X MARKS THE SPOT

When Vantage Credit Union decided to develop a customer relationship management system, it chose to pursue a different path than other organizations have taken in launching CRM programs.

Vantage CU is working to create as complete a portrait of its members as possible from information already

squirreled away in its own database and related technology solutions. "Our goal is to serve members better and have better information about our members in one location-a consolidated profile with some new functionality," says CUES member Eric Acree, EVP/sales/lending/marketing at the $485 million St. Louis credit union (www.vcu.com).

CRM is a highly touted member service and sales solution that sometimes has a hard time getting off the ground and living up to expectations that it will allow front-line employees to provide more personal service. A lot has to go right, both with the information the CRM system captures and presents about members and with the way employees use that data.

DOING CRM RIGHT

Lots of credit unions have embraced the idea of a sales culture in which front-line employees gather data about members from members to help zero in on cross-selling opportunities. "There's this whole philosophy about how you do this right," says Steve Williams, principal of Scottsdale, Ariz.-based Cornerstone Advisors, a CUES Financial Suppliers Forum member, and CUES' partner in CUES Tech Port. "But we stood back and wondered, 'Has anyone asked consumers what they think of this approach?'"

In the fall of 2005, Cornerstone (www.crnr stone.com) convened several focus groups to discuss the idea of developing a "sales profile" on their first sit-down at a credit union. The scenario presented to focus groups was a member walking into a branch to open a checking account. During this encounter, the member service representative asks a series of questions not directly related to the new account, such as: Do you have kids? How old are they? Do you own or rent? Do you own or lease a car?

Focus group participants were almost universally negative in their opinions of this approach.

"The reaction of members can be close to revulsion," Williams reports. "They told us (a) it's none of your business, and (b) they know this is just an attempt to sell them more products, which they don't appreciate."

A third complaint about the sales profile approach is that members feel it takes too much time when most of them would prefer to get in and out of the office as quickly as possible.

The bottom line? CRM can seem intrusive when CUs lay the responsibility on members to supply all the information needed for a profile in a single setting, Williams contends. The problem extends beyond the time requirement to encompass privacy concerns.

"People just don't want to open up every aspect of their lives," he says. "When someone says, 'Give me all this information,' most people feel appropriately suspicious about that."

Most members understand the need to supply personal financial details when they're applying for a loan, and they typically do so without complaint. As a result, the credit union already has a treasure trove of valuable information about members tucked away in their lending application system. When credit unions take responsibility for migrating that already-available information into their CRM system, they take the onus off members to supply it.

That is the approach Vantage CU has taken. "We decided two years ago to pursue CRM to enhance our knowledge and the service and sales abilities of our staff with members, but we're developing a Pivotal CRM solution that may differ from what other credit unions have tried before," Acree says.

The credit union is leveraging the CRM software from Pivotal Corp. (www.pivotal.com), Vancouver, British Columbia, with other automation from FORUM Solutions to pull together all the data the CU has tucked away about its 90,000 members.

Vantage CU had signed on for TAPS Enterprise Lending software from FORUM (www.forutnsolu tions.com), a credit union service organization of $940 million FORUM Credit Union, Indianapolis, earlier this year. As Vantage CU learned more about FORUM's ability to integrate technology and data from diverse systems, the credit union began switching gears on its CRM development to take advantage of this new direction.

"Now we can build on all the strengths of our existing systems," Acree explains. "We don't really need to ask our members for additional information. We'll use whatever data we already have and capture new information about members' transactions and interactions with staff to identify cross-sells and offers that would be in line with their needs."

Vantage CU plans to integrate all the data available through its core processing system, consumer loan application and processing software, and automated solutions for collections, credit card processing, mortgage applications and processing, and deferred compensation products.

For its part, the Pivotal CRM system includes a marketing component that will take the place of a marketing customer information file program to store and analyze household and demographic data. "With all of this information compiled in one place, we will have the data we need to improve member service and the tools to act," Acree says.

THE RIGHT START

When executives at Vantage CU began talking about improving member relationships, they were exploring the need to have better information about members, better sales and service tools for front-line employees, and ways to develop relationship pricing and other methods to develop and maintain member loyalty.

"We didn't even know we were talking about CRM," Acree recalls. When the executives put a name to what they were hoping to achieve, their next step was to learn more about relationship management and share those concepts with their board. Only then when they realized that their desired approach was CRM did they hire a CRM consultant to help identify what type of solution would best achieve the goals Vantage CU had established.

