with customers, particularly when those communications canbe personalized to address the specific needs of the individual customer.Customizing messages could include useful research or supplemental informationthat benefits the recipient and is relevant to their unique situation. Insurancepolicies, loan documentation and general customer correspondence will all pack abigger punch when customized for the recipient. And even though producing suchone-to-one communications is more resource-intensive (as targeted materials havehigher requirements for accuracy and timeliness), you can exploit customizationstrategies as tangible elements of differentiation. Attention to detail and attention to the customer as an individual – these are often overlooked, but invaluable CRMprinciples for maintaining customer loyalty. Developing this type of customizedcommunication may expose some weaknesses in your current CRM technologysupport, however, data access, knowledge management, document compositionand contact center software products are poised to fill this gap.14

Customers as Individuals – The time for one-to-one communications is at hand,but too many managers have yet to understand how to manage the process. Mostmarketers still treat powerful new CRM technologies as mere segmentation tools.We need to break from the traditional thinking of customer clusters such as babyboomers, or genXers. The new goal is a segment of one – the one individual.

For instance, consider how different the needs of a boomer responsible for caring forelderly parents are from a boomer exiting out of the rat race for more emotionallysatisfying work. Both are boomers, but their needs for financial services are totallydifferent. When you get into a one-on-one conversation with a customer, these arethe things you learn and you know instinctively what to say to each customer.

Now there is a need for technology tools that can pick up on such nuances andprofile customers based on their current needs and interests. Today’s typicalcustomer databases contain identification information, demographic information and transactional information. Most do not yet collect and use soft informationabout customer needs and interests, and it is the latter that leads to a richerconversation and to more relevant financial advice. Technology-enabled customercommunications should make every conversation with a customer increasinglyrelevant to the individual’s life situation – their context.


14Doculabs Report:FunctionalAssessment ofCincom iDSolutions™

As your client-information database grows, you can begin to operate your companyaround the customer, instead of operating around what you want to tell yourcustomer. Soon, your products and services will become what your customer reallyneeds, not merely what you want to sell. If you care about customers, it will show.And if you do not care about them, that will show too. If you are a true “customerfirst” company, the customers will come to know you as trustworthy. Your businesswill grow accordingly.

Delivering True Personalization – The most sophisticated financial-services firms have dedicated countless resources to acquiring complete customer profiles,creating needs-based segments and delivering consistent conversations across the organization. There is one final facet of personalization, however, that manycompanies are still neglecting. To truly personalize a relationship, a financialinstitution must be able to solicit customer preferences and then change the way it does business to satisfy individual consumer needs. For example, if a customerconsistently uses online channels to communicate and transact with his or her bank,mailing a check reorder form to that person ignores the customer’s implied preference.If the bank sends the notice via e-mail and enables the customer to reorder with asimple reply, it may go a long way toward locking in that customer’s loyalty. Thechallenge for most institutions is overcoming a legacy of “that’s the way we’ve alwaysdone it.” True personalization will only become possible to the extent that firms canopen up processes and allow customers to dictate how products are delivered, howservices are configured and, essentially, how they themselves are treated.15

Creating a Single ViewTruly personalized communications are not possible without first priming existingdata-management technologies to allow for full data access and integration.However, once you resolve these outstanding technology limitations, you will beequipped with a “single view” of your customer data and also be able to educateand reward customers for using channels more discriminately.

And to transform your product-centered communication into customer-focusedmessages that grab and keep the attention of your recipient, implement any or all of the following strategies:

• Learn each customer’s needs, wants and expectations

- Use web surveys, scripted conversations and interactive content to solicit responses that reveal important factors about the customer’s needs, interests, economics, etc.

- Use interactive content tracking on your web site and e-newsletters to watch what content each customer selects to read. Use this content selection process to build a profile of customer interests so the organization can make future communications increasingly more relevant to each customer.

- Use a similar process to identify whether the customer has entered an active buying cycle and determine if the customer is in an early or late stage of this cycle to trigger promotional offers that are relevant to the customer’s purchase readiness.


15Peppers andRogers, August 2001

• Access and integrate your data to enable a comprehensive client profile … the elusive 360˚ profile

A major barrier to contextually relevant, personalized communications is the inability for marketing and sales decision-makers to get easy access tocustomer data. This data is usually resident on a variety of mainframecomputers and disparate data systems. The first step toward more effectivemarketing, cross-selling and up-selling is to get this data into the hands ofbusiness managers who can then construct the content scenarios needed formore personally relevant customer communications. Data access and integrationbrings all complex environments and data together. It provides compatibilityand interoperability between vendors’ hardware, software and packagedapplications. Data integration aligns information systems with an enterprise’sbusiness model through a combination of methods, tools and techniquesaimed at modernizing, consolidating, and coordinating varying applications.Such data access is now available and can be up and running in days insteadof the months required for more comprehensive data warehouse solutions.

Once your enterprise data is available and integrated, you can begin toassemble the elusive 360-degree view of your customer that is often promisedyet rarely attained. A 360-degree view would be expected to include thecustomer’s purchase history with your company, a record of all communicationsthey have had with any department, all billing and transactional information,any known channel or product preferences and each individual customer’sresponsiveness to your sales and marketing efforts. With analysis and thecomplete customer view, your firm could present personally relevant informationand offers to your existing customers, thus increasing repeat-customer buying.

• Understand and apply contextual marketing to communications

Corporations are constantly trying to discover their customers’ needs, wantsand expectations, how they buy and what they will pay. Contextualcommunications are about this and much more. It is about the oddities,quirks, biases, emotions and sudden, unexpected, impulsive twists indecisions that constitute human behavior. If the choice is presented the rightway, people will more predictably make a favorable decision. The trick is toenter the context, understand where you are in this context and then controlthe conversation relative to the context. Contextual communications arepredictive. How you communicate is more critical to revenue generation,customer acquisition and customer loyalty than your back-end processes.Back office is important, but unless it also improves communications, it can only save you money … it cannot make you money.

