CUMA Conference

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Conference
CUMA
Where credit union managers connect
2002
Dont gamble with your future
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Welcome Developing a Customer
Centric Business
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Introduction

• Dean Wasylyk - Principal Consultant for WayPoint
  Consulting
• WayPoint Consulting provides management
  consulting services.
• Currently engaged at Member Savings C.U.

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Session Objectives

• Provide a definition of a Customer Centric
  business.
• Describe a methodology that has helped other
  organizations successfully transition to customer
  centric business models.
• Presented with 4 case studies.
• Question Answer.

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Audience Survey

• Who is considering, but not yet started a CRM
  initiative?
• Who has a formal CRM initiative currently in
  progress?
• Who has already implemented a CRM strategy and/or
  CRM tools?

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Who gets a headache when they hear the term CRM?
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What is a customer-member centric business?

• A business that has an intimate relationship with
  its customers, such as a small town merchant
  might have with his/her customers.
• Or
• A business that is able to at least simulate this
  type relationship through the use of information
  technology.

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How do I know if my business is Customer/Member
Centric ?

• A customer centric business can answer these
  types of questions for each one of its customers.
• What might customer X need?
• When should I try to sell it to him/her?
• How should I communicate with this customer?
• A product centric business might say to itself
• Lets promote product X to our customers.

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Financial Service Industry Trends

• Market Research (CI Update and CGYE) Indicates
• Financial products and services are becoming
  commodity items.
• Polarizing of financial institutions product
  producers or orchestrators of superior
  experiences.
• Credit Unions best positioned to continue being
  orchestrators of superior member experiences.

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What is Compelling Businesses to Consider CRM
Strategies?

• Your Customers rising expectations.
• Customers are looking for additional value add
  from businesses
• Product Superiority
• Low Cost
• Familiar/Intimate Relationship

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What is Compelling Businesses to Consider CRM
Strategies? (continued)

• Competitive pressures.
• Competition wants your profitable business.
• Proactive selling products and services.

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Post Technology Bubble Burst An opportunity to
focus on customer needs business objectives.

• Some lessons learned from the recent dot-com
  melt down.
• Business fundamentals still matter.
• Businesses with bricks and mortar arent doomed
  to mass extinction .
• Ask your customers what they want.
• Examples of technical capabilities getting ahead
  of demand
• Financial Institutions suspending wireless
  banking services.
• Smart Card pilot put on hold

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Methodology Introduction

• Helped a number of corporations successfully
  implement CRM strategies. (AMEX, Fidelity, 3M,
  GE, Microsoft, Pitney Bowes, Toro, Changepoint).
• Plan customer centric business strategies,
• New ways to market sell products
• New ways to service customers
• Redesign functional activities,
• Reengineer work processes,
• Support with CRM technology.

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Project Phases

• Sequence of Project Phases
• Plan Customer Centric Strategies
• Enterprise Goals
• Customer Perspectives
• Market Conditions
• Competition
• Customer Profiles
• Internal Assessment
• Prioritized Strategies
• Re-define Functional Activities
• Re-engineer Work Process
• Workflow Analysis
• Process Re-engineering
• Support with CRM Technology
• Repeat as necessary

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Dont gamble by leading with technology

• Your customer needs business must dictate the
  appropriate supporting technology.
• Simple exposure to Best Practices offered by
  CRM software solutions cant affect
  organizational change on their own.

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Other factors contributing to failure of CRM
projects

• Lack of executive sponsorship
• Underestimating scope
• Lack of project management expertise, and a part
  time attitude towards project

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Case Study 1 Enterprise Software Vendor

• Presented by Dean Wasylyk

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Case Study 1 - Enterprise Software Company

• Changepoint - Professional Services Automation
  software (CRM module part of solution).
• Role - Director of Sales Development
• Inherited ownership of internally deployed CRM
  technology.
• Not being used by sales force.
• Not providing process/reports to support business
  objectives.

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Enterprise Software Company

• Business Strategies Goals Confirmed.
• Corporate revenue objectives.
• 500 qualified leads per quarter.
• Built a Sales Development operation.
• Contact Centre staffed by Sales Development
  Associates.
• General Business Sales Representative.
• Pre Sales Consultants.

