Management Update: How Fidelity Investments Uses CRM to Drive Value

Transcription

1 IGG C. Marcus, K. Collins Article 22 January 2003 Management Update: How Fidelity Investments Uses CRM to Drive Value Gartner presents a case study about how Fidelity Investments retail brokerage division enhanced its customer relationship management (CRM) capabilities to better satisfy customers, focusing on cross-functional collaboration to improve high-value processes like lead management. Many enterprise executives are looking for insights on how other firms have successfully implemented customer relationship management (CRM) initiatives. Gartner presents a case study about how Fidelity Investments retail brokerage division enhanced its CRM capabilities to better satisfy customers, focusing on cross-functional collaboration to improve high-value processes like lead management. Introduction Competition and consumer demands are driving financial services providers to invest in CRM strategies that call for various investment initiatives to strengthen competitive position and grow wallet share. Like many enterprises with multiple marketing departments and lines of business, Fidelity Investments (see the sidebar, Fidelity Investments at a Glance ) looked to revamp business processes and deploy technology to execute more efficiently and effectively to better meet customer needs and, in doing so, grow its business. Fidelity s CRM success is due to a focus on enhancing customer value by meeting and exceeding customer expectations and the recognition that technology is only part of an overall CRM solution. Fidelity made sure that the functionality requirements that drove application and vendor selection were highly focused around its key business priorities. The Problem As is common among most large enterprises, Fidelity s marketing function had historically been responsible for generating leads, which were then qualified and distributed to sales representatives whose job was to close the leads. Unfortunately, that traditional approach often fails to take advantage of leads generated by customer interaction channels, such as branch offices and customer service, that receive customer-initiated information requests. Indeed, those leads can be particularly valuable, but they also require special attention to ensure that customer expectations are met on a timely basis. Gartner Entire contents 2003 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Fidelity had already managed to bring together data from disparate operational CRM and transactional systems into a cohesive marketing data mart. Fidelity was also able to leverage the data mart to conduct meaningful analysis and identify potential relationship-building opportunities. In addition, Fidelity had deployed various operational CRM systems that provided efficiency gains and improved quality of service. However, its ability to execute programs in a timely fashion to be more responsive to customer inquiries and to take advantage of derived insights continued to be somewhat limited. Fidelity was able to manage some half-million potential sales leads per month, but the qualification, distribution and capacity management of leads resulted in a timing that ranged from days to weeks and was ultimately associated with low lead close rates. Making matters worse, the sales function s ongoing experience with untimely leads and weak close rates resulted in low lead utilization. The Objective Fidelity identified being more responsive and better prepared to optimally manage customer requests for information as a critical driver for customer satisfaction and effective lead management. It focused on this as a major revenue and profit enhancement opportunity. The challenge involved re-engineering customer information requests and lead management processes and systems to ensure coordinated and timely execution across a variety of business functions and customer interaction channels. The Approach Taken Fidelity focused on driving customer and business value through more-effective lead management by doing the following: Enhancing enterprise coordination to be more responsive to customer needs and expectations Leveraging a deeper understanding of the customer Integrating marketing, sales and customer service functions and related applications Fidelity s senior management recognized the potential opportunity. To affect organizational behavior significantly, a team of executives provided the necessary leadership and sponsorship to drive cross-functional collaboration and effectively re-engineer lead management business processes and incentives. Detailed examination of customer information requests and lead management processes and associated applications resulted in the recognition that significantly improving the timing and quality of response would require an ability to better leverage customer information. It would also require a more coordinated approach to lead capacity management to prioritize follow-up so as to match customer expectations, as well as lead qualification and distribution logic that could be deployed in a highly automated fashion. The three most critical requirements identified were:

3 Use data from a variety of customer, transactional and operational sources, and leverage Fidelity s established analytic CRM infrastructure to seamlessly deliver consistent information at each point of customer interaction. Integrate analytic and operational CRM applications to support expedient data flows that minimize or eliminate latency. Facilitate the development and maintenance of lead qualification and distribution business logic from individuals across functional areas and roles. Leveraging a Best-of-Breed CRM Application Environment Fidelity has relied on a best-of-breed approach to implementation and integration of operational and analytic CRM applications. Over time, the company has selected and integrated applications based on specific functionality to support key business requirements. Fidelity places particular emphasis on leveraging and enhancing its set of CRM applications to automate high-value business processes that accelerate its ability to leverage relevant information to meet or exceed customer expectations, enhance customer satisfaction and improve revenue and profitability. Key Applications for CRM Key applications in Fidelity s CRM environment include: Customer Repository Event-Based Triggering Engine Campaign Management System Lead Management System Marketing Resource Management System Contact Center and Sales Force Automation Customer Repository Fidelity built a proprietary database on IBM s DB2 platform to bring together customer information across all retail products and touchpoints from a variety of operational CRM and legacy customer interaction systems. Event-Based Triggering Engine Information from the customer repository is pumped through Elity Systems event-triggering engine. Event-based triggers are generated based on transactions that are batch-updated nightly in the database. Fidelity currently uses more than 100 triggers to identify opportunities and initiate customer interactions. Campaign Management System