Communicating Clear, Unique Value PropositionsTo deliver an effective value proposition, organizations should start by developingan effective value message differentiated by exceptional customer service. Byimproving customer satisfaction, financial services providers are discovering theycan turn segments previously labeled as under-performers into profitable and loyalcustomers. Start by understanding customers on an individual level and aggregatingthis “true view” into segments. Then serve each segment in an appropriate, relevantmanner. Again, consider that whereas the customer on the home computer has thetime and display space for a more complex marketing message, the customer onthe mobile phone would need a quicker and more concise pitch. To emerge from


industry obscurity, develop your customer communications strategies around yourchannel strategies, making sure each customer receives messages via his preferredchannel. On the mobile phone or in the mailbox – make it your business to knowwhere to reach them.

Improving the Value PropositionInformation-based strategies leverage expert knowledge of the profitability,preferences and transaction histories of individual customers to increase theeffectiveness of marketing, sales and service. To transform your ho-hum, run-of-the-mill value message into an eye-popping, head-turning, “must have” proposition thatpositions you head and shoulders above the competition, we suggest youimplement the following solutions:

• Define what makes your product-service offerings unique and better thanthose of your competitor.

• Improve customer service and market it as a key differentiator.

• Offer value-added services to your most profitable clients.

• Provide highly customized, one-to-one relationships, through a personalizedselling environment.

Providing Consistent Communications Today’s financial services industry must have processes in place to addresscustomer difficulties in the most efficient manner possible. Also imperative is theability to understand customer needs, the ability to anticipate and improve service,and last but not least, the ability to protect customer privacy. Failure to deliver aconsistent message across all touch points has decreased industry providers’ abilityto meet those service requirements. The result has been waning customersatisfaction levels and increased service costs for providers. Sharing customer datathroughout your enterprise is mission-critical for effectively reversing this harmfultrend. Communications through channels must be accurate and contextuallyrelevant to truly assist consumers in their decision-making. Providing consistent


Mini Case Study Number 1

Bank XYZ* has 2,067 branches in the U.K. alone, catering to the needs of onemillion business account holders and seven million personal account holders.With such a massive client base, the bank depends on technology to enable it toprovide consistent levels of customer service.

Goal: Centralize customer information and permit access from thousands ofauthorized worldwide branches.

Challenge: Send out over 24 million personalized letters per year.

Solution: Automating intelligent correspondence enables the bank to create aseamless customer service environment from all their branches worldwide.

Key Results:

• Improved customer service

• Fifty percent time savings in document production

• Centralized access to customer data ensures consistency across all branches* Company names have been changed.

transactions through enterprise-wide information sharing makes it possible for youto deliver exceptional service while protecting your professional image.

Delivering Consistent Messages• Extend business process flow across multiple channels

Once they have the data in a single view, managers can convert theirknowledge into a set of business rules that automate complex processes tomarket, sell and service customers. This enables providers to more effectivelyrespond to each individual’s situation while working within parameters thatensure appropriate profitability. At the heart of this process is automating aknowledge-based system that allows expertise to be distributed consistently,quickly and cost-effectively throughout all contact channels.

Providing continuously updated and accessible information to both direct andindirect salespeople gives you a tremendous competitive advantage.Empowering your sales channels with consistent and accurate information letsyou “stack the deck” and supports your efforts to be professional,knowledgeable and easy to do business with. But in the case of many financialservices providers, the complexity of products combined with multiple saleschannels makes selling and servicing complicated, labor-intensive and costly.

By extending your best sales and service processes across your enterprise,you ensure that customers receive the best response you can offer, no matterhow they contact you. Customers receive what they need and you retain morecustomers while increasing your share of profit. Data from existing systemscan be aggregated and combined with new and updated information to give acomprehensive view for each of your customers. In addition, real-time accessto data across your entire enterprise ensures consistent customer experiencesat every touch point. You can also enhance service quality through automatedchannels by deploying expert knowledge at the point of customer contact –including contact centers and the web – enabling you to deliver higher qualityservice and sell more cost-effectively.

• Equip all customer service reps with the ability to provide consistentcustomer transactions

As today’s customers have more choices and greater expectations of customerservice, ensure your contact center agents possess the knowledge to sell andservice customers intelligently enough to create repeat business. At themoment of interaction, agents should have immediate access to any relevantcustomer information, including profile, history, preferences, associateddocuments and more. Armed with the information, agents will deliver morepersonalized service, smartly selling solutions rather than simply pushingproducts. Customer information should continually accumulate at each pointof contact to create a comprehensive, useful knowledge base.

• Create an integrated customer communications solution

Look for an integrated solution that supports multiple document types andprovides a single solution for a wide variety of applications, ranging fromstatements to ad hoc correspondence to complex regulated documents suchas insurance policies. The strength of the solution should be its ability toproduce complex, personalized documents in a wide range of applicationscenarios – and its ability to deliver those documents through multiple channels.



Such a solution would provide the following business benefits:

- Makes it easier for companies to design the look and feel of their customer documents.

- Provides opportunities for branding within customer documents, as well as opportunities for special promotions or cross-selling offers.

- Enables organizations to automatically incorporate data from outside sources, such as databases, business applications and legacy systems in customer documents.

- Delivers these benefits in both interactive and batch production environments, providing consistent appearance for ad hoc and periodic communications.

- Allows organizations to personalize both the content and composition of customer documents.


Serving nearly two million members, Provider ABC* is using an intranet-basedpersonalized correspondence generation system to manage much of itscommunications. The company generates thousands of letters monthly to itscustomers thanks to a rules-based correspondence system.

Goal: Upgrade or replace an outdated mainframe-based document generator inorder to create dynamic, personalized documents via a web browser fromanywhere in the world.

Challenge: Generating thousands of personalized letters each month from over800 workstations in diverse locations.

Solution: Provider ABC implemented an intranet-based personalized generation system.

Key Results:

• Eliminated the expense and headache of maintaining software on over 800workstations in different locations.

• Saved time and money by eliminating the need for claims processors totype unique information into each letter. Correspondence can now bepersonalized automatically – without typing a single word.

• Greatly improved appearance and consistency of letters.

