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DSC Tech Library

Customer Relationship Management

CRM Customer Relationship Management This section of our technical library presents information and documentation relating to CRM Solutions and customer relationship management software and products. Providing timely customer service information is vital to maintaining a successful business. Accurate information provided in an organized and thoughtful manner is key to business success.

TELEMATION, our CRM and contact center software, was originally built on this foundation. The ability to modify Customer Relationship Management software is important in this ever changing business environment.

Telemation Customer Relationship Management solution and contact center software is ideally suited for call centers throughout the world.

The CRM Journey

Produced by Agility PR and created by Dunstan Thomas

The CRM Journey has been written to help financial services companies get closer to customers. Central to its thinking is that CRM is not merely a technology concern but a people one.

Forging ahead

Profound change in the structure of the financial services market will bring many organisations closer to customers.

Many in the financial services sector have recognised that they need to change to serve their customers better--or risk losing them. The structural changes hastened by depolarisation are forcing many of us to re-examine what we do and ask ourselves how we want to serve the market going forward. For some, this will mean becoming fee-based specialist IFAs. Some direct sales force agents are becoming multi-tied.

Other adviser firms are becoming specialists in administration or even niche product providers. All this change will bring opportunities to reposition and carve out new markets. It should also mean that the customer will be better served.

As part of these developments, there is a greater realisation that identification of specific customer groups and serving those customers more effectively, is one sure way to succeed. This perhaps explains the growing interest in Customer Relationship Management (CRM) programmes in the financial services market.

This guide has been written by financial services software provider Dunstan Thomas and is supported by Microsoft Business Solutions in recognition that CRM programmes are not easy to get right first time. According to Gartner, some 65 per cent of them fail. Part of the reason for these failures is that CRM is all too often treated as another technology implementation driven by the IT department. It is not!

Technology alone can never transform the relationships you have with your customers. CRM must be accompanied by a change management programme which breaks through organisational boundaries and cuts across functional divisions.

By necessity, this sort of programme must be led and driven from the top of the organisation. If the board doesn't get fired up about it, it is more than likely that it will not achieve its stated objectives. It therefore goes without saying that this guide looks at both the technology and people issues involved in making your organisation truly 'customer centric'.

We also see it as part of a journey for organisations. The articles that follow discuss the stages involved in successful CRM projects. They also deal with how to tackle the different agendas at work among different functions of any business. All these need to be considered and addressed if CRM projects are not to be derailed by the very people you need to make them a success. It is also important to have a customer centric vision for the business and create a customer strategy before building any CRM system.

In addition, any CRM system must be built with front to back office integration in mind and should use the power built up in your existing information architecture. If you can't obtain a 'single view of the customer', this ought to be your first step in building any efficient information architecture for customer centricity.

Thanks must go to Microsoft Business Solutions for seeing the value of this short business guide and to CRM consultancy Round for providing some of the diagrams which help illustrate the complexities of realigning the business to create the right environment to make CRM projects a success.

I hope you gain value from its contents.

Yours sincerely,

Chris Read, Chairman, Dunstan Thomas

In search of better customer service

Depolarisation and tighter regulation around commission disclosure has created opportunities for firms to think about customer support.

Advisers across the land are examining how they will present themselves to customers in the light of imminent depolarisation and greater transparency around charging instilled by the long-awaited menu card.

But Dunstan Thomas believes change is extending way beyond deciding to be 'multi-tied' or going fee-based, to a fundamental examination of working practices with a view to serving customers better. To this end, both IFAs and tied agents are starting to look at technology to help them achieve this. Many firms realise that new technology is available which can be deployed to increase productivity and customer retention.

CRM confusion

The signs are positive according to a wide-ranging survey of financial services providers and intermediaries that Dunstan Thomas commissioned earlier this year.

The study, which explored uptake of Customer Relationship Management (CRM), found much confusion about what this phrase really means. Nearly one-third of respondents (30 per cent) saw it as bringing all customer information together into one place, which is certainly one important step in any CRM programme. Nearly half (45 per cent) saw it as the ability to listen and respond to customers' needs and requests. One in five (21 per cent) respondents saw it as the ability to use every communication with customers as an opportunity to sell. The truth is CRM is a many-headed beast incorporating all these elements, but at its heart is a desire to serve customers better than they do today (see figure 1).

Longer-term view

Much of the world of financial advice has been too heavily geared to the one-off sale rather than building long-term relationships with clients. We all know from our own dealings with suppliers that we tend to gravitate towards organisations that try to understand our needs and then respond to them with customised offers. This tendency accelerates as the product we are being sold becomes more complex. The more difficult it is to understand the merits of the product or service, the more we rely on trusting an adviser to have our best interests at heart, i.e. the more face-to-face advice is required. Sadly, there are too few companies that realise this, and financial advisers are no exception.

But advisers that can get customer management right, particularly those which have high net-worth individuals or companies on their books, are likely to do much better in this new, more transparent age. Their emphasis on face-to-face communication already places them in a strong position.

Organising data

Although our survey of a wide-cross section of the market found only 15 per cent of respondents had actually implemented CRM systems, most were investing in activities which must be described as crucial stepping stones to effective management of customer relationships. For example, 10 per cent of those responding are sorting out content and database management systems. Effective database management is a crucial aspect of CRM because it is these customer databases which store the data that can then be analyzed to help adviser firms understand what customers are likely to need--prior to targeting them with tailored offerings.


Another area of clear progress is in electronic business processing. The gradual move towards processing new business electronically should now bring big advantages to advisers. The fact that tasks like quotation sourcing, illustrations, new business application completion and confirmation, contribution analysis and valuations can and will be increasingly done via computer is very significant. Put simply it is now possible to put technology to work to do a lot of the work that previously would have tied up large parts of the adviser's day. This leaves the adviser, supported by his para-planner, with more time to spend preparing for meetings with customers, and ultimately, serving his customers better. So these technological changes will lead to better customer management in time.

Going online

To this end, the Dunstan Thomas CRM survey also gauged the activity of providers and intermediary firms in the area of electronic processing. Again the results are encouraging. Nearly one-quarter (22 per cent) of respondents are building extranets. Extranets are already being used by IFAs to access product information, seek quotes and process new business electronically. As many as 28 per cent of respondents are forming links to existing IFA portals or other internet-based operations, including consumer-oriented personal finance websites. In the meantime providers are rolling out new Point of Sale systems for their tied agents. These systems are designed to help advisers organise their day in a more effective way--again helping them serve their customers better (see figure 2).

Wouldn't it be great if we could get to a point where your computer helps organise your day? Reminders of annual reviews of policies could be pre-populated into the Calendar section of Microsoft Outlook for actioning that week. E-mail shots to relevant clients affected by an imminent tax change could be set up and sent following analysis of your customer database to find out which clients are affected. Your database could be continually refreshed by pre-qualified leads generated by 'click-throughs' from a particular investment website that you have connected to.

The opportunities presented by the arrival of the internet and the computer age are many and various. More progressive IFAs are already beginning to see this. Technology simply makes it easier and quicker to do things that a small minority of IFAs have always done. It has freed up more firms to carry out the sort of sophisticated customer analysis that was only done by a few in the past. Again the survey has some interesting findings to support this view. Sixty per cent of respondents already analyze customers according to what products they bought previously.

Increasing sophistication of analysis

Other organisations are already going further than this. Forty per cent of respondents also conduct analysis of their customer data according to income bracket. Thirty per cent study life stages for insight. With CRM systems and strong database management it is possible to dice and slice data in multiple ways to target very specific groups of clients with new products which have a higher likelihood of being appealing.

Some firms are already taking this new knowledge of what their own customers want and putting it to work to become designers and manufacturers of products for specific target groups. Other IFAs have developed expertise in administration of relatively complex schemes like SIPPs, and are now reinventing themselves as third-party administrators for IFAs and providers which do not want to take on the administrative burden.

Automating business processes

Firms that are able to use the power of the internet to take some of the administrative and regulatory pain out of doing business will do well. Those which can realise the power of their crown jewels--their customer records--through more sophisticated data analysis and funnelling of relevant information through to their desktops to help them manage their day in a way that serves customers better, will transform their fortunes.

