COLUMBIA, S.C. – Credit unions would seem to have a natural advantage as the next phase of customer-relationship management – or member-relationship management – solutions and technology sweep through the business world. According to Gartner Inc., a Connecticut-based think tank and consultancy, 40% of enterprises with such solutions in place "will rethink them this year, with an emphasis on balancing privacy with increasing pressure to support personalization." Since credit unions don't share member information, privacy is a bit of a non-issue in the world of MRM, but there certainly are other issues shaking out as enterprise-wide information sharing and personalization continue to take hold. A big part of that is culture shift. "Credit unions are becoming more comfortable with the idea of segmenting members based upon their value to the organization, and modifying pricing and service levels based upon that value," says Sean Yokley, director of research and development at CommunityAmerica Credit Union in Kansas City, Mo., and Overland Park, Kan. He adds: "The MRM concept has served as a baseline for product marketing and design for many years at our credit union, and we have begun to more effectively implement these same types of practices across our service strategies with a front-office MRM application." The $1.1 billion, 112,000-member CU uses Harte-Hanks' Market Advantage as its analytical MRM solution. The data it captures and creates is then sourced to CommunityAmerica's operational CRM tool, FiServ's Customer Contact Solution, Yokley says, which then is used "for an effective and consistent service approach." The next step, Yokley says, will be to integrate CommunityAmerica's "core-data processing pricing system into the MRM delivery mix to allow for more effective member-level pricing strategies." Of course, the first M in MRM is members, and especially at credit unions, they might be expected to wonder why all this information is being gathered. They also may feel like they're being manipulated. WHO'S WATCHING WHO DO WHAT "There are concerns that members might think that a credit union is taking on a `Big Brother' role, but that concern can be met by smart handling of the content communications," says Tom Collins, general manager for CRM Market Advantage at Harte-Hanks in Lake Mary, Fla. "By simply changing the way marketing messages are written, potential damage is mitigated. For instance, why not replace, `Our system shows that you do not have a money market account and that you would be the perfect candidate for one' with `Would you like a brochure on our money market accounts?'" The author of the Gartner Inc. report on CRM shares that perspective. "Enterprises will find that customers want to see why all this data is being gathered," writes Scott Nelson, a Gartner vice president, "and they will expect the CRM experience to reflect intelligent use of personal data. Otherwise, enterprises will not be in a position to ask for the data at all." Indeed, while privacy is not as acute an issue, personalization "is certainly an important one on several levels," says Terry Murphy, senior vice president at USERS Inc. in Valley Forge, Pa. "If you examine the initial implementation of CRM/MRM in most credit unions, they've tended to focus on their call centers. Many of these early implementations completely ignore the Internet and other remote access delivery channels," he says. "Yet credit unions are increasingly moving to member self-service as the primary way to deal with high-value members. This is one reason that credit unions are now looking for a way to better personalize the messages with an MRM solution and to ensure consistency across multiple channels," Murphy says. And, he says, regardless of the degree of personalization, a good system should make call handling more efficient, provide a detailed record of account activities and communications (an organizational memory), provide follow-up analysis of incoming calls and their resolutions, and provide scripting both for answering member inquiries and for sales. The fact that USERS Inc., a core processor, is getting involved with MRM solutions speaks to another issue, integration of the technology across the increasingly complex and multiple platforms in use at the modern credit union. "Integrating the credit union's core data processing system into the MRM concept will be our biggest technological challenge, but once completed, the task of incorporating the concept across all member touch points becomes a much-less difficult process," says Yokley at CommunityAmerica, a SUMMIT Information Systems client. "MRM will require that all technology employed by the credit union be open and relational or we will not be successful in fully integrating the concept and its applications," Yokley says. Just what MRM really is can be a source of some confusion. "In fact, the meaning of the term MRM/CRM seems to exist almost entirely in the mind of the individual speaker," says Murphy at USERS. "To one person it means screen pops. To another it's outbound call scripting. . "What it really should mean is presenting a message to the member that is consistent with both the member's needs and the credit union's objectives, across all delivery channels – which encompasses a number of different functionalities." There's the integration question again. Industry observers and participants alike note that MRM solutions come in various shapes and sizes and often are not well