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Why does a financial institution need
to manage leads ?

Effective lead management is crucial for the growth and success of any business, including small banks. Without a way to manage leads, the bank may miss out on potential customers and fail to convert interested individuals into account holders and in some cases business from account holders.

In addition to impacting growth, poor lead management can also negatively affect the bank’s reputation. If customers feel ignored or neglected when they express interest in the bank’s products or services, they may choose to take their business elsewhere.

By implementing a lead management system, the bank can better track and prioritize leads, ensuring that potential customers receive prompt and personalized attention. This can help the bank convert more leads into customers, and ultimately increase revenue and grow the organization. It can help ensure that leads don’t fall through the cracks, and that customers receive timely and personalized follow-up.

What factors should a bank consider for finalising a CRM tool, more so for a first time buyer of such a tool ?

Here are some points which they can use to check and finalise a an effective lead management system:

Should help in defining the lead process: The bank should identify the different types of leads it receives, and establish a clear process for managing them. This might involve assigning leads to specific staff members or teams, establishing deadlines for follow-up, and setting up a system for tracking progress.
Should meet the need and budget: There are many software options available for lead management, ranging from simple spreadsheets to more sophisticated CRM systems. The bank should choose a software that meets its needs and budget, and that can be easily managed without hiring too many hardware or software management people.
Minimal software customisation to get started: Once the software has been chosen, the bank should be able to go live in less than a week’s time. So ideally a solution where some configuration will be good enough to start operation is what can be preferred to save on time, effort and cost of customising a software.
Monitor and analyze performance: The bank should be able to regularly monitor the key performance indicators (KPIs) such as lead conversion rates and the branches which are performing better or the special offers which have given better results. Special offers during festival or during college admissions etc can be tracked for actual benefit.
Capturing and organizing lead information: One should be able to gather information from multiple sources, such as web forms, emails, and social media, and organize it in a central place for better management. This can help banks to quickly identify and respond to new leads. This will also help them understand their main sources of leads and that can then help them take some proactive steps to improve them even further.
Scoring to know quality of the leads: Automated lead scoring tools can evaluate leads based on factors such as demographics, behaviour, area of residence, place of work ( government job/ PSU or Private or self employed) and give a score to each and every potential customer and help speed up the process and prioritize them based on their likelihood to convert into customers. One should have option to define these parameters based on the existing system followed by the bank.
Scheduling follow-up tasks: Lead management tools can schedule tasks and reminders for staff to follow up with leads at appropriate times, ensuring that no leads are forgotten or neglected.
Personalizing communication: One should be able to refer to the existing or previous discussions with the customers and do personalized communication and provide relevant information and offers to customers. This should happen even if there is a change of staff.

Overall, automation can help small banks to improve their lead management process and reduce the loss of potential customers. By leveraging the power of technology, small banks can increase efficiency, reduce costs, and provide a better customer experience.

By implementing a lead management system, the bank can increase the likelihood of converting potential leads into customers, and reduce the risk of leads falling through the cracks. Additionally, the bank can improve its customer service by providing timely and personalized follow-up to customer requests.

Do we need to try the software before we buy it ? More so for the first time CRM tool buyers.

The bank should get an option to try the software for a month or two in three to four branches to check the effectiveness for their bank. This will help the bank to learn the solution and will also give some time to the staff to get familiar with the solution without really spending any money.

However a word of caution here. You need a core team to help people in the bank use the product as there is a general tendency in the masses to not try anything new even though it is good for the bank and will be good for the employees too. Accepting change is a slow process hence the trial should be done in only those branches where people have volunteered and are interested in evaluating any new thing.

Why small banks do not buy a CRM tool to manage leads?

There could be several reasons why many small banks do not buy a Customer Relationship Management (CRM) tool to manage leads. Here are some possible reasons:

Cost: One of the primary reasons could be the cost associated with purchasing a CRM tool. CRM software can be expensive, and small banks may not have the budget to invest in such tools. The CRM tools which are more visible in the market are usually the more expensive one’s as they spend money in marketing and they need to recover that.
Lack of awareness: Small banks may not be aware of the benefits of using a CRM tool to manage leads. They may not understand how a CRM tool can help them improve their lead management process and increase their customer base leading to better growth. It is also possible that many banks may not get a suitable technology partner to help them adapt the new technology. In the initial phase they will need more handholding and the technology partner should be willing to extend that help.
Limited resources: Small banks may have limited resources, including personnel, technology, and time. They may not have the staff or expertise to implement and maintain a CRM tool effectively. They may need to buy a server and people to manage the Server. They will need skilled software people to configure the software and do some customisation, as is expected by most CRM tools.
Existing systems: Small banks may already have an existing system for managing leads, such as spreadsheets or a word processing system. They may not see the need to invest in a new system as they may find it difficult to justify the need of modernisation.
Resistance to change: Finally, small banks may be resistant to change and may prefer to stick to their existing processes, even if those processes are inefficient and are not really helping them grow.

While there may be several reasons why small banks may not buy a CRM tool to manage leads, it’s important to note that effective lead management is critical for business growth. The challenge is that many a time the organization concerned gets so used to their current style of working that they may not feel the need of a tool.

Kindly note that as per a study organizations can lose upto 70% of their leads in the internal process, if not managed properly.

