Hsbc Customer Relationship
Business Intelligence Solutions HSBC sparks CRM with the Customer Management Assessment Tool (CMAT) As competition in the finance sector continues to heat up, the idea of implementing savvy Customer Relationship Management (CRM) strategies has moved from the “nice-tohave” category onto the critical path for most companies. Analysts’ predictions have fuelled the fire. A worldrenowned firm predicts as much as a 900% increase in CRM spending in the industry over the next five years. The complexities that suppliers face add even more impetus for action.
Banks and financial entities now are managing more business and customer segments than ever before, juggling an increasing number of customer interaction channels, and evaluating an ever-growing cast of business partners. HSBC Bank plc, a prominent UK banking institution already known as a leader in the CRM arena, recently decided to turn up the heat on its implementation of best practices in Customer Relationship Management. The institution chose to take a scientific approach to evaluating how well its strategies deliver by employing QCi’s Customer Management Assessment Tool (CMAT) licensed by IBM.
With this tool, the bank was able to factually measure its current practices and compare the overall score against other corporations. Why CMAT and IBM? “We’ve known for a long time that we had good CRM systems in place, but we did not have any way to benchmark externally against other companies. By using CMAT, we brought many aspects of our systems, practices and resources together for careful evaluation,” explains Andy Ripley, senior manager, marketing development. Of the firms that have been involved with the CMAT study, HSBC ranked in the top ten percent. Now, we want to work toward an even better score by developing more skills and even better capabilities to serve our customers,” notes Andy. The Customer Management Assessment Tool was applied to the retail and commercial banking areas of the bank The HSBC team. in the UK. CMAT provided the bank’s team with many recommendations that are being reviewed today. The tool helped the bank understand that although it has very proficient “front line” salespeople, further investment in sales systems might be considered, for example. “We already knew that CRM tools in the United Kingdom are advanced,” Andy says. As our entire global group moves toward a more cohesive CRM approach, the CMAT study gives a consistent benchmark from which to measure ourselves locally and internationally. ” What’s more, CMAT has the potential to be applied in other HSBC locations around the globe. “We are not treating this study as a one-off exercise,” he adds. “We can use CMAT as a worldwide methodology. ” The CMAT study also helped the HSBC team focus the efforts of IBM around the institution’s data warehouse, its decision systems and methods, its channel integration and optimisation and some elements of processes and efficiency.
The team categorises the CMAT study as a productive use of both their time and that of the IBM team. “Rather than talking about where our institution already is successful, we focused our efforts on CMAT to improve even more,” explains Andy. “Our UK CRM methodologies are being exported to other banks in the HSBC Group. The CMAT study has validated our strategy of adopting ‘best-of-breed’ systems and processes on a worldwide basis. Conducting a CMAT study was a very small purchase with big benefits,” he summarises.
About CMAT Graham Flower, head of customer management, initiated the study and he is currently responsible for CRM vision and strategy. its customer management effectiveness against that of other companies. Additionally, CMAT can assess businesses that have CRM projects at any level of maturity. As businesses implement CRM strategies, and change their business models from traditional “ Now, we talk to customers when we have identified a real need, the timing is right and we have something of value to offer them. ” – Andy Ripley, senior manager, marketing development approaches to new ways of operating, their management continually assesses rogress to see if goals are being achieved. Among the questions repeatedly asked are: “Have profits increased? Have customers shown loyalty? How is our defection rate? ” These questions highlight the point that managing customers is an ongoing process. With that in mind, a CMAT study is appropriate anywhere within the cycle. “Until I became familiar with CMAT, I had never seen a tool that featured a real framework to measure the people, corporate culture, structure, training, communications and other key factors that influence how an organization functions,” says Graham.
The study was comprised of six weeks of effort by head office personnel – those in marketing, research, strategic planning, general management and CEO positions – and front line professionals. In order to ensure that the study was fair, the HSBC team mixed a balance of top performers and units operating at different levels in order to get a perspective of how the CRM messages from the head office contrasted against what was actually happening. In a matter of weeks, CMAT produced enough output and insight for HSBC to clearly see its strengths and weaknesses in customer management.
More than 150 blue chip benchmarks have been added to the CMAT base, so that HSBC was able to measure Independent research indicates that there is a clear and significant correlation between a corporation’s CMAT score and its business performance. CMAT correlation research can be a very powerful way of winning the hearts and minds of senior executives seeking clear-cut return on investment statistics for money spent. The “customer experience” research frequently conducted after a CMAT assessment identifies benefits perceived by clients.
One frequently cited benefit is that an independent, evidence-based assessment such as CMAT impacts senior management teams and forges an alignment of management groups behind a common set of CRM priorities. Prior to the assessment, typically, individuals on the management teams each had their own ideas about issues and problems. CMAT gives not only an objective analysis, but also factual supporting evidence. The CMAT Progression A global contract with QCi enables IBM teams to deploy the CMAT tool anywhere in the world as part of consulting engagements. IBM onsultants are trained in the nuances of applying the tool in different geographical locations. The HSBC CMAT study involved a six-stage interactive and diagnostic process. Stage I, the “set-up stage,” enabled the IBM assessment team to get a better understanding of the areas of HSBC being evaluated and the issues the management team believed were important. The second stage included a review of sales and marketing plans, satisfaction surveys and other relevant research; Key Performance Indicators; analysis data; organizational structures and all data already collected from the previous stage.
