foo ne OKO Gabo ater : "Case Study: e-CRM in Robeco Private Bankin, 9% mp Z ‘(""_2-“The Rabo Robeco Bank Ltd. is a'relationship private bank with its headquarter “ in Switzerland, The bank has 8.0 billion US $ of assets under management. In 1998, the bank made a decision to integrate a program of change, which they christened “Avanti”. This program was' designed to focus on proactive and. segmented Customer management and addressed key aspects of the ofganization, processes, systems and staffing, aimed at enabling the Customer relationship managers to provide a much more comprehensive service and increase revenue and profit per Customer. The project was really driven from top management, with some initial resistance from the bottom. One of the major initiatives within the “Avanti” program was the implementation of a new Customer and prospect. management system with Cambridge as the consultant, At the time the decision was made to go ahead with the implementation of a CRM solution, the bank as negotiating am itially, the Bani had been spending ‘large sums of mdi jon and needed to have a more integrated approach to Custorer and prospect management. With over 60,000 prospects and leads with a conversion rate of approximately 10% through mailings and individual contacts, the bank decided it needed to refocus its efforts to customer retention in ¢ dition 19 acquis isi rhe bank, was Providing, its. a Customers with ia-full 1 sh and : transactions and interaction via phone, post, fax, email, Internet services’and branches, at a distance physically but not at a distanéé’ mentally. Building relationships at a distance is becoming more complex, according to Robeco The bank believed it needed to’ refocus on existing Customers in addition to acquisition, by .improving Customer retention, Share of «vallets (related to measuring tloyalty) and Customer referrals. The Customer managenient magement segmented active Paper-driven istration/Advice Balaride 60%! 40% Bi FEléétronically driven iAdmiiiistration/Advice Balance NL 30%: 70% CRM StrategyNs The e-CRM Strategy Robeco looked for external partners for guidance. ‘Fhe company spoke with number of differént players including PricewaterhouseCoopers, who had earliét” given advice on the entire: direct business model in 1998, and Cambridge Technology Partners. At the time, Robeco wanted a more technolojzy-oriented approach, so it decided to start with Cambridge, Additionally, it had a preference for Cambridge's fixed-time fixed-price approach. Robec responsibility rather. than. giving..full project manageme! idge. The tegm included a senior and a junior project manager.and two eople from Robeco’s side and very senior project managers from Cambridge. Robeco felt it needed to be involved in the project management side and that the transferal of knowledge to internal'IT people was essential. The main objectives to achieve: better Customer service and'improve the overall prospect base included the following: Custoniers — Customer profiling -— Customer profitability/revenue analysis + Contact-management : — Service plans. — Proactive follow-up for marketing. campaigns — Correspondence.managemient-letters,—faxes,—e-niail-- — Reminder management *— Enld-user’queries and’“mini campaigns” — Compliance alerts Prospects — Structured follow-up ‘for prospecting — Automated and personal follow-up The e-CRM Solution: The e-CRM solution that was chosen“was*Vantivé version 8.0 as @ base and was designed, developed and implementéd between November 1998 and October 1999. The Vantive solution was an out-of-the-box cross-industry application, as at the time there was no application available specifically for the banking or private banking sector. The solution did have some prospecting functionality which was perceived to be applicable to the cross-business sector. However,‘the customer functionality had to be built into the Vantive product. The e-CRM architecture for the Bank is shown.in Robeco, decided to create a group group called the Customer ser service department,ayhich would be résponsible for making sire ame available.online. ¢- was, s considered! io'be which was a separate project, was the’secoid funictlonality. The whole approach to e-business Was to Focus on rice amie d advie§ and not on transactions. One of the critical things Robeco noticed" Was that it had to change ihe whole processing side of its operations since everything was moving online, letters and faxes were being scanned, and the inbox was flooded with e-mails which created a different kind of routine. One of its priorities was to improve the servicing side of the business, create easier account access and access by e-mail in order to provide quick and timely responses : Operational: Channel Services ‘ CRMWVantive Customer - Touch Points Prod. Admin CRM Front} . Systems End HE Transaction i Ee , Systeme Interaction;:| Pe ot foe 4 || Management| Fe | Gatewars | . + gystem=<| Regd Tnsight Engines: : 3 Master Custoiier A Database ' : 3 — ant >| National Leads.| Data Warehous Date Mining | = / a ~~ Third Parly Lo leet Analytical aaa a iFacsimiléy Contact Management e-CRM Architecture at the Robeco Bank Service Segmentation transaction behaviour and the ‘frequency of transactions. "In the design phases |} the program also segmented people on the basis oftheir service needs" those that were more active had a different kind of service plarttham those that had a more passive approach. To a great extent there was.a mass marketing campaignapproach, but micro campaigns involving each Uesk starting a /a campaign on its own Customer base were introduced in early 2000. This type of segmentatiof led the bank to develop stronger relationships with Customers and-become moi: proactive with the most profitable segments in terms of advising and sellind® Customer-Centric Data Warehouse The bank deveibied itsown customer-centric data warehouse solution in house. Tt was then abhig@:3egment its Customer base not only by the different levels the ility of the Rabo, Cu Customers iS information was al in terms’ of mapping out a . after the agin commercial, ection for the bank. Training « Project managers; ‘product champions and business managers who could drive the business use ‘of the project provided training to’ the end-users. Systems administrators took-care of the-training-for the applications. Measuring the Benefits Through the’ implementation. of the -Vantive: solution.the bank hoped, to.realize the benefits based’ on. its. initial: assumptions as represented in Figure-1.15. According to Robeco, it already knew there was nothing available in the market place and . whatever ‘solution it chosé would therefore be: costly, as a.lot of customization WOuld be required." Initially it thought the project would cost around US'$ 1.5 million, and grow with ongoing costs to reach US $ 3.4 million over 5 years, but after implementation the costs. reached US $ 2.3 million growing to US $ 5.5 million, as can be seen in Figure-’ . The benefits-analysis. information is depicted.in Table 1. The customer loss rate was calculated based on improved customer intimacy. The bank expected that by having more contact. with Customers, and becoming proactive’ rather than reactive, it could then calculate the impact on a cumulative basis. An increase-in Customers partially and_by. Customer. i ad to referrals, The customer loss rate was, based on the total Customer base and the goal was to reduce the Customer loss rate of 6.5% in 1998 over a five-year period to 4.1%. Based on incremental figures adding up over a 5-year period. it expected to have found 980 more Customers (about 736 by retention and 234 by referrals) by the end of 2003. The impact of improving the Customer loss rate from 6.1% to 4.1% over time on an incremental basis was estimated at US $ 350 million in assets under management (AUM) based on the impact over five years. Byclearly recording and tracing the movements in customer acquisitions and retention on a periodical basis the bank is: quantify customer and shareholder value. Although it isa little-early to measure tie SUCCESS of this project, all meirics have been put into place. Robeco was also very concemed “about user acceptance, It spent a lot of time with Cambridge to ensure it was building a system that would be usable in the future. At the design phase there was intensive ‘participation from the (potential and future) users -on thé relationship managément level, on campaign management and on the prospecting, side. The Company even let users sign off cerlain functionality’s. However, not all of the benefits ‘have been through financial measurements, some have been | accounted for by so-called “soft” benefits s tter communication with the wa fe paper ing the processes and requests from Customers to electronic, thereby improvi allowing for’a better balance between.