Providers and IFA firms are clearly worried about the impact of all this change on their businesses and our survey revealed that few financial services companies are immune from change. (See Figure 3 below for a view of key regulatory concerns which are most likely to impact customer relationships in 2004).

But for those which use the opportunity to explore some of the new technologies and ideas that are already out there to help them change the way they work and re-engineer their businesses to serve their customers better, depolarisation will be their renaissance.

On the trail of successful CRM

Integration, combined with organisational change management, is the key for financial services companies to serve customers better

Many financial services organisations today recognise that they need to serve customers better to continue growing in markets that are becoming more competitive. It is important to know which customers are the most profitable. You also need to know which customers are the most satisfied--and which are not. Why not? Which types of products are customers likely to be interested in buying? When will they want to buy them? What is the likelihood they will buy a certain product? These are the sorts of questions CRM systems aim to address today.

But to provide intelligent, timely, accurate answers to these sorts of questions, financial services companies need to go through several steps.

Stage 1: Define a CRM Strategy

Firstly you need to know what your customer strategy is. How do you want to segment customers? Have you defined specific customer service levels for each segment? Have service level agreements been drawn up?

These service level agreements might determine agreed response times to requests, regardless of sales channel. They could stipulate frequency of phone contact or speed of application confirmation. The CRM strategy might also want to cover questions such as, which sales channels are most appropriate for a specific customer group? And what is the cost of serving a given customer?

In order to serve a specific customer effectively it is important to ensure that business processes are in place to make that customer interaction effective and positive. This may involve workflow links being established between sales, marketing and services functions in the front office to ensure that there is no overlap, while limiting the need for repetition of personal information by the customer.

But you will need to go further than this to develop your service offerings to a point where you differentiate your business from the competition--helping you to secure customers that others miss in the heat of the sales moment. For example, are you able to get a decision in principle to a mortgage borrower within minutes? Can you provide an electronic quotations service via a customer-facing portal 24/7? Are intermediaries able to track progress of a customer's application through its various stages of approval online? Are they able to see the same information, at the same time as your call centre staff? Is the view of the customer consistent and up-to-date, regardless of the sales channel that is being used to reach your organisation?

Many financial services companies have already managed to agree a CRM strategy and carry out much of the business process management work, so that they are beginning to serve some customers better across multiple channels.

Stage 2: Business process management

There is no doubt that the whole of our market has been investing heavily in business process management over the last few years. A rapid surge in 'electronification' means that it is now possible for advisers to source multiple quotations; draw up comprehensive illustrations; complete and send new business applications; gather policy confirmations; take delivery of policy review statements; and commission statements, all via the internet. The reduction in paper-based errors alone has meant a significant saving of time for those lucky enough to take advantage of all this new technology.

This investment in business processing has also undoubtedly delivered some benefits to providers in terms of sales increases and reduced cost of acquiring new customers. Some may have even begun to extend the life of their customers and create additional value in the customer experience along the way. All this is being achieved against a backdrop of an extremely challenging market for all players.

Stage 3: Back office integration

But you cannot afford to stop there. You must also be able to take the growing quantities of data being gathered in your back office databases and bring these together into a more meaningful '360 degree, single view' of customers. It is important to order all customer data so that insights can be gathered easily by those who are trying to understand what products or service offerings are likely to fit which groups of customers.

Stage 4: Back to front office integration

This implies tight integration between back and front office applications to ensure front office staff are managing their day-to-day activities in a way in which the customer-base is best served.

This integration will enable you to push timely information and prompts to frontline customer service staff and financial advisers to help them serve their customers more effectively. One of the main objectives of this integration work is to ensure customers are not kept 'on hold' while staff rifle through paperwork, or worse, resort to the old line guaranteed to reduce sales, "Can I get back to you on that one?" Confidence can be lost fast in these situations and your competitor is always only one or two calls or clicks away.

Stage 5: Realigning the organisation behind the customer

Once this integration work is complete, getting your staff to put it all to work is the next key task. This is the stage which often determines success or failure of any CRM programme. Management time will need to be devoted to considering how best to incentivise front-office staff to provide good customer service. Metrics will need to be established which trap key information, such as the speed of resolving a customer query.