4 Marketing campaigns are executed across all touchpoints using Xchange s (formerly Exchange Applications ) Valex campaign management application. The system maps out the entire communication stream and triggers outbound marketing campaigns. The campaign management system is used to define customer segments and touchpoints for communications. Campaigns include those planned and executed at a segment level, as well as individual-level, trigger-based communications. Lead Management System Fidelity relies on MarketSoft s DemandMore Leads for lead qualification and distribution as well as DemandMore Interactions for execution to the live direct delivery channels. The lead management system determines which lead goes to which channel, while the interaction management application coordinates with the campaign management application and interacts with the operational CRM applications used at the investment and contact centers. Marketing Resource Management System Fidelity uses MarketSoft s DemandMore Programs application to orchestrate the development and deployment of marketing campaigns. The marketing resource management system makes it easier for the marketing, sales and customer service functions to collaborate. Use of the application facilitates taking into account capacity utilization priorities, as well as factoring in resource availability, budget and timing to cut campaign cycle times. Contact Center and Sales Force Automation Fidelity has deployed Siebel Systems front-office CRM applications for use with its 87 walk-in investor centers and five 24-hour contact centers. These operational CRM applications, along with the Fidelity.com Web site, represent the primary touchpoints for serving its individual investor clients. As is common in the industry, particularly when integrating disparate best-of-breed applications, Fidelity spends approximately three to four times more on systems integration than on application software. To avoid reliance on external service providers, Fidelity makes extensive use of its own technical resources, using some 30 to 40 individuals, including staff and contractors, but it also relies on professional services from vendors and a few other third parties to address very specific technical issues. Lead Capacity, Qualification and Distribution To respond promptly to customer requests for information, the most-significant challenges that Fidelity faced were ensuring sufficient response-handling capacity and establishing clear guidelines and executional mechanisms to prioritize inbound client inquiry ahead of outbound marketing campaigns. Although this may be conceptually simple, implementation required enhanced capacityforecasting capabilities as well as re-engineering of associated processes and incentives to ensure that the strategic goals were supported at a tactical implementation level. When it came to enhancing Fidelity s ability to qualify and distribute leads, the single biggest challenge was the ability to support a distributed business rule development and maintenance environment that would allow for broader, localized organizational input. Fidelity was interested in

5 having each of its investment and contact center managers input and administer his or her own business rules pertaining to the routing of leads within the business unit, because those managers are often in a better position to understand the handling capabilities and capacity of their personnel. However, doing this still required centralized oversight via business rules to manage and avoid conflicts. Today, Fidelity uses MarketSoft s DemandMore Leads application to effectively manage distributed business rule deployment and maintenance. At present, more than 400 individuals contribute to the set of business rules that defines lead qualification and distribution logic. These individuals represent disparate geographies and various management levels from the marketing, sales and customer service functions. Leads are currently distributed to some 5,000 sales and service personnel interfacing with the operational CRM applications at the investment and contact centers. Fidelity also plans to distribute leads to independent agents. Fidelity complemented its improved lead capacity, qualification and distribution-handling capabilities with a revamped approach to marketing, sales and customer service that emphasizes the importance of meeting and exceeding customer needs and expectations. In short, orchestrating more cohesive and effective customer interactions involves a lot more than deployment of technology. Timing and Investment Fidelity s efforts to optimize lead management required a significant investment 25 percent in application software (investments had already been made in operational CRM systems) and the remainder in systems integration and implementation. The revamped lead management system was fully operational in six months, with ongoing changes to the lead qualification and distribution logic taking place on a regular basis. The Results Achieved Fidelity s enhanced lead management initiative has produced some noteworthy results. Timing of leads has improved to the point where the most-important leads are automatically qualified and distributed in seconds, with the overall average being distributed in minutes (compared with days and weeks prior to implementation). Consequently, the number of leads automatically qualified and distributed has more than doubled, while lead utilization and close rates have each more than doubled. Critical Success Factors and Lessons Learned CRM strategy and priorities, with a focus on improved customer experience, should be the means to drive high-business-value opportunities. Understanding the customer is not enough and technology is not enough you must be able to leverage insights and integrate and execute across traditionally separate business functions. Leadership, cross-functional collaboration and multichannel collaboration are required.

6 Application selection, deployment and integration priorities must be driven by business goals and requirements. Enhanced lead management requires improved lead quality (qualification and distribution to the right resource) and timeliness (automation), to then increase the ability to handle broader scope (for example, more channels or products) and scale (higher volumes). Training on customer interaction management and revamped business processes and technology are essential to ensure optimal and appropriate use of leads. Bottom Line Fidelity s focus on enhancing customer experience has driven significant customer-centric business process re-engineering, with emphasis on cross-functional collaboration and an ongoing commitment to leverage and augment its best-of-breed CRM capabilities. Organizational enhancements to client inquiry management and lead capacity forecasting, along with the deployment of technology to support effective lead qualification, distribution and interaction management, have resulted in improved customer satisfaction and have more than doubled lead utilization and close rates. Fidelity Investments at a Glance Fidelity Investments is one of the world s largest providers of financial services, with custodied assets of $1.4 trillion, including managed assets of $797 billion as of 30 November Fidelity offers investment management, retirement planning, brokerage, human resources and benefits outsourcing services to 18 million individuals and institutions as well as through 5,500 financial intermediaries. Fidelity is the largest mutual-fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual-fund supermarkets and a leading online brokerage firm. For more information about Fidelity, go to Written by Edward Younker, Research Products Analytical sources: Claudio Marcus and Kimberly Collins, Gartner Research

7 For related Inside Gartner articles, see: CEO and CIO Update: 2003 CRM Predictions Point to Light at End of Tunnel, 11 December 2002 CIO Update: Ten Technologies for 2002 to 2007, 30 January 2002