CRM Is Critical in Retaining the Affluent, Study Finds

Share this content:
Getting to know customers could not be more critical than in the financial services arena, according to a study released yesterday.

And not knowing the customers could result in a loss of $700 million in profits.

According to the study, titled "Customer Relationship Management Confronts the Financial Services Crisis," traditional firms are not as skilled as nontraditional firms at building and holding customer relationships.

The study found that 22 percent of consumers in households that earn more than $75,000 annually rate their financial service providers as poor and will likely switch one or more products within the next year.

Only 5 percent of affluent consumers who consider their providers good at CRM are likely to change products.

Out of all consumers, only 28 percent said their financial service providers cater to their needs, while just 26 percent of affluent customers said the same.

Peppers and Rogers Group and Roper Starch Worldwide, which conducted the study, say they are the first to gauge the impact of CRM services on retail financial services customers.

The study surveyed 1,603 U.S. adults in August 2000. About 1,027 earn more than $75,000 annually. Jim Fouss, vice chairman at Roper Starch, said the data for the study are projectable to 103 million U.S. households, of which 23.5 million have annual incomes of more than $75,000.

Fouss concluded that commercial banks and other financial institutions are, for the most part, poor at building "meaningful relationships with their customers." Because of this, he estimates that they will lose $700 million in annual profits.

Investment firms earned the best CRM scores among the affluent, averaging a 6.9 on a scale of 10. Credit unions followed with a 6.5 rating. Mutual fund companies, community banks and commercial banks trailed at 6.0, 5.9 and 5.7, respectively.

Peppers and Rogers Group, Norwalk, CT, is a consulting firm in the CRM business. Roper Starch, Harrison, NY, ranks among the top 20 global marketing research and consulting companies.

Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above