A Banker's $500,000 Lesson in CRM

By Doug Bartholomew Print this article Print

Why Citizens National Bank threw out Siebel in favor of Intuit's QuickBase.

There's a saying that less is more, and if anyone can attest to its truth, it's Mark Singleton.

Unfortunately, Singleton, president and CEO of Citizens National Bank, a 200-employee community bank in Waxahachie, Texas, outside Dallas, had to learn the full implications of that adage the hard way. It turned out to be a $500,000 lesson.

When Citizens National first installed a customer relationship management (CRM) package from Siebel Systems (now part of Oracle) in 2001, Singleton had high hopes that it would help boost sales of his privately held community bank. The goal was to enable him and his managers to improve tracking of customer prospects and boost the number of contacts and sales made by the bank's team of 16 sales representatives, or so-called relationship bankers.

"We needed the ability to store the interactions our relationship bankers were having with potential customers electronically," he says.

An old-school, relationship-type banker, Singleton is the fourth generation of his family to run Citizens National since its founding in 1868. With 16 offices, the privately held community bank stays out of the big-bank competition in the metropolitan Dallas area, preferring instead to concentrate on midsize communities of 25,000 down to towns with 500 people. That strategy is working in spades: Citizens National ranks as the sixth fastest-growing bank in Texas, with total assets of about $400 million in 2006.

Although Singleton believes in the power of automation to transