Schwab sees CRM payoff

Who Is He? Robert Seidman is senior vice president of the integrated client experience group at CRM pioneer The Charles Schwab Corp.

While other companies have tried and failed to wring competitive advantage from their customer relationship management (CRM) systems, The Charles Schwab Corp. keeps squeezing out value. The San Francisco-based financial services firm was an early adopter of CRM in the 1990s. Despite a 25% decrease in operating revenue and a 52% drop in operating income last year, Schwab is continuing to invest in tools that give customers a more integrated, personalized experience, whether they visit a Schwab branch, make a phone call or visit Robert Seidman, senior vice president of the integrated client experience group at Schwab, spoke with freelance writer Robert L. Scheier about the past, present and future of CRM at the company.

What does "integrated client experience" mean? Through the '90s and the first part of 2000, we ... had a lot of things happening in the branches, a lot of things happening in the call center and a lot of things happening on the Web. Now we're very much focused on bringing all those experiences together so that ... wherever you deal with Schwab, you're dealing with the same Schwab.

Is this integration tied to specific financial goals? We're developing the capability to provide different customers ... information tailored to them based on what their needs are. We know that [improved] experience will [lead to] things like incremental revenue.

In terms of cost-cutting, we developed on a natural-language search tool [from iPhrase Technologies Inc. in Cambridge, Mass.,] that also has a lot of stock-screening capabilities. Based on usage of the search tool, which reduced calls and e-mail volumes, we're saving about $125,000 per month. The payback period was probably less than a year.

Investors are spooked by the down market and the Enron collapse. How has that changed your CRM and Web strategies? It only makes our need to do CRM more important. We still have just as many people visiting the Web site; they're just not trading. They're coming there for advice [about] what kind of planning they should do. Even though the trading frenzy sort of abated, the need to provide a great client experience is [stronger] than ever. We are piloting a variety of fee-based services [in addition to the existing nonbrokerage business].

Robert Seidman, The Charles Schwab Corp.

Robert Seidman, The Charles Schwab Corp.


You're using Yodlee Inc., an application service provider in Redwood City, Calif., for account aggregation services. How will that work? A customer enters a variety of account information, and [Yodlee] goes and scrapes the Web sites they subscribe to, pulls in all the data and aggregates it on the page. [In April, Schwab plans to offer the aggregation services to the 6,000 independent advisers who sell its financial services.] I don't think we have any immediate plans to [offer] something like this with We would never, ever, set something up where we gave someone access to our customers' data.

Understanding customers is an important part of your CRM strategy. How will you do that? By having a good database, being able to collect information from [various applications], filter it and query against that data.

Given today's economy, how are you funding that integration infrastructure? Even in a down market, we're still investing heavily in both technology and integration. It wasn't a fun year, but we're not bankrupt. We still invest in things that are critical to the business.

How personalized is the customer's Web experience? Right now, the site is somewhat personalized and highly customizable. You can select what information you want on certain pages or [change] where it shows up on the page.

What lessons would you offer other companies? We very early on identified CRM as a big initiative for us; we identified clear owners on the business and the technology sides. The ownership part and accountability is important, because you could get yourself fouled up where . . . we could have had a CRM czar for each channel and then have to try to aggregate that. Not [having a separate CRM chief for each channel] was a good thing.

Scheier is a freelance writer in Boylston, Mass. For a list of CRM resources around the Web, head to our Knowledge Center CRM Research Links page.


The Charles Schwab Corp.

Business: World’s largest discount stock brokerage and the No. 1 online trader in the U.S. Traders can access Schwab’s services via telephone, wireless device and the Internet. The firm is No. 260 in the Fortune 500 and No. 16 on Fortune’s list of most-admired companies. Active client accounts: 7.8 million Assets: $846 billion Sales (2001): $4.3 billion Net income (2001): $199 million Employees: 19,600


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