• Enabled over 1,200 web users to generate customized letters.

* Company names have been changed.

To deliver value on a personalized basis, you need customer data. More specifically,you need customer data put into the hands of those employees who routinelycommunicate with customers. This allows you to analyze the data, segment yourcustomers and improve your communications accordingly. In this section, we willlook closely at two important, but often neglected, communications media:

• Contact center transactions

• Printed documents

Making the Most of Existing Data According to Forrester, online financial customers do business with, on average,more than five providers and have little inclination to consolidate their serviceneeds. Studies in the United States indicate that the typical bank customer has sevenbank accounts and that no more than four are likely to be with one financialinstitution. To become a one-stop-shop for your customers, you’ll have to offer thepersonalized service that enables you to up-sell and cross-sell successfully. But ifyou don’t know your customers, how can you recommend additional products andservices to them? Put simply, you can’t.

A major obstacle to personalization is the inability to acquire essential customer data.In fact, as stated in Forrester’s Personalizing Financial Services report, 68 percent ofthe 50 financial services firms interviewed cited “getting good data” as the biggestchallenge to personalization. Further, in many cases, the information that firms dohave is incomplete because customers’ assets are spread across several institutions.

According to a PRG/Roper Starch study, if a financial services firm can provide a high-level of service and relationship management, 55 percent of respondents said they would likely consolidate their business with one provider. So, sincecomprehensive profile data is integral to personalization, yet difficult to attain, we find ourselves in a bit of a Catch-22.

The advice of many executives? Start with the information you have and thensupplement it with third-party sources. Also, where possible, ask customers todisclose information in the interest of serving them better. The key is to convincecustomers that providing this information will directly benefit them.16


Delivering Value Over Multiple Channels

16 ForresterResearch


Improving Data Access and IntegrationIn today’s depressed spending environment, all IT departments are asked to do morewith existing systems, including existing data. This includes providing service repswith desktop access to existing data for real-time decision-making. Unfortunately,data is housed in disparate subsets and formats and is queried by various databasemanagement systems running on diverse hardware platforms using differentoperating systems. To make matters ever more incongruous, a lot of existing dataresides in legacy systems running on a mainframe, as these statistics show:

• 70% of corporate data resources are hosted on mainframe systems. - Gartner Group

• 80% of corporate data is held in non-relational data sources. - Butler Group

• 40% of all application development effort is spent on accessing existing data. - IDC

The objective of data integration is to bring these disparate environments togetherand have them working in unison. Data integration provides compatibility andinteroperability between multi-vendor hardware, software and packaged applications.Another task of data integration is to align information systems with an enterprise’sbusiness model through a combination of tools and techniques aimed at modernizingand coordinating varying applications. Data integration solutions for relational dataare fairly common, yet a great deal of data continues to be inaccessible – lockedaway in mainframes. With the modern requirements for systems related to e-commerce,integrating all data has become an expensive, yet necessary, undertaking.

Financial services providers not only need the ability to access and integrate the datafrom their collection of data sources, they need to do it as efficiently and cost-effectivelyas possible. With the appropriate data integration solution, providers would be able to:

• Provide a single, up-to-date view of enterprise data so it appears as if it isfrom a single database system.

• Maintain the integrity of their core data systems, minimizing disruption tobusiness and allowing existing systems to be left intact.

• Eliminate the need to create large data warehouse systems and associatedproblems. Problems such as out-of-date data and the difficulty and expense ofcreating and maintaining the system are eliminated.

• Integrate new businesses and systems quickly with no major IT efforts needed.

• Extend data quickly and securely to channels, customers and partners.

Signs You Are Taking Full Advantage of Your Customer Data• You can access and analyze data that can be used to make effective sales

and marketing decisions.

• You can understand individual customer profitability across operatingdivisions.

• You can identify customer needs and find ways to meet those needs.

• You can create products and services that encourage or change customers’buying behavior.

• You can sell more products and services to existing customers.

• You can define customer communications touch points across yourenterprise.


External Data• Industry Trends• Competitive Research• Market Share• Brand Measures

Client Data Sources• Profiles Location Income Decile• Transactions• Interactions

Client-Inferred Data• Topical Interests• Preferred Touch Points• Timing of Touches• Buying-Cycle Stage• Barriers to Purchase

360-DegreeIntegrated View of

Customer

Improving Data Access and Quality for Better CommunicationsThere are four different paths you can take to access data currently “trapped” indisparate data systems:

1. Implement a comprehensive CRM solution that replaces existing systems.While many are pursuing this direction, many are also failing at it and find the disruption to business and the cost of execution prohibitive.

2. Install a data warehouse that replicates existing data from disparatesystems. Many companies are headed in this direction, but setting up awarehouse from pre-relational files requires specialized knowledge andcustom development and a lot of time before the warehouse is functional.

3. Create a portal that can access and input data through a browser. Whilebeing time responsive and friendly to users, this solution puts additionaltransactional load on the existing systems that are typically near capacity.

4. The Cincom TIGER™ Approach that lets you access, integrate, replicateand refresh data across heterogeneous platforms and file systems.This gives you a relational interface to non-relational data, and a fast means ofaccessing mainframe data through SQL queries. The TIGER system includescomponents for data access, data integration, data transformation, a real-timedata cache and analytics, and provides data warehouse functionality withminimal cost and overhead. TIGER installs rapidly and with relative low cost.This makes a good interim solution for companies already embarked on along-term data warehouse implementation, giving business managers the abilityto access and use data while the long-term warehouse is being completed.

This approach accesses transactional data and stores this “single view” ofeach customer in a cache where it can be accessed using any tool thatsupports relational or XML APIs. Unlike the snapshot techniques used in thedata warehouse environment, the system monitors changes to thetransactional data sources and periodically applies them to the cached copy.Data upgrade periods are typically measured in hours, but are set by the userbased on business requirements – including real-time, if needed.

Using The Data You’ve GotCommunications into channels or to customers have not served businesses or thetargeted individuals well. Response rates across all industries, all media and allcommunications disciplines are poor: response rates universally hover in the twopercent range. At the same time, recipients tend to see most communications as notrelevant to their needs. Lack of relevance is a major reason for poor response rates.