If employees exceed these targets they need to be recognised and even rewarded for this achievement. In this way the whole organisation begins to strive towards 'customer centricity' as staff pursue common goals which are no longer simply about selling more of a specific product. In some cases, organisations will need to reorganise their teams so that they become defined by customer segment or type, rather than by function alone. This is a practice widely adopted in the retail banking world, for example.

It is also important to tackle the issue of 'Customer Intimacy' as Bloor Research (In Customer Relationship Management in Financial Services February 2001) prefers to call it. In essence, if you can serve the customer as a person with his or her concerns, ambitions and lifestyle information rather than simply a policyholder, then greater loyalty is automatically created. This in turn will lead to greater profitability.

The process of designing a system to stimulate the customer to value a deeper relationship with your business is probed by Microsoft Business Solutions and financial services specialist CRM solutions partner Dunstan Thomas.

Their approach, working with financial services companies, is to first analyze the 'pain' that key department heads feel day-in, day-out. Solving these pains should also feed back to serving the customer better. As such, these pains inform what any CRM system needs to achieve in addition to the objectives laid out in the CRM strategy itself.

To illustrate this, two mocked up 'pain sheets' are on the previous page.

These pain sheets illustrate the wholly separate agendas that are at work in different departments of an organisation. But without understanding and addressing all these concerns, any CRM project is unlikely to be successful. Nothing will change unless the system also enables these changes. CRM cannot simply be implemented over the top of the existing organisation and its problems and issues. It must also address deep-seated grumbles which prevent the organisation as a whole from moving forward.

Pain sheet 1:

For head of sales of a large intermediary firm
  • No. 1 Pain: Follow-up on sales leads is ineffective
    No. 1 Solution: Route all sales leads automatically to the inbox of designated sales rep in appropriate territory and alert them that this has arrived
  • No. 2 Pain: There is no manageable sales process
    No. 2 Solution: Organise sales process into stages. Each stage triggers specific associated activities provided 'probability of close' percentage score. Individual sales staff could then be prompted via Outlook on actions that need to be completed to push each lead on
  • No. 3 Pain: We are not cross-selling new products to existing customers in an effective and consistent way
    No.3 Solution: Sales staff could be prompted to follow-up at specific intervals after a sale, particularly on birthdays of policies, for example
  • No. 4 Pain: My sales team has trouble accessing all the right information about current pricing, competitor activity, and all our products
    No. 4 Solution: Make this information available on an intranet, offering an online product catalogue, including brochures, literature, white papers, manuals and pricing.

Pain sheet 2:

For IT director of a major intermediary firm
  • No. 1 Pain: Systems are not integrated well enough to retrieve information from different systems quickly enough to satisfy sales, marketing and customer service team leaders.

    No. 1 Solution: Stronger integration between databases, ERP system and the front-end administration engine could enable these key team leaders to configure their own parameters for analysis and then access this information themselves in near real-time without wasting IT resource with a series of time-intensive, one-off requests
  • No. 2 Pain: It takes too long to set up a new business application to be distributed and processed electronically. Changes in policy applications take a few months rather than a few hours to promulgate.

    No. 2 Solution: Agree business practices, organisational structure and workflow rules built into the system so that fields can be added, XML labels changed and layout moved without having to alter source code. Integration with third-party applications and web services will further speed up the change control.
  • No. 3 Pain: It is time-consuming installing and maintaining software upgrades on multiple devices across several sites.

    No. 3 Solution: Do the install on the company's main server so that all other users automatically get the software or updates without having to install them on each individual workstation.
  • No. 4 Pain: It's time-consuming managing the security of users today.

    No. 4 Solution: Set permissions or restrict what users can see or do and manage changes automatically when reporting structures change.