integrated, much less complete. "I think the overall concept of making the customer the center of your financial institution has always been there, but the technology has just now started to evolve enough to address the piecemeal problem," says Melody Traeger, vice president and general manager of Harland Financial Intelligence in Orlando, Fla. "In our technology, for instance, we're making progress toward connecting all forms of intelligence, sales and service, and making it a cohesive, enterprise-wide deployment," says Traeger, whose business unit is responsible for Harland's Maxell and Touche' relationship-management solutions. Integration aside, even understanding the terminology can be a problem in the complex world of CRM/MRM. Take, for instance, MCIF files, a basic building block in that business. "The terms MRM and MCIF are often used interchangeably," notes Collins at Harte-Hanks. "MCIF systems are predominantly backroom systems where individual member data is not accessible by sales people, new-member representatives, etc. While data housed in MCIF and MRM systems are the same, Murphy says, the difference is that "the information, the scores, product suggestions . are no longer being held hostage by technology limitations. "Keep in mind, though, that CRM/MRM systems are just big, empty shells that have to be fed all the scrubbed data, so a portion of an MCIF solution is still required." He adds that "the key issue for CRM decisions is whether the credit union wants an analytical or operational CRM/MRM. "An operational CRM/MRM hosts all the application systems, so integration is extremely critical and costly. Analytical CRM/MRM systems create a redundant database that is separate from the applications, but can communicate via the network to each of the touchpoints. "In either case, the ability to understand member profitability, next-product recommendations, deliver channel usage, etc., is available at the call center, teller window, ATM, PC banking or any other touchpoint." Looking back, Collins says, "One of the biggest changes in the past few years has been the integration of activity-based, costing-based profit models. By looking at members' transactions, their related costs, actual fee income and net margin, the credit union can begin to develop incentives and packages that move high-transaction/high-cost members into less-expensive delivery channels." The Gartner report says the economic downturn caused a scaleback in CRM initiatives and shift in emphasis from revenue enhancement to cost reduction. Nelson, the report's author, also says the return to such tactical projects will hurt large-suite vendors in business overall, but only temporarily. "One change in 2002 is that much-needed large-scale CRM successes will begin to emerge," he writes. "Many enterprises have very quietly overhauled their dealings with their customers, and in 2002 we will see their case studies come to market. "This will provide the validation this space requires and, in the end, may be the most important event in CRM this year." In the credit union space, the outlook is similar, according to Chris Braccia, director of product marketing for Harland Financial Solutions. "Looking in the crystal ball is difficult," he says, "MRM is by and large still in its infancy. Our clients are starting out with it, and as they encounter success, they move it further into their organization. Depending on their size, that can take six months to a year or a year and a half." Traeger, the Harland Financial vice president, adds: "The focus in 2002 looks like it will be on best-practices kind of work. We'll be working with our clients to determine where the technology needs to go." She says that could well determine the direction of MRM development and adoption overall in the next two or three years. Murphy, the USERS vice president, sees it like this: "CRM/MRM technology and its role in credit unions will change a great deal in the next three years," he says. "First, it will increasingly become a requirement, to ensure that the credit union is meeting both its members' needs and its own business needs. "Second, the degree to which CRM/MRM solutions are integrated with host data systems, decision-support systems and potentially other solutions, will change dramatically." He sees that change following one of two paths: "Either host-transaction processing systems will add the functionality now provided by CRM/MRM systems, or the CRM/MRM system will essentially replace the regular service platform for the most common transactions and activities." Murphy concludes that "without this convergence, the credit union staff will be forced to continually move from one system to another during the member-service transaction, which is entirely too cumbersome and may jeopardize member service." And isn't that what this is all about? In that sense, the latest in technology perhaps speaks to a founding principle of the movement. "The ultimate goal of CommunityAmerica's MRM strategy is to enhance member loyalty," Yokley says. "Stronger member loyalty will ultimately lead to increased member satisfaction, better product penetration and stronger financial performance," he says. "MRM in its current stage at CommunityAmerica has already driven many positive changes to our product offerings, as well as led our staff to become much more aware of the importance of long-term and productive member relationships." -

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