Where credit union managers connect

1. Conference CUMA Where credit union managers connect 2002 Don’t gamble with your future

2. Welcome Developing a Customer Centric Business

3. Introduction • Dean Wasylyk - Principal Consultant for WayPoint Consulting • WayPoint Consulting provides management consulting services. • Currently engaged at Member Savings C.U.

4. Session Objectives • Provide a definition of a “Customer Centric” business. • Describe a methodology that has helped other organizations successfully transition to customer centric business models. • Presented with 4 case studies. • Question & Answer.

5. Audience Survey • Who is considering, but not yet started a CRM initiative? • Who has a formal CRM initiative currently in progress? • Who has already implemented a CRM strategy and/or CRM tools?

6. Who gets a headache when they hear the term CRM?

7. What is a “customer-member centric” business? • A business that has an intimate relationship with its customers, such as a small town merchant might have with his/her customers. Or • A business that is able to at least simulate this type relationship through the use of information technology.

8. How do I know if my business is Customer/Member Centric ? • A customer centric business can answer these types of questions for each one of its customers. • What might customer X need? • When should I try to sell it to him/her? • How should I communicate with this customer? • A product centric business might say to itself: • Let’s promote product X to our customers.

9. Financial Service Industry Trends • Market Research (CI Update and CGYE) Indicates: • Financial products and services are becoming commodity items. • Polarizing of financial institutions … “product producers” or “orchestrators of superior experiences”. • Credit Unions best positioned to continue being “orchestrators of superior member experiences”.

10. What is Compelling Businesses to Consider CRM Strategies? • Your Customer’s rising expectations. • Customers are looking for additional “value add” from businesses: • Product Superiority • Low Cost • Familiar/Intimate Relationship

11. What is Compelling Businesses to Consider CRM Strategies? (continued) • Competitive pressures. • Competition wants your profitable business. • Proactive selling products and services.

12. Post Technology “Bubble Burst” An opportunity to focus on customer needs & business objectives. • Some lessons learned from the recent “dot-com melt down”. • Business fundamentals still matter. • Businesses with “bricks and mortar” aren’t doomed to mass extinction . • Ask your customers what they want. • Examples of technical capabilities getting ahead of demand: • Financial Institutions suspending wireless banking services. • Smart Card pilot put on hold

13. Methodology Introduction • Helped a number of corporations successfully implement CRM strategies. (AMEX, Fidelity, 3M, GE, Microsoft, Pitney Bowes, Toro, Changepoint). • Plan “customer centric” business strategies, • New ways to market & sell products • New ways to service customers • Redesign functional activities, • Reengineer work processes, • Support with CRM technology.

14. Project Phases • Sequence of Project Phases • Plan Customer Centric Strategies • Enterprise Goals • Customer Perspectives • Market Conditions • Competition • Customer Profiles • Internal Assessment • Prioritized Strategies • Re-define Functional Activities • Re-engineer Work Process • Workflow Analysis • Process Re-engineering • Support with CRM Technology • Repeat as necessary

15. Don’t gamble by leading with technology • Your customer needs & business must dictate the appropriate supporting technology. • Simple exposure to “Best Practices” offered by CRM software solutions can’t affect organizational change on their own.

16. Other factors contributing to failure of CRM projects • Lack of executive sponsorship • Underestimating scope • Lack of project management expertise, and a “part time” attitude towards project

17. Case Study # 1 Enterprise Software Vendor Presented by Dean Wasylyk

18. Case Study #1 - Enterprise Software Company • Changepoint - Professional Services Automationsoftware (CRM module part of solution). • Role - “Director of Sales Development” • Inherited ownership of internally deployed CRM technology. • Not being used by sales force. • Not providing process/reports to support business objectives.

19. Enterprise Software Company • Business Strategies & Goals Confirmed. • Corporate revenue objectives. • 500 qualified leads per quarter. • Built a Sales Development operation. • Contact Centre staffed by Sales Development Associates. • General Business Sales Representative. • Pre Sales Consultants.

20. Enterprise Software Company • Modified CRM tools to support process • “Patchwork” of technology. (Re-configured Changepoint CRM, Delano, Spreadsheets, Nortel Symposium ACD, Crystal Reports). • Result - Business goal achievement, sales force using system, motivated staff, relevant management reports available.

21. Case Study # 2 Niagara Credit Union Presented by Sean Jackson CEO of Niagara CU

22. CRM “MRM”Helping NCU grow lives Sean Jackson, President and CEONiagara Credit Union

23. NCU - Our Heritage • Founded in 1945 by a group of area farmers in Virgil, Ontario • Grew to 15 branches across the Niagara peninsula, including 3 Commercial Banking Centres and a Contact Centre • Currently 86,000+ members • Assets owned and managed - over $1.2 Billion - largest CU in Ontario

24. NCU - Our Market • Operate in the beautiful Niagara Peninsula • bordered by Lake Erie, Lake Ontario, the Niagara River • Niagara stretches from Grimsby to NY State • 450,000 residents • Tourism, agriculture, manufacturing • Compete head to head with the Big 5 • market includes many other CU’s • ING and PC Financial making inroads • We own about 20% market share - and climbing!