Two interrelated strategies can help you attain productivity gains:

1. Customer centricity and

2. Contextual communications

By shifting the messages and offers to a customer point of view and thenpersonalizing these messages and offers so they reflect the individual’s situation,you will increase the relevance of your communications. Our experience indicatesthat response rates can improve from two percent to 10 percent, and sometimes ashigh as 50 percent when communications are made more relevant to customerneeds and customer context.


Data Warehousing in Financial Services• In a survey by the Winter Corporation, the number of corporate databases

containing more than one terabyte of data has doubled in the two years,1998 to 2000.

• The average enterprise will have approximately 2.7 million terabytes ofavailable stored information in 2004 with a compound annual growth rateof 72 percent from 1999 to 2004.

• Wal-Mart’s data warehouse is now legendary topping 100 terabytes.

• Huntington National Bank, Columbus, Ohio, reports that it has integrateddata from all 17 of its sources of customer data so it can paint a real-timepicture of each individual customer. This gives Huntington employees asingle source for all data.

• Capital One Financial Group, Richmond, Va., maintains an aggressivecustomer acquisition and retention effort supported by a data warehousethat took six years to build.

• Grim statistics on the failure rates of large data warehouse projects abound,with some industry observers noting that more than 50 percent of suchefforts either fail outright or fall well short of expectations. In part, it evokesthe proverbial story of the dog catching the car. The challenge of generatinginsights from data magnifies as the data grows.

• A survey of 605 company executives conducted by Seisint, Inc. and ORCInternational reveals respondents believe that, on average, only 66 percentof their data that would be useful to their company’s decision-makingprocess is accessible.

• Typically, if a marketing manager wants to get an analysis of customer data,the request is handed off to the IT department. The request goes into thequeue for database queries and in large companies, the resulting report cantake days or even weeks to produce.

• What marketers want is the ability to sift through the data and createcustomer segments based on virtually any combination of attributes and thendesign a strategy for reaching those segments, without involvement of IT.


Once you have the data in a single view, managers can convert their knowledgeinto a set of business rules that automate complex communications processes tomarket, sell and service customers. You can respond to each individual’s contextualsituation while working within the parameters that assure appropriate profitability.

Create meaningful dialogues with customers at all interaction and transaction touchpoints and, in the process, establish lasting and profitable customer relationships.Companies must engage in intelligent conversations with customers and that meanscreating a seamless customer experience across all interaction touch points. Themain prerequisite to achieve this level of marketing is the ability to access a singleview of the customer.

As reported in Measuring Client Value (CMA Management, June 2001), Royal Bankof Canada began consolidating its data in the 1970s and recently adopted a set ofanalytical tools to work in concert with its data warehouse for use by branch managers.Cathy Burrows, senior manager in client relationships, said “We can now look atsegments based on attitudinal and behavioral factors as well as current and potentialprofitability, expected purchasing behavior, vulnerabilities and channel preferences.Strategies can now be developed not only for each segment but also for hundreds ofmicro-segments within each segment. The ultimate objective of this quest being one-to-one marketing.”

While such analytical marketing of segments as small as one makes all the sense inthe world, amazingly it runs into culture and habit based on years of mass-marketingcampaigns. Many marketers veer from the challenge of creating the hundreds ofsmaller, tightly-focused programs produced on a continuous basis.

The bank teller knew customers’ investing habits and financial needs at particularmoments in their lives and would look out for ways to help them through demandingtimes. Now we have been giving up personalized service of the past in the name ofscale and efficiency. Each of us has become a faceless, nameless person standing inthe teller line. We all get the same homogenous mailers, the same TV commercialsspouting “lowest common denominator” messages that proclaim value propositionsthat do not match the service we feel as customers. We’d change to another bank,but the one down the street is just the same. What, however, if that bank was moreenlightened and could actually deliver personalized conversations and personalizedservices that matched my needs? There will be more providers like Royal Bank ofCanada and Wells Fargo that are stepping out with marketing that is contextuallyrelevant to each customer’s needs. Those that miss this bus might be walking homeempty-handed.

Possible Solution: Rules-based Contextual Marketing

You take the expertise of your best marketers and salespeople, comb through theactions that make them successful and you match this up with how customers makedecisions to create rules that guide communications. For example, if a customerdoes A, B, C and D, but not E and F, recommend Product X. And if the customerdoes not buy X, suggest Y. Put that expert knowledge into an “expert decisionengine” and it can guide the actions of your branch and agent staff, your directmail and your call center service representatives. Each communicator can nowunderstand what is important to each customer and convey the right informationto achieve your immediate objective and to provide a level of service thatcustomers rarely find in today’s mass markets.

Reducing Expensive Customer Service InquiriesAs customers gravitate toward alternative means of contacting your business, contactcenters must contend with many different types of customer interactions. Plus, today’sparticular customers expect you to know who they are and why they are calling.Ignorance to their plight, or the necessity to repeat a previously explained situation,will result in customer frustration and loss of business for your company. If you canmeet the challenges posed by the new communication mediums and manage to usesaid channels successfully, you can both attract and retain customers.

Some of the techniques to use in managing your contact center profitably include:

• Leverage customer information across the organization

When customers need assistance, they prefer to deal with an organization thatcan access information quickly, and provide an update without first passingthem through a series of different departments. The goal is higher qualitycontacts via better information, better timing, and above all, better service. Aspreviously mentioned, you should achieve and leverage a 360-degree view ofthe customer across your organization. Contact center software packages contain


Transforming Call Centers Into Comprehensive Contact CentersIt wasn’t too long ago that financial services organizations struggled tosuccessfully operate call centers with their accompanying staff, business processesand technologies. In the past, call centers were established with the purpose ofcost reduction. As such, call centers were often considered to encompass low-level business functions and significance was considered minimal. Today,however, organizations are now realizing the critical importance of everycustomer contact and are starting to understand the inherent value of the callcenter upgraded into a multimedia contact center. Currently, the strategy of manyfinancial services providers is to transition the capabilities of existing call centersinto multiple, channel-based contact centers.