Top 10 tips for CRM success

So, organisations starting on the road to CRM need to remember the following top 10 tips to achieve success:

  • Draw up a full CRM strategy before you start--determining how you will segment your customer base and how you will serve these segments.
  • Ensure horizontal integration between front-office functions like sales and customer service to eliminate duplication of data entry.
  • Ensure that customers get a consistent experience, regardless of which channel they approach you through.
  • Align your back office to provide the single, 360-degree view of the customer
  • Enable front-office staff to benefit from this back-office integration by being able to analyze customer data to gather unique insights on the fly .
  • Provide workflow technology so that prompts can be sent to front-office staff through familiar desktop applications like Microsoft Outlook and Access, to ensure the customer service levels are enhanced. Ensure that this technology is tightly linked into back-office systems to achieve this.
  • Set up reward structures which reward achievement of customer centricity targets.
  • Consider corporate reorganisation by target customer groups, particularly where there is an identifiable opportunity in given segments .
  • Consider how best to add value to existing customer relationships. If you can add additional value by constantly enhancing customer service and customising offerings for smaller segments of the customer base, then inevitably you will begin to have more success in cross-selling and up-selling to customers, driving up your share of their wallet, reducing customer delinquency rates and stimulating loyalty.
  • Solve internal 'pains'. These gripes are likely to derail any change management initiatives associated with a CRM programme.

A clear run for CRM projects

CRM is not merely a technology issue, it's about making organisational changes to embrace 'customer centricity'.

For companies embarking on the journey towards customer centricity, there are many challenges and pitfalls. After all, 65 per cent of CRM projects fail, according to Gartner. This may be an alarming statistic but it is the case because of the many aspects that need to change throughout an organisation to enable 'customer centricity'. It is never as simple as installing a piece of technology and watching it transform your sales figures.

Conflicts of interest

For example, the marketing director may want to increase response rates from his mail shots but might need to simultaneously reduce marketing costs. Sales directors need to get closer to customers but want to simultaneously automate some sales channels and reduce sales costs. The finance director wants to preserve relationships with customers while reducing bad debt. The human resources department wants to invest in employees but also force their productivity up.

Project ownership

If you are trying to drive CRM right across the business, it is important to bear all these priorities and tensions in mind. It is also vital to know what needs to be done to satisfy all parties that the CRM system has delivered. Common measures for success need to be pre-agreed and signed off. You may need to appoint a CRM project owner to arbitrate between all parties. This may be a CEO's role or could be a director who has a more neutral position bridging several functions, such as a business development director.

But there is no doubt that businesses which are command and control in culture struggle to become truly customer centric, as do organisations which are designed with separate functional business units that find it difficult to work together. Larger CRM projects simply don't work without good communication and collaboration being present. Another stumbling block can be a focus on selling more products and driving down operational costs rather than serving customers better.

Becoming customer focused goes beyond consolidating product databases to reveal the 'single view of the customer'. It means looking at all channels which your customers use to reach you and examining these to ensure they offer a consistent, high-quality and satisfying customer experience. This does not mean automating everything but getting in a position to gather information about customers' requirements and responding rapidly to deliver what customers are asking for. They may very well be requesting an ability to do more self-service, regardless of the time of day, as one customer of Dunstan Thomas' recently experienced. Alternatively, they may want someone to own a problem when one emerges rather than passing them between multiple departments.

Responsiveness is key

Being prepared to listen openly to the customer and being able to make changes to fit in with customer requirements swiftly, will not only set you apart from much of your competition, it will also reduce the number of customer contacts which are driven by errors, misunderstandings, poor communication and inconsistencies of service. Now if your frontline sales and customer service staff can spend more of their day in proactive and positive dialog with customers, rather than fire fighting and complaint handling, the results for businesses can be very significant. Staff productivity and morale rise and customer churn rates fall in tandem. This positive virtual circle will ultimately feed through to increasing the value of each customer as sales and profits increase. Suddenly everyone is happy, from the FD to the marketing director.

Information architecture journey

There is also an information architecture journey for businesses to go through as they make the organisational and cultural changes to become more customer focused. Many firms are investing in data warehouses today to help collate, manage and navigate the data they hold on customers. Some will use business intelligence and other analytics tools to dice and slice that data to make some sense of it all. Others may even integrate this with campaign management to help drive outbound sales activity. As organisations become more customer focused they will begin to consider the systems they use to interface and collect data from customers.