Lead Management in Finance

The Small and Mid Size Banks and Insurance companies who do not have a CRM software to manage business leads can use a spreadsheet for managing the leads. This is not the most effective way of building a pipeline of potential customers however this is better than not having anything at all.

One needs to capture potential customer information which the Bank can get from various sources. This will help them know the most effective way of generating pipeline for themselves compared to what they have read somewhere or what someone has told them.

Most known CRM tools can be quite expensive and will need months of preparation before it gets deployed. This happens because most CRM products are meant for generic usage which can be customised for specific needs.

This process takes time and needs expertise. It is rare to get a standard CRM tool which Small and Mid Size Banks and financial institutes can start using from day one.

If the leads are managed using some low cost basic CRM also, they will be able to see the direct impact on growth of business. The only rule is pick a CRM which is specifically designed for the BFSI segment.

The improvement can be upto 70% compared to when they had no such specific tool. Even with a spreadsheet, you can manage but you will have lots of leakage of data, as a spreadsheet is not designed to help you manage customer leads.

Keeping in mind that you are a cooperative Bank or a NBFC of Mid size or a medium size bank where customer walk in will be limited, you need to ensure that anyone who talks to you for loan actually becomes your customer.

You also need to ensure that you do not violate the basic compliance rules as the penalty for violations is high. Similarly the cost of getting a wrong customer also can be very high. So you need a way to check and ensure that those who are blacklisted are not chased by your sales team.

I have also noticed that many small and medium size Banks do not have a good sales team. They completely depend on some advertisement and word of mouth. This may not be the most effective way of promoting your offerings.

The big issue is leakage of valid leads from the pipeline. So you need a system to ensure that you are able to track all those customers who have once entered your system and you have a way to follow up with them.

The second big issue is that with the change of the sales person, the information of the potential customer also vanishes. Hence you need a system and process to ensure that even if people keep changing from the side of the Bank, the information about the customer, the discussions done so far and the progress made in the process is not lost.

What you need is a low cost CRM. The CRM should help you deal with all kinds of leads. It should also help you know the best source of getting leads. Not assumptions but actual data. This should help the Bank in increasing valid pipeline rapidly with minimum loss of data.

The bank needs to run marketing campaigns to attract potential customers. The campaigns can be of different types and they can be run in different cities during different time periods. Someone needs to think and plan all this in advance if possible.

Once you have decided the campaign, train your people, check your systems and launch the campaign. So in festival time you can offer special discounts based on tie up with third party vendors.

You can have special interest rates for a limited period or you can offer gold coins for a limited time period for incentivising the customers to go for specific deals which will in the end help the bank to grow the business.

What you need to do along with this is track the process and the outcome. Then compare the various campaigns which you have run over a period of time and look at the output you got from these campaigns.

With the help of these results the bank can decide on the campaigns which they need to run next time and maybe what changes or improvisations they need to do to make it more effective.

This is also the time when they should focus on lead referrals. This is done with the help of existing customers, business partners for a specific scheme of the Bank or even Bank Employees themselves acting as referral agents in some cases.

The aim is to increase the funnel and help increase business for the bank.

Capturing of lead referrals help in easily calculating the incentives for respective stakeholders and motivating them to contribute more.

Converting a potential customer to a customer takes time and effort. In that process multiple discussions happen. Many a time the customer opts for some other bank in that process as they think that they are not of any value to the bank whom they have approached, this is when the bank may be desperate for new business.

One common reason for delay in conversion is that many Banks do not have a system of capturing the gist of the discussion which can be referred to during the next meeting or before even trying to call up the potential customer.

This information if stored properly helps the Banks sales people to get better prepared and leads to faster conversion.

A low-cost CRM should be able to help in this activity.

You need customers who will give you big value business and that really helps the bank, however you also need some small value customers who have the potential to grow over a period of time.

You need a bigger base of customers, hence you need to have a way of storing customer information which can be then referred for the next course of action. You need different approach for completely new customers and a different approach for large ticket existing customers.

In both cases the compliance requirement should be same. A simple software product which will force the Bank to follow these rules will ensure minimal hassles later.

This means that as a Bank you need a way to check if your sales team is talking to the eligible customers only and not talking to someone who is blacklisted. Hence there has to be some way of tracking this in the system so that once you check the blacklist database, you can put the understanding or learning from that in your CRM.

You can do that through integration or through simple Alt Tab approach. Not all banks like to have integration of all tools as that means bigger exposure and bigger risk.

You do not have to go for fancy systems always. Go for a system which will help your people do the job without compromising on the security aspect.

Finally have a system to manage the different stages of the sales cycle in which you have different customers. This will help you know your customer base reactions much better. You will know what potentially you can do to drive more business.

Maybe the bank needs to work on lead progression rather than only lead generation. These learnings will come based on the data which the CRM will have.

Community

Community

Why does a financial institution need to manage leads ?

What factors should a bank consider for finalising a CRM tool, more so for a first time buyer of such a tool ?

Do we need to try the software before we buy it ? More so for the first time CRM tool buyers.

Why small banks do not buy a CRM tool to manage leads?

Lead Management in Finance

The aim is to increase the funnel and help increase business for the bank.

A low-cost CRM should be able to help in this activity.

Why does a financial institution need
to manage leads ?