As the number of customer contact options grows, call centers find they must be able to communicate via multiple channels (apart from the phone), includinginternet, e-mail, voice mail, fax, postal services, etc. In an effort to make allmeans of communication operate successfully, organizations are now looking forunified messaging solutions to help manage the flow of interactions across thevarious channels. In addition, companies are integrating their call centers withweb pages to enable customers to self-serve, as well as to schedule callbacks orinitiate online chat sessions with customer service representatives. These contactcenters provide customers with a mutually beneficial amount of freedom andability. But as the prevalence of contact centers grows in the industry, the qualityof “live” phone calls or person-to-person contact becomes even more critical asthey are the likely result of a less than satisfactory self-serve experience.

Typically, customer service-focused software vendors provide applications thatsupport servicing simultaneous customer inquiries from traditional channels (in-person contact, phone, postal mail and fax) and non-traditional channels (web, e-mail, chat, voice-over-IP and wireless). These applications should be capableof managing business rules across all available contact channels.


several types of technology to handle this. Some of the most common are:

- Complete contact history with call outcomes, so agents can handle problemswithout having to pass the customer to another department

- Immediate information access for agents, with CTI screen pops based on ANI, DNIS and input from IVR, displayed right on the agent’s desktop

- Ability to forward information quickly and easily to other departments, thus reducing fulfillment times for customer requests

- Automatic recording and tracking of customer issues to contact center managers

- Automated direct transfer of data to back-office systems to reduce the amount of post-call work or “wrap-up” time

• Manage contact-center performance

Organizations are realizing the critical importance of every customer contact,and have begun to make the call center the focal point of CRM strategies. Ascall centers are transformed into CRM contact centers, how well you managetheir operation will have major profit implications for your company. Contactcenter software packages contain several types of technology features tohandle communication functions. Some of the most common features include:

- The ability to measure effectiveness of campaigns, lists, agents and the entire contact center with comprehensive predefined and ad hoc reports

- Automatic recording and tracking of customer issues to contact center managers

- Workflow automation to streamline the fulfillment of customer requests, even when multiple business units are involved

- A rules-based recommendation engine that helps agents cross-sell and up-sell more effectively

- Unified messaging and web integration to manage the flow of interactions across multiple communication methods

- Online scripts to reduce agent training time and guide agents through complex call flows

• Dealing with the increasing volume of messages across all media

Today’s savvy customers expect your company to respond to e-mails, faxesand voice mails with the same sense of urgency you would a phone call orbranch visit. But the increased ease with which customers can contact you hasled to a dramatic increase in the volume of incoming messages. Contact centersoftware packages designed to handle this increased burden will include:

- Unified messaging with a single, universal “inbox” on the agent’s desktop that supports delivery and retrieval of all types of messages

- Intelligent routing that directs contacts to the most appropriate agents basedon skill level, subject matter or customer information, not just volume or time of day

- Immediate response capabilities even over the web, with web chat, live agent callback and voice-over-net

- Dynamic call blending to balance inbound and outbound loads during peakor slow periods, and make it easier to schedule resources

Integrating Contextual Communications Increases ROIClearly, an effective CRM strategy should include a means of cost-effectivelyproducing personalized customer communications – ideally, communicationsranging from a simple personalized letter to a complex, customized investment plan brochure. Unfortunately, however, customer communications is a significantgap in the CRM technology offerings currently available on the market. TraditionalCRM vendors have not addressed integrated print and electronic communications.Capabilities for automating the production of customer communications arenoticeably absent from their products.

Coordinating Electronic and Postal Mail With Outbound TelemarketingIntegration of e-mail and direct mail with telemarketing can increase overall ROI fromyour communications campaigns from the traditional two percent to 15 percent, ormore … a magnitude of several hundred percent difference! If you are already doingthis, congratulations! Most marketers tend to wait until the mail responses have peakedbefore launching the phone. The rationale for this old-line of thinking is that mail isless expensive so why cannibalize a $1 e-mail message or a $5 mailer with a $20outbound call. Our experience, based on 20 years of successful use of what we callcontextual marketing, is that mail is simply a springboard for the phone follow-up. Whywait for 98 percent of the names to get cold while waiting for a two percent mail response.

Inbound telemarketing over a toll-free 800 line or well targeted outbound calling arethe most accepted forms of telemarketing because customers can choose when torespond and receive immediate gratification. This requires thorough training, scripting,quality monitoring and detailed results analysis. Our experience indicates that interactive,customer-centric and tightly structured conversations will generate a higher qualifiedresponse. Be sure to script your call for voice mail because that is frequently whereyour call will go. Good telemarketing will not only achieve excellent response rates,but it will create a measurable “halo” effect with 10 percent to 12 percent of thosewho are not interested.


Enabling Unified Messaging

As call centers evolve outside traditional boundaries, getting each message to theright person at the right time, regardless of channel, can create a challenge. Andwith integrated management, this obstacle will become even more critical. Thisscenario is especially relevant when looking at an informal call center, in whicheveryone in the company is an agent. At some point in this environment,everyone in the organization will interface with the customer. Unified messagingtechnology makes this more efficient by allowing both the customer and the“agent” to communicate in the method most desirable to them at a particularpoint in time.

Unified messaging in the call center allows financial services providers to manageincoming non-voice contacts in the same manner as voice contacts – with thesame sense of urgency. In addition, with a unified infrastructure, there areintegrated management and reporting capabilities as well. Unified messaging alsoenables intelligent routing of e-mails, faxes and voice mails, allocating a specificcustomer communication to the most appropriate agent. Some responses, such ase-mail, can even be automated. This guarantees that the customer is contactedquickly with some relevant information, even if a follow-up call is still necessary.Not only does this make the most of your personnel resources, it can also have asignificant positive impact on customer loyalty.

Producing Personalized DocumentsYou know that your customers want to be treated as individuals. In fact, a recentsurvey showed that only 26 percent of respondents would even act uponimpersonal – Dear Customer – correspondence.