"Even then, we spent the majority of our time working on workflow processes and how the processes impact people and how best to complete those processes," Acree explains. "The technology was the final piece of the puzzle to enable our desired processes."

The CRM consultant facilitated a series of interviews with Vantage CU executives, managers and front-line and back-office staff to identify and rank the key issues, or "pain points," the credit union hoped to resolve with its relationship management program. The executive team set a strategic vision for CRM, and then the credit union drafted an RFP based on both the strategic vision and the requirements identified by staff and management.

"As we went forward with which functions would be launched when, staff and mid-management essentially designed the system," Acree says. "We had input from our financial service reps, tellers, CUSO reps, marketing team, and branch managers and assistant managers. All the stakeholders had an opportunity to give input, which we believe will help with buy-in."

There were some disagreements along the way over system and screen design, but Acree characterized them as "good constructive debates about work flow-who's responsible for what at what point in the process?" The important point is that those decisions were made by and with the support of staff and mid-management who will be involved with CRM on a daily basis.

"This year, 2006, has been the year of building-examining software, mapping things out, and looking at 'as is' processes and then 'to be' processes," Acree adds. "It took a lot longer than we expected to work through the people and process aspects, but we went with technology last because it's the enabler of all the other work we've done."

CRM systems come in many shapes and sizes. Constance Anderson, speaker and consultant, Constance Anderson Consulting, Jersey City, N.J., describes the ultimate CRM solution as a fully loaded system that provides a 360-degree view of the member household, perhaps overlaid with demographic and income ranges, based on ZIP code. She suggests that any CRM effort must begin, as Vantage CU-'s did, with an old-fashioned needs analysis that involves the entire organization.

Planning for customer relationship management should coincide with strategic and business planning, she adds. "The main question is not, 'What kind of technology do we want to buy?' It's 'What measures are we going to use to show that this investment is worthwhile?'"

For many CUs, that primary measure might seek to quantify the depth of the member relationship through products per household or revenue production per household. The Net Promoter Score"1, proposed by Fred Reichheld in his book The Ultimate Question, is another possible metric. That score seeks to measure member loyalty with the question, "Would you recommend our credit union to friends and family members?" (Read more about Net Promoter Score on p. 62.)

HIGH HOPES

By combining the information stored away previously in separate data silos, Vantage CU hopes to improve the specificity of products and services employees can cross-sell and to enhance member service by facilitating a kind of "continuous conversation." If a member calls with a question about a product and then calls back a week later with another question, the employee taking the second call should be able to access notes from the first call and pick up the conversation more productively.

Vantage CU plans to begin rolling out components of its CRM system this month. "We're not deploying everything at once," Acree says. "CRM requires a culture change, so it needs to be introduced in stages over a series of months to get employees up to speed on the various new functions one step at a time."

Rolling out a new CRM system in stages can help employees become familiar and comfortable with new tasks and ensure they are using the system effectively, Anderson says. For example, the problem resolution task might be one stage in which employees learn how to categorize and record what happened when they solved a member's problem.

"Every new stage means employees need to change their routine," she notes. "They need time to do the job right."

As the executive sponsor of Vantage CU's CRM program, Acree says he is most pleased with the number of employees who've been involved in developing the project and with their enthusiasm now that it is coming up to speed. "They get it," he says simply. "They know what we're trying to do."

In addition, at all levels of the credit union, people understand that CRM is not just another one-time project. "Our mission is to leverage customer relationship management as a core competency-it's necessary at a strategic level," Acree says.

Given the extent to which CRM has ruled his work life in recent months, it's no surprise that Acree has taken to comparing how other companies manage their customer relationships. He notices, for instance, that when he calls his phone company or cable TV provider, he is asked to key in his phone number or account number. Then, when he is connected to a human being, he is asked to repeat that information.

On the other hand, he recently called American Express and USAA. In both cases, he was asked to enter his account number and he was transferred twice to get all his questions answered. But in both cases, the people with whom he spoke knew who he was and what he was calling about.

"It's still an uncommon experience when you don't have to repeat information or get transferred and have to start over," he notes. "When it's done right, it really is a shock. People notice."

On the verge of implementing its CRM system, Vantage CU executives look back and realize that they underestimated the time, money and effort that would be required to develop a system that brings together member information from different systems and analyzes that data to customize sales ideas.

"But we're confident it will pay huge dividends down the road," Acree says. "This is the most challenging effort I've ever worked on, but also the biggest and most exciting in terms of its potential to transform the credit union for members and employees."