Next, IBM and HSBC agreed upon a communications approach for relevant HSBC employees prior to the interview process. The fourth stage included interviewing an agreedupon cross section of HSBC managers and staff and encompassed all topics in the Customer Management model. The team utilised the CMAT starter question set containing over 260 objective questions. and an objective score derived from the CMAT software analysis. In the final stage, Stage VI, the IBM team presented the findings of the assessment to the HSBC management team in a final report.
CMAT as part of a larger strategy The CMAT tool is most often used as a part of consulting engagements involving the Enterprise Customer Analytics (ECA) methodology from IBM. A CRM scorecard of sorts, ECA provides a powerful marketing automation approach for financial services companies by helping to stimulate customer activity, improve service and increase loyalty. This is accomplished by leveraging one or more databases to ensure that each customer gets an appropriate marketing message through the right channel at the best possible time.
Contacts are kept within an overall, optimal marketing budget for each specific customer. ECA closes the information loop by tracking responses, analysing results and dynamically incorporating those results into the next marketing campaign. The components of ECA range from in-depth strategy creation to campaign management and use of advanced customer analysis tools. Overview ? The Challenge HSBC Bank plc in the UK needed a factual way to assess the effectiveness of its CRM systems – people, corporate culture, structure, raining and communications – against local and international competition. ? The Application Customer Relationship Management (CRM) ? The Solution The Customer Management Assessment Tool (CMAT) from QCi and licensed by IBM allowed HSBC Bank plc to benchmark its customer management effectiveness against other companies through numerous blue chip benchmarks. HSBC Bank plc was compared against companies within the finance sector, versus institutions in different regions and against firms noted as “best in class. ” ?
IBM Checklist DB2 ®Universal Database™ IBM RS/6000®(larger banks) IBM AS/400®(smaller banks) IBM Business Partner products The Customer Management Assessment Tool (CMAT) from QCi 2. Infrastructure: defines, develops CMAT is the first of seven compoand assists with creation of necessary infrastructure, including real-time, automated capabilities to generate accurate, data-driven decisions. 3. Data Warehouse/Operational Data Store: provides methods and models to integrate real-time data into existing data warehouses and/or data stores for sharper decision-making capability. ents of ECA: 1. Strategy: utilises the Customer Management Assessment (CMAT) process in combination with assetbased segmentation techniques to create an actionable, comprehensive plan to assess risk, forecast return on investment, and identify profitable customers. In Stage V, the IBM team prepared a Customer Management Assessment report identifying strengths and weaknesses within HSBC Bank’s CRM environment. The report included detailed recommendations 4. Web Analytics: uses advanced statistical and data mining techniques to provide Web site traffic insights.
Clearly identifies where traffic originates, what customer preferences are and how to approach desired customers effectively. Analysing aggregate Internet traffic patterns delivers the knowledge to create predictive sales indicators and potentially increase revenue across multiple channels. 5. Data-Driven Personalisation: provides highly advanced analytic models, integrated with a business rules engine, to anticipate and react to individual customer preferences in real-time. 6. Campaign Management: recommends and implements a solution to lan, optimise, execute and track Internet and/or multi-channel marketing campaigns, including the use of current techniques such as event/trigger-based communication and permission marketing. 7. Multi-channel Optimisation: combines online and offline transaction data with campaign content data to build optimal contact strategies for each customer across all marketing channels. ECA provides capability to achieve and sustain meaningful strategic and competitive advantage. ECA delivers truly personalised service, through any marketing channel, when and where customers choose.
This is vital to capturing customers’ loyalty and value. Futures Both the QCi team that originally developed the CMAT tool and the HSBC team have significant future plans. QCi soon hopes to offer a practically-based knowledge tool to support CMAT engagements. The tool has several dimensions, providing manageable masses of immediate knowledge that an assessor can use to build presentations, business cases and assessment reports. The HSBC team in the United Kingdom hopes to spearhead CMAT studies in other smaller banks in the institution’s network.
By end of this year, the group also wants to complete another CMAT study again in the UK to monitor progress since the first study was conducted. “We developed an action plan that would help us implement those requirements that are important,” explains Andy. “An important component of that plan is regularly monitoring our progress. ” All in all, the HSBC team feels that it has come a long way. “Now, we talk to customers when we have identified a real need, the timing is right and we have something of value to offer them,” says Andy. We don’t push products at random. ” As the team moves forward, it will be reviewing data mining capabilities and looking at various tools that can be applied across the entire network of branches. HSBC continues to use new technology and new techniques to maintain its position as a leader in the area of specialised customer service. Want to know more? For more information about HSBC, visit: http://www. hsbc. com. For more information about IBM solutions for specific industries visit: http://www. ibm. om/industries/ financialservices. © Copyright IBM Corporation 2002 IBM Corporation Global Business Intelligence Solutions Route 100 Somers, NY 10589 Printed in the United States of America 08-02 All Rights Reserved IBM, the IBM logo, AS/400, DB2, DB2 Universal Database, and RS/6000 are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries or both. Other company, product or service names may be trademarks or service marks of others.
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