One of the key components of a customer relationship management (CRM) strategyis customer correspondence. Within many customer service centers, there is a criticalneed for products that can simplify the process of developing customer communications– communications for which accuracy, timeliness and personalization are at a premium.And, increasingly, customers are requesting delivery of those communicationsthrough the channel of their choice.

However, many CRM products lack document automation functionality – theycannot address the requirements that many organizations have for producing timely,personalized communications based on customer service interactions.

While document composition tools have been a mainstay for automating the generationof print output for mass distribution, few offerings have been able to automate theproduction of all document types, in a wide range of applications. Increasingly,organizations require tools with the flexibility to address not just high-speed, high-volume print applications, but also the ad hoc custom correspondence characteristicsof a customer service response, delivered through e-mail or fax as well as print.There is a clear market for document composition tools that can serve as acomplement to other CRM-enabling technologies.

Many financial services providers will need to revise and develop new and efficientprocesses to manage the production of personalized documents. Some areas thatshould be considered are:

• Use of graphics and color to create easier-to-read communications.

• Replacing legalistic and confusing language in “form letters” with plainEnglish. This allows the letters to communicate as intended, and whereappropriate, leading to increased opportunities for cross-selling and up-selling.

Automating Customer Correspondence Document automation software products automate the process of documentcreation in many application scenarios. Perhaps their widest deployment has beenin applications designed to generate output for mass distribution, such as high-volume statements, bills and direct mail. At the other end of the spectrum, documentcomposition tools have focused on the automation of complex, personalizeddocuments. This ad hoc document automation includes insurance policies, loandocumentation and personalized customer correspondence. These documents aregenerally low in volume, but high in complexity, involving considerablecustomization that entails the use of multiple fonts, color, graphics and other designelements. These high-complexity documents are precisely the type required foreffective customer communications in any CRM strategy.

In an environment of reduced IT resources, deploying multiple software solutionsto address these disparate document requirements is no longer an option. Whatorganizations require is a single-vendor solution for document production that canhandle the entire range of document applications while enabling multi-channeldelivery of the customized documents.



A French insurance company needed to control and optimize the processes of account management and payments. Around 100 internal users on averageprinted 3,500 documents per month. The existing letter production applicationhad poor graphics capabilities and the number of standard letters had grown toover 600, with many duplicate letter formats. With management finding it difficultto manage so many letter formats and being unable to either change letters in linewith policy shifts or to control the free-drafting paragraphs, they empowered theusers to revamp the system in participation with the MIS department.

In the audit that focused on both the ergonomics and the content of the lettermodels, the letter formats were progressively reduced from 600 to 70. The newsystem has a tree structure of pull-down menus that were organized by the letter-writing department and includes logical security and authorization capabilities.Particular attention was given to ergonomics and training, where only two hoursof training were required to become a competent user.

Along with major strides in letter quality and in the management ofcommunications, involving users in the project improved the business modelingactivity and helped to create a more adaptable solution. The company plans toextend their capabilities with the addition of statistical and measurement tools to help further optimize processes and to identify hidden costs.


A large international bank centralized its customer databases while simultaneouslyproviding access to more than 2,000 branches and divisions throughout theworld. Their challenge was to cut the production costs of producing more than 24 million personalized letters a year.

The adopted solution introduced interactive and intelligent functions to the letter-production process. Users are assisted by an array of 450 letter models where thecontent can be altered to suit the needs of the customer. For example, if the letterconcerns an unauthorized overdraft, content is automatically modified accordingto the number of notifications already sent. The wording of the letters is alsoamendable to take into account the size of the overdraft.

This solution creates logical rules within letters, reducing both the number ofdecisions to be made and the amount of manual interventions. For example, asignificant number of letters are produced to accompany complex loan offers,rules are associated with the loans and the system assists users to write the mostpertinent letters, while restricting the choice of wording available to prevent theintroduction of errors or inconsistencies.

The cost of producing personalized letters was reduced by 50 percent, and everyauthorized user in the bank has access to all of the letters produced.



Using Electronic Media: Personalization, Permission and Privacy

Increasing the Potential to Grow ROI via Personalization According to a study by financial services consulting firm Speer and Associates ofAtlanta, only two percent of the 147 financial services providers they polled achieveany level of personalization. Even when personalization is in place, it’s generally ofthe “Yahoo!” variety, where clients can customize home pages, pay bills and sign upfor e-mail alerts. And while this may be an adequate level of service for some,clients who want a firm to interact with them according to their individual needsand preferences will find it sorely lacking.

In fact, a recent study conducted by the Peppers and Rogers Group and RoperStarch Worldwide finds impressive benefits for firms that adopt a relationshipstrategy on all customer tiers. According to the report, about one-fourth ofconsumers (26 percent) who rated their primary financial services provider as“poor” on CRM said they were likely to switch one or more products during thenext 12 months. But only one percent of consumers who rated it as “high” said theywere likely to do so. Even at a conservative $100/household/year profitability,reducing attrition by only nine percent would translate to substantial money for theaverage U.S. retail financial services firm. An institution with just 20,000 customerswould increase profits by $180,000 by incorporating CRM practices such asrecognizing returning visitors and anticipating their needs.17

All interactive communications media can be improved with personalization. Toencourage customers to reveal useful information, you will likely need to first showthem the value they will receive from personalization and, second, reward them forgiving you the information you want – online registration, promotional contests,password authentication, free demonstrations or educational materials. Blend thiswith your existing customer database information, then relate each type of customeraction that you can monitor with a “topic tree” of various customer needs. Thisallows you to form an “interest-based” customer profile. Using configuration andbusiness rules within an “expert system,” you can then match communicationscontent that will most closely address an individual’s interests. Communicatingaround what customers’ interests are will allow you to treat each customer uniquely.