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Enterprise Software Company

• Modified CRM tools to support process
• Patchwork of technology. (Re-configured
  Changepoint CRM, Delano, Spreadsheets, Nortel
  Symposium ACD, Crystal Reports).
• Result - Business goal achievement, sales force
  using system, motivated staff, relevant
  management reports available.

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Case Study 2 Niagara Credit Union

• Presented by Sean Jackson
• CEO of Niagara CU

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CRM MRMHelping NCU grow lives Sean
Jackson, President and CEONiagara Credit Union
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NCU - Our Heritage

• Founded in 1945 by a group of area farmers in
  Virgil, Ontario
• Grew to 15 branches across the Niagara peninsula,
  including 3 Commercial Banking Centres and a
  Contact Centre
• Currently 86,000 members
• Assets owned and managed - over 1.2 Billion -
  largest CU in Ontario

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NCU - Our Market

• Operate in the beautiful Niagara Peninsula
• bordered by Lake Erie, Lake Ontario, the Niagara
  River
• Niagara stretches from Grimsby to NY State
• 450,000 residents
• Tourism, agriculture, manufacturing
• Compete head to head with the Big 5
• market includes many other CUs
• ING and PC Financial making inroads
• We own about 20 market share - and climbing!

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NCU - Our Fundamentals

• NCU has a strong history of growth and market
  success
• New foundations for future success
• Vision / Mission / Commitment statements
• Our Values
• Brand Strategy
• Retail, Commercial, and Electronic Delivery
  Strategies

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NCU - Our Brand

• Brand Strategy
• new lives grow here positioning launched in
  February 2001
• developed after 24 months of market, member, and
  staff research
• clearly positions and differentiates NCU in the
  market
• supported by an integrated approach - marketing,
  products, retail delivery, external relations,
  staff training all tied to brand positioning
• Results
• 96 awareness, 20 share, 1 in consideration in
  market

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MRM - Our Fundamentals

• NCUs Fundamental approach to MRM
• Know who you are - tailor MRM to suit our needs
• Know what youre passionate about - were great
  at building relationships - MRM had to enhance
  what we already do well
• Know your economic engine - understanding
  profitability while balancing it with members
  needs

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MRM - Our Fundamentals

• MRM is simply a component of our Retail Delivery
  Strategy
• Introducing tools procedures to enable staff to
  grow our our members lives
• Organization wide

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MRM - Member Relationship Management

• NCUs approach has always been
• Modest - resist high investment and long term
  payback
• Integrated - took the time to understand the
  needs of all stakeholders
• Build on best practices - use existing platforms
  where applicable (ACE), and build only where
  there are real business gaps (Profitability)
• Staged - Introduce components in a phased approach

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MRM - NCUs Architecture
MRM
Profitability
Householding
Segmentation
Contact Management
Our Business Model
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MRM - NCUs Architecture

• Contact Management
• Seamless Communication between channels
• Sharing of member information
• Electronic trail of conversations
• Simplify/automate referrals across the
  organization
• Automates reporting

MRM
Profitability
Householding
Segmentation
Contact Management
Our Business Model
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MRM - NCUs Architecture

• Householding
• Groups members according to joint relationships
• Allows for staff assignment
• Simplifies communication
• Enables quick and accurate view of member data
  that includes a loyalty view - the full
  relationship

MRM
Profitability
Householding
Segmentation
Contact Management
Our Business Model
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MRM - NCUs Architecture

• Profitability
• Relative
• Member Level
• Household Level
• Product Level
• Enables good pricing decisions

MRM
Householding
Segmentation
Profitability
Contact Management
Our Business Model
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MRM - NCUs Architecture

• Segmentation
• Segments linked to brand
• Based on members life-stage
• Simplifies sales conversations
• Allows for targeted marketing materials and
  products based on life-stage

MRM
Householding
Segmentation
Contact Management
Profitability
Our Business Model
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MRM
In closing .

• At NCU, we know who we are, we know what were
  great at, and we know where were going
• We have solid Brand and Delivery Strategies that
  houses MRM as a key component - not as the
  driver
• Our investment in MRM is modest, and responsible
• Our implementation is staged, to ensure benefit
  from each phase of development
• Were excited about Growing Lives, and MRM will
  help us do an even better job

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• Thank You!

