The little banks that could

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Since the CRM implementation, North Shore says, the credit union has grown its net revenue by a record 46% in 2001 and has seen its assets climb 21% to $600 million without spending a penny on advertising, mostly by pitching more products to existing customers. "It definitely got us out of our doldrums," Catliff says.

Whether they use CRM tools and processes for pinning down profitability, cross-selling or homing in on underserved markets, small businesses have an advantage during implementation, according to Khirallah. There's often less legacy infrastructure in place to work around, fewer independent silos that need to be unified, and easier communication in terms of training and managing cultural change because staffs are small and local.

"Smaller institutions have a much easier time with CRM," says Khirallah. "In a large organization, they have to figure out a way to convince all kinds of separate lines of business to embrace an enterprise effort. In a smaller institution, it's easier for a CEO to walk in and say, 'This is going to happen.'"

By putting CRM processes and software in place early, the systems and the culture created around them can grow as the business does. "Every small bank wants to be a bigger bank," says Varricchio. "There's a benefit to putting these systems in place while they're small. Then they can scale with the business."

Indeed, local and regional banks and small to midsize enterprises in many industries that don't deploy CRM as part of a carefully crafted customer strategy may find themselves shrinking instead of scaling.

"Before we had this technology in place, the industry was moving so quickly that we were finding ourselves falling further and further behind," says UNCB's Frey. "But now we've not only caught up, we've become much more progressive. We've retained and are increasing our levels of service -- a differentiator in and of itself. And now we can offer more of the broad range of solutions that customers get from the big guys."

How are you using CRM to compete as a small to midsize enterprise? E-mail senior writer Stephanie Overby at soverby@cio.com.

This story, "The little banks that could" was originally published by CIO.

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Copyright © 2002 IDG Communications, Inc.

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