Does it work? Jupiter Communications cites that web personalization boosts customeracquisition by 28 percent in 12 months. Amazon has a 66 percent re-purchase rate(twice that of most retail book stores). MBNA Financial cites customer balances are44.8 percent higher than industry averages.18

Selling Complex Products and Services OnlineFinancial services companies must be highly responsive and able to coordinateactivity and deploy knowledge across multiple sales channels. To meet customerrequirements consistently, you must be able to communicate product and salesknowledge as requested, so customers are never kept waiting for a response.Knowledge Base technology captures the knowledge of the financial servicesprovider’s product and engineering experts, so salespeople, partners and evencustomers can quickly configure the products and options that meet their specificneeds. This type of system manages every step of the configuration process – from needs analysis and product configuration, through pricing and financing, toproposal and contract generation. Flexible deployment options allow configurationon the road, on the phone and on the web.

17Peppers andRogers,Completing theData Puzzle,August 2001

18One-to-OneWorkshop Series,Peppers andRogers

According to Datamonitor, the next evolution of web-based financial services willentail helping consumers with wealth management. These services would includeautomated advice on managing investments, selling retirement accounts, pensions,mortgages and loans. With this type of software, you can provide automated wealthmanagement and financial advice via the internet, intranet, contact center or mobiledevices. According to Forrester, online consumers of financial services are nearly 50 percent wealthier and more likely to buy online than the general internetpopulation. Further, according to Nielsen Net Ratings, these affluent consumersfavor financial web sites that offer more than one service. By expanding onlineservice to include personalized, automated advice, financial services providers arelikely to expand their sales channel, develop loyalty among affluent customers andimprove their overall bottom line.

What barriers will you encounter? Technology? Cost? Time to market? Nope. Thebiggest challenge will be how the current commission brokers will react and othercompensation issues. Before leaping into this channel for communicating withcustomers, you might as well get compensation right. After that, the other barrierswill fall down like dominos.

Taking Advantage of E-mailIt first happened back in 1998 – the year when Americans sent more e-mail thanpostal mail. Today, you cannot be in business without extensive customercommunications via e-mail. Yet nearly half of all retail web sites do not respond toe-mail! And, of course, the biggest problem with e-mail is its unsolicited use – or spam.We’re all painfully familiar with the impact of this electronic nuisance. Consequently,internal standards and assurance for e-mail communications are essential.

There are three e-mail rules to live by:

1. First, don’t spam. (Period.) You will do nothing but destroy a trustingrelationship with customers.

2. Have a spam policy attached to any e-mail, e-newsletter or marketingcampaign that you distribute.

3. Get permission from customers. Let them opt-in (not opt-out) to receive youre-newsletters and marketing campaigns.


Providing Web Self-ServiceBy allowing them to perform many of the service transactions themselves over theinternet, customers will feel as though they have greater control and flexibility inthe way they are served. The ability to perform account tasks themselves empowersthe customer and is likely to improve their level of satisfaction. In addition, sinceweb self-service requires no human contact, it is a cheaper support channel andwill help your company reduce overall operating expenses.

Financial services providers can also leverage web self-serve transactions to expandtheir knowledge of the customer. For example, a registration page might allow fordemographic information to be collected about the account holder. By gatheringthis relevant, useful data, your company can use it to improve its understandingof buying patterns and preferences. As such, you will be better able to targetprospects and subscribers based on their demographics, buying history anddatabase profiling, rather than hit-or-miss mass marketing to the unknown.

Most companies, due to inappropriate use of the channel itself, have missed e-mail’sbusiness-building potential. In fact, a recent study by the Direct Marketing Associationconcludes that most e-mail campaigns are bombs – response rates average less thanone percent, and most e-mail is not even opened. This trend will continue untilmarketers shift their e-mail communiqués from feature-benefit (messages that areappropriate only in ads and collateral) to custom-tailored messaging. The e-mailmedium is an opt-in channel; any unrequested communication seldom receivesmore than a one percent response rate. Why bother?

On the bright side, e-mail can be used for a host of useful customercommunications:

• E-newsletters

• Special promotional initiatives

• Postcards and reminders

• Campaign announcements

• Technical updates

• Sales lead and customer follow-ups

• Warranty updates

• Service news

• Products announcements, upgrades and recalls

• Sales and staff training

• Personnel news

People will opt-in to receive your e-mail if it is engaging and useful. Your task is tocommunicate the facts about your company and products by punctuating yourmissives with content that will engage, inform and motivate recipients to take action,that is, link to your website, download useful information, and of course, buy, buy,buy! In e-mail, content is king. So, unless you have an unusually talented staff ofwriters in-house, you should consider outsourcing the creative portion of your e-mailto specialists who know how to say a lot with a little.

Automating customer service with e-mail technology enables you to quickly deliverconsistent, personalized information. As CRM managers know, a quick response iskey to customer happiness. To automate customer service via e-mail, an integratedcontact center application should feature a seamless interface to popular e-mailmanagement systems. Likewise, the e-mail management system should have tools to assist with timely and accurate responses to customer e-mails. Automating e-mailresponses to fairly predictable, repetitive requests and inquiries will save you money.


Improving Communications via Automation

Automating Marketing OperationsMarketing automation solutions enable your organization to coordinate marketingoperations to more effectively target products, services, promotions and offers tothe appropriate customers. The key capabilities of these software products are theirability to capture and analyze customer data that can then be used to design,execute and measure the viability of marketing campaigns. Automated marketingsolutions often include campaign management applications that support the design,execution, tracking and analysis of campaigns for multiple channels. Theseapplications work with data segmentation and models created within the solutions’marketing analytics applications. Some vendors of marketing automation solutionsfocus on providing marketing analytics applications designed to facilitate thecapture, management, analysis, segmentation and modeling of customer data.Organizations seeking these types of solutions look for applications that provide adata model or support an existing data model where customer data can be capturedand warehoused. These applications typically support the capture of data frommultiple channels, including the web, e-mail and telephone and from multiplesources such as customer databases and third-party data marts. Additionally, theseapplications include tools for managing and consolidating data for analysis,segmentation and modeling.19


Ensuring Privacy In CommunicationsHow do you balance a communications strategy that requires large amounts ofcustomer-contributed information with their growing concerns about privacy?

• Use a prominently displayed comprehensive privacy policy that tells why you need the information and what it will do to make the customer’slife better.

• Explain clearly what you will NEVER do with the information.