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Case Study 3 Member Savings Credit
UnionMember Connect 2002

• Presented by Sharon Kent
• General Manager

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Background

• Assets 53 million
• Members 5,800
• 75 LCBO Employees
• 15 Honeywell Employees
• 2 ATT Employees
• 2 Shell Employees
• 6 Other
• Branches 3
• Main Branch (LCBO Head 0ffice)
• Honeywell Plant ATT Office
• Employees 14 Full Time

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Back to square one

• Fall 2001 Redefined our Mission
• Why would someone choose Member Savings?
• How would we achieve success?
• How would we measure success?

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Why choose Member Savings Credit Union?

• Superior products?
• Lowest cost provider?
• Superior service?

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Superior Member Experience

• How?
• UNDERSTAND and ANTICIPATE individual member needs.

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How do we measure success?

• High member satisfaction
• Profitable growth
• Primary FI

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What next??? Member Prospective

• June 2002 - Launched Member Connect 2002
• Comprehensive survey sent to all members.
• Survey objective . Understand members
  perspective and identify significant differences
  among members.
• 1,000 cash prize received 17 response rate

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Ongoing activity

• Member Profiles
• Survey results provided basis for profiling and
  segmenting members
• Survey provided insight into the significant
  difference among members.
• Internal Assessment
• Business insights being gained

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Immediate Plans

• Member Intelligence - Updating main data system
  from all new loan apps. (Income, Year and Make
  of Car, Mortgage Info, etc.)
• Enhance Member Communication - Dedicated MSR to
  contact all new accounts as well as inactive
  accounts.
• Increase Profitability - Flag the accounts
  identified as unprofitable for specific marketing
  campaigns.
• Increase Training Better communicate business
  goals and objectives with entire team. Get them
  involved Reward success!!!

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A work in progress

• Redefined Roles
• Sales Development Associates
• Updating Existing Compensation Plans
• Information Flow Work Process
• Will detail the process to be supported by the
  CRM technology
• Technology
• Investigational at this time
• Interim solution possible

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Case Study 4 St. Willibrord CU

• Provided by St. Willibrord CU
• Presented by Dean Wasylyk

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Case Study 4 - St. Willibrord CU

• St. Willibrord has been an early adopter of a
  customer centric model. Relationship banking
  model first adopted in 1988.
• Enterprise Goal
• St. Willibrord Mission Statement describes a CU
  whos value add is the relationships that it
  builds with its owners.
• Quote from St. Willibrord As a part of core
  strategy, CRM results in an above and beyond
  service culture and the development of more
  intimately relevant relationships with
  member-owners the glue that keeps them
  satisfied and loyal for the long term.

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St. Willibrord CU

• Owner/Member Perspectives
• Owner Surveys
• Internal Market Research
• Proactively asking for feedback
• Owner/Member Profiles
• Segmentation of owner/member base. Segments
  include Select, Premier and Commercial accounts.
  Also Urban, Rural differentiation.

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St. Willibrord CU

• Owner Centric Strategies Include
• Contact Centre implemented.
• Proactive sales capability developed.
• Marketing to segments sub-groups based on
  demographics, behavioral profiles, profitability,
  other criteria.

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St. Willibrords Sales Capability

• Roles and Incentive of Staff
• Tele Service Reps staffing contact centre
• Leads provided and product sales.
• Financial Service Reps managing Select owners
• Product sales and customer satisfaction.
• Relationship Managers managing Premier owners.
• Account Manager managing Commercial accounts
• sales, portfolio growth, portfolio profitability,
  customer satisfaction, loan performance, internal
  development, etc.
• All sales staff involved in proactive
  prospecting.

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St. Willibrord CU

• Success linked to Owner Centric strategy
• Owner Satisfaction 8.84 /10
• Owner profitability continually increasing.
• Increased asset size 1987 gt 2002 . 400
  increase.
• Increased membership 10.3 last year.
• Technology
• ACE product developed to support owner centric
  business model.
• Quote ACE provides the infrastructure to enable
  St Ws business model run effectively and
  efficiently providing seamless service across all
  channels to all owners.

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Questions?

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Conference
CUMA
Where credit union managers connect
2002
Dont gamble with your future