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March 6, 2000

New CRM Tools Help Financial Institutions Diversify
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McIntosh says the E.4 software provides real-time reporting on marketing campaigns and capabilities for integrating third-party demographics and other customer information with SBLI's customer database. It can also generate a detailed history of what offers have been given to which customers and what customer reactions have been.

Financial institutions are also using CRM tools to manage the ways in which customers contact a company. Epiphany software, for example, automatically collects information on customer interactions at a company's Web site, in much the same way company employees can record customer interactions through other marketing channels, including face-to-face sales, direct mail, and telemarketing.

While some of the most intriguing CRM products provide analytical capabilities for assessing profitability, Bradway says, getting various groups within a company to support product lines outside their direct responsibility is a major challenge for many financial institutions--and a necessary first step to any cross-marketing effort. Product-line managers naturally worry more about their own bottom-line sales than those from other divisions.

CRM tools can't change people's attitudes, but the software makes the technical aspect of such unification easier. Safeco Corp., a Seattle insurance provider with $6.6 billion in annual revenue, started looking into upgrading its CRM system in 1998 as part of a restructuring plan to broaden its customer base. Chuck Stone, the company's VP of information systems, says Safeco suffered from "silo syndrome," which placed each of its insurance product lines--individual life insurance, retirement services and annuities, general-use annuities, and structured claims settlement--in its own silo, with separate customer-service numbers and representatives. If customers wanted information on more than one product, they had to call another number.

"We had a big problem helping our agents sell other products," Stone says. "Systems weren't talking to one another or providing service representatives with a consolidated view of the customer."

The company turned to CRM software from Clarify Inc. (recently acquired by Nortel Networks Corp.) called eFrontOffice, which offers an interface for keeping detailed text records of interactions with all customers across all product lines. A representative specializing in annuities can see a customer's interaction with any other representative at Safeco. Stone calls this capability "cross-servicing," and he says it's critical to driving new business at the company.

Safeco also feeds eFrontOffice basic customer information from a database, and detailed product and customer-account information pulled from the company's legacy systems. With the new system in place, Safeco customer-service reps have a wealth of information to help them answer customer questions and sell new products. For example, a representative helping a customer with questions about a life insurance policy can see the customer's age and might suggest other age-appropriate products, such as an individual retirement account. And if the customer has questions about the retirement fund or other Safeco products, the representative can easily pass him to a specialist.

Stone says the cost of the information restructuring ran $2 million to $3 million, including the Clarify software, other products such as the middleware development tools, and integration. But it has clearly been worth the price, he says, even though he hasn't done a formal return-on-investment analysis.

Customers have to call only one number for all questions, including those about buying other Safeco products. For Safeco and other financial institutions hungry for greater profits from each customer, that's an appetizing capability.

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