• Explain what options the customer has regarding privacy.

• Explain under what circumstances you are required to notify customersregarding their data.

A survey by AT&T indicated that of people who are reluctant to supply personaldata, 28 percent would do so if the web site had a privacy policy, and if that iscombined with a recognizable approval seal, the number goes up to 58 percent.

19Doculabs CRMMarket andProduct StrategyInternalRecommendationReport

Automating Sales ProcessesSales automation enables organizations to create and maximize efficiencies in thesales process. Sales automation applications typically support key processesincluding lead generation, prospecting, contact management, proposal creation andopportunity planning. The overall goals of a sales automation strategy are to betteridentify profitable prospects and customers, using sales-automation applications tooptimize various sales processes.

Organizations seeking sales automation solutions are looking for applications thatsupport direct and distributed sales forces, including field and inside salesrepresentatives, telesales staff and sales managers. These programs typically providetools for managing and distributing leads, generating proposals and for schedulingand managing appointments. Buyers also seek advanced applications that supportthe standardization of selling processes, management of sales territories and robustanalytics for sales forecasting across accounts, channels and territories. Another keycapability organizations look for in sales-automation applications is rapiddeployment of the application and accurate data synchronization to support mobileand distributed sales forces. Organizations also look for sales automationapplications that can integrate with campaign management and marketingautomation solutions.20

Manage Sales Leads to Closure – Effective sales automation also provides thetools needed to capture product, service and business knowledge, making it easierand less expensive to do business while increasing sales and profitability. Whenequipped with an expert knowledge system, you increase the success of youragents and service reps while managing the only thing that is constant – change!

This type of system provides you with the ability to:

• Organize customer, product, pricing and external information.

• Configure products.

• Cross-sell and up-sell.

• Generate quotations and proposals.

• Build a product catalog.

• Enter and submit orders.

• Manage all sales leads and orders to closure.


20Doculabs CRMMarket andProduct StrategyInternalRecommendationReport


Wrapping It Up: Discussion ReviewIn this paper, we have discussed the following facets and issues of customercommunications in the financial services industry:

Assessing Today’s Customer Communications

• Communications channels are proliferating.

- Too many media alternatives make it harder to target marketing groups.

- Customers and decision-makers are inundated with messages.

- Messages are product-centric and self-serving.

- Provider marketing is about products, rather than relationships.

- Communications generally lack focus on customer needs and interests.

• Messages lack differentiation and are confusing and inconsistent.

- Company to company, product-centric marketing messages all sound the same.

- Increased industry competition without value differentiation.

- Too often delivered messages are true for everyone, but relevant to no one.

- Communications are often technical, legalistic and ineffective (trash-bound!).

- Messages are delivered without a consistent cross-channel strategy.

Perfecting Customer Communications

• Shift to a truly customer-centric business model.

- Transform internal business culture, organizational structure and processes.

• Develop customer-focused, contextually relevant communications.

- Learn each customer’s needs, wants and expectations.

- Communicate with maximum personal relevance.

• Deliver a clear, unique value proposition.

- Define what makes your services unique and better than your competitors.

- Differentiate yourself based on exceptional customer service (that will get you noticed!).

- Improve your service to make your value message TRUE (mere lip service won’t cut it!).

Summary

• Manage integrated message content across every customer touch point.

- Develop specific message strategies for each customer touch point.

- Access and integrate customer data for accurate targeting and personalization.

- Extend business process flow across multiple channels to provide consistent service.

Delivering Value via Communications

• Get a comprehensive, 360-degree view of each customer.

• Build sound strategies for multi-channel content management.

• Use integrated inbound/outbound contact centers.

• Produce personalized, meaningful messages and documents.

• Focus on the three Ps in customer service: personalization, permission, and privacy.


Parting Words In this age of information, financial services providers communicate with clientsacross a multitude of media including e-mail, phone and wireless. Though themeans of message delivery may be limitless, the real issue is whether or not you aregetting the true value of your message across to your clients and prospects. Afterall, if your value proposition is poorly crafted, unclear or inconsistent, no matterhow it’s delivered, it will end up in the wastebasket – electronically or literally.

And because today you have the opportunity to contact your customers acrossmore touch points than ever before, every customer service encounter has thepotential to gain repeat business – or have the opposite effect. That’s why now,more than ever, financial services providers like you must take extra care toconsider the quality of messages they are sending. Are the communications youdeliver confusing your clients, or worse … irritating them? And what about yourvalue proposition? Do your messages tell your customers what makes your servicesdifferent, special and better than those offered by your competitors?

This paper has provided you with sound strategies, sensible solutions and usefultools to help you overcome your communications dilemmas. Whether you’recurrently struggling with product-centric communications, an unclear valueproposition, inconsistent messaging or costly customer transactions, the informationprovided in this document should help you to focus your efforts on what is neededto maximize your communications ROI.

To conclude, please bear in mind that communicating successfully across all touchpoints is a substantial undertaking. Trying to do too much too fast could be asdetrimental as not making any changes at all. But don’t wait until you build a hugemulti-terabyte database to begin. Start today and work thoughtfully and steadily.Decide where you are headed and get there in doable incremental steps. By startingsmall and fixing problems along the way, financial services providers can mapofferings to customer segments while getting the desired results more quickly.



This is the third in a series of six white papers that delve into the insights, strategiesand solutions for overcoming the roadblocks to your overall success. This paperdiscusses how to effectively provide a consistent value proposition across all ofyour customer communications touch points. Be sure to look for the other helpfuland informative documents in this white paper series:

To learn more about strategies and solutions for combating the common problemsin the financial services industry, please visit our comprehensive FinancialServices Learning Center on the web site at www.cincom.com/financial.


What’s Next?

The Six Most Difficult Issues Facing Financial Services Managers

1. Changing customer needs that hinder profitable business growth.

2. Sales productivity from multi-channel distribution strategies.

3. Consistent value proposition across all customer communications.

4. Managing and leveraging information technology.

5. Data integration for corporate decisions and restructuring.

6. Maintaining profitability and growth in the face of rising cost and expenses.

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