Agents and intermediaries may also be supported by some sort of sales force automation software to help them manage their day and log new information back into central databases more effectively. Many providers are also building extranet offerings to enable intermediaries to download application documentation, and check progress of applications and the status of any commission payments. The ability to personalise responses based on the risk profile of an applicant and offer decisions in principle on mortgage offers while online, is symptomatic of firms beginning to offer systems which respond to customer needs. These sorts of developments are the ones which inspire loyalty and push new customers in your direction through positive referrals.

Workflow integration

But truly customer centric organisations go further than this to provide workflow capability between frontline staff, interfacing with the administrative hub of the organisation so that advisers and other frontline staff are able to see what stage an application process is at, determine the risk profile of a prospect, or know which customers' policies he or she must review that day, week or month. It is this interface, built on top of an entire information architecture, probably built up over several years, which offers a massive opportunity for productivity gains as your customers and prospects experience the benefit of internal access to all this information. Information can become powerful if built on a sound information architecture and customer-orientated culture.

Expertise now available

For those just starting out on the road from product centricity there is now enough knowledge out there in the consultancy community to fast-track progress. In addition, software companies such as Dunstan Thomas have already designed CRM solutions built on industrial-strength platforms including Microsoft Business Solutions CRM. These systems enable disparate systems to intercommunicate effectively, providing access to data in a timely way so that it can be used to impress the customer, secure the sale and cement his or her loyalty longer than your organisation does today. It's in your hands to make the first steps to customer centricity. Your long-term success as a business in the twenty first century will undoubtedly depend on it.

Edging ahead of rivals

Used correctly, CRM projects should work to drive up profitability and differentiate your business from the competition

We hope that this guide contains some useful insights. It should help you define and drive your own CRM programmes. It may also help you understand why some of your early forÍts into CRM have not been the glowing successes you hoped for. At the very least, it will provide you with a view on where you are on the journey to customer centricity and offer you some suggestions on what to look at next.

Remember to consider the agendas that operate inside each function of your organisation. Try to neutralise any conflicting pressures that are at work. What is the likely impact on your customer service team members if they are simultaneously trying to take on a new CRM system designed to enable the company to get closer to customers by engaging with them more regularly, while cutting the number of staff in the department? Look at the sales team which also wants the customer to value a closer relationship with your company, while trying to automate sales channels and reduce costs per sale.

These conflicts within businesses can decrease the effectiveness of any CRM programme and they need to be addressed head-on by senior managers if they are to steer their companies into a position where they are truly serving their customers and prospective customers in a better way.

But there is no doubt that it is worth all the effort. Companies which get it right will begin to edge ahead of their competitors. Those that get it really right will be the leaders in their markets in the future. Good CRM is good business--it creates the basis for strong, sustainable growth for years to come. It's not about making a quick buck at the customer's expense. Conversely, companies which don't define their target customers and increase their dialog with them through a number of sales channels, risk being out of business in a few years' time. So the time is ripe for CRM programmes in your market. Please do make contact with me if you would like to discuss your CRM plans further.

Dunstan Thomas advises, consults, designs, builds and integrates systems for the pensions and investment markets. He has been designing, building and integrating software for the pensions and investment market for more than 15 years. Its Imago-branded range includes modules for Administration, Calculations, Valuations and Asset Tracking, Contribution Analysis and CRM. Dunstan Thomas has been a Certified Partner of Microsoft for six years.

This collaboration has produced Imago:CRM which is built on Microsoft's Business Solutions CRM platform and provides a CRM solution designed specifically to meet the needs of the pensions and investment market. Imago:CRM uses Microsoft's .NET architecture to enable easy integration into all aspects of a financial services company's administration systems. Imago:CRM helps empower customer-facing staff with the right information at the right time to support product sales and customer retention.

Dunstan Thomas' customers include leading names in the Self Invested Personal Pension (SIPP) marketplace including James Hay, Pointon York, Personal Pension Management Limited, as well as other leading names in the financial services market such as HSBC, Jupiter, Zurich Financial Services, Clerical Medical, Standard Life, Friends Provident, AIG, Hargreaves Lansdown, Hornbuckle Mitchell and the National Australia Bank Group's MLC.

For further information about Dunstan Thomas, please contact:
Chris Read
Dunstan Thomas
Tel: 0239 282 2252