25. NCU - Our Fundamentals • NCU has a strong history of growth and market success • New foundations for future success • Vision / Mission / Commitment statements • Our Values • Brand Strategy • Retail, Commercial, and Electronic Delivery Strategies

26. NCU - Our Brand • Brand Strategy • new “lives grow here” positioning launched in February 2001 • developed after 24 months of market, member, and staff research • clearly positions and differentiates NCU in the market • supported by an integrated approach - marketing, products, retail delivery, external relations, staff training all tied to brand positioning • Results • 96% awareness, 20% share, #1 in consideration in market

27. MRM - Our Fundamentals • NCU’s “Fundamental” approach to MRM • Know who you are - tailor MRM to suit our needs • Know what you’re passionate about: - we’re great at building relationships - MRM had to enhance what we already do well • Know your economic engine - understanding profitability while balancing it with members needs

28. MRM - Our Fundamentals • MRM is simply a component of our Retail Delivery Strategy • Introducing tools & procedures to enable staff to grow our our members lives • Organization wide

29. MRM - Member Relationship Management • NCU’s approach has always been: • Modest - resist high investment and long term payback • Integrated - took the time to understand the needs of all stakeholders • Build on best practices - use existing platforms where applicable (ACE), and build only where there are “real” business gaps (Profitability) • Staged - Introduce components in a phased approach

30. MRM - NCU’s Architecture MRM Profitability Householding Segmentation Contact Management Our Business Model

31. MRM - NCU’s Architecture • Contact Management • Seamless Communication between channels • “Sharing” of member information • Electronic “trail” of conversations • Simplify/automate referrals across the organization • Automates reporting MRM Profitability Segmentation Householding Contact Management Our Business Model

32. MRM - NCU’s Architecture • Householding • Groups members according to joint relationships • Allows for staff assignment • Simplifies communication • Enables quick and accurate view of member data that includes a “loyalty view” - the full relationship MRM Profitability Segmentation Householding Contact Management Our Business Model

33. MRM - NCU’s Architecture • Profitability • “Relative” • Member Level • Household Level • Product Level • Enables good pricing decisions MRM Segmentation Householding Profitability Contact Management Our Business Model

34. MRM - NCU’s Architecture • Segmentation • Segments linked to brand • Based on members life-stage • Simplifies sales conversations • Allows for targeted marketing materials and products based on life-stage MRM Segmentation Householding Contact Management Profitability Our Business Model

37. MRM In closing …. • At NCU, we know who we are, we know what we’re great at, and we know where we’re going • We have solid Brand and Delivery Strategies that houses MRM as a key component - not as the driver • Our investment in MRM is modest, and responsible • Our implementation is staged, to ensure benefit from each phase of development • We’re excited about “Growing Lives”, and MRM will help us do an even better job

38. Thank You!

39. Case Study # 3 Member Savings Credit Union“Member Connect 2002” Presented by: Sharon Kent General Manager

40. Background • Assets = $53 million • Members = 5,800 • 75% LCBO Employees • 15% Honeywell Employees • 2% AT&T Employees • 2% Shell Employees • 6% Other • Branches = 3 • Main Branch (LCBO Head 0ffice) • Honeywell Plant & AT&T Office • Employees = 14 Full Time

41. Back to square one… • Fall 2001 – Redefined our Mission • Why would someone choose Member Savings? • How would we achieve success? • How would we measure success?

42. Why choose Member Savings Credit Union? • Superior products? • Lowest cost provider? • Superior service?

43. Superior Member Experience How? • UNDERSTAND and ANTICIPATE individual member needs.

44. How do we measure success? • High member satisfaction • Profitable growth • Primary FI

45. What next??? Member Prospective • June 2002 - Launched “Member Connect 2002” • Comprehensive survey sent to all members. • Survey objective …. Understand member’s perspective and identify significant differences among members. • $1,000 cash prize = received 17% response rate

46. Ongoing activity… • Member Profiles • Survey results provided basis for profiling and segmenting members • Survey provided insight into the significant difference among members. • Internal Assessment • Business insights being gained

47. Immediate Plans… Member Intelligence - Updating main data system from all new loan apps. (Income, Year and Make of Car, Mortgage Info, etc.) Enhance Member Communication - Dedicated MSR to contact all new accounts as well as inactive accounts. Increase Profitability - Flag the accounts identified as unprofitable for specific marketing campaigns. Increase Training – Better communicate business goals and objectives with entire team. Get them involved… Reward success!!!

48. A work in progress… • Redefined Roles • Sales Development Associates • Updating Existing Compensation Plans • Information Flow & Work Process • Will detail the process to be supported by the CRM technology • Technology • Investigational at this time • Interim solution possible

49. Case Study # 4 St. Willibrord CU Provided by St. Willibrord CU Presented by Dean Wasylyk

50. Case Study # 4 - St. Willibrord CU • St. Willibrord has been an early adopter of a customer centric model. Relationship banking model first adopted in 1988. • Enterprise Goal • St. Willibrord “Mission Statement” describes a CU who’s value add is the relationships thatit builds with its owners. • Quote from St. Willibrord “As a part of core strategy, CRM results in an ‘above and beyond’ service culture and the development of more intimately relevant relationships with member-owners – the glue that keeps them satisfied and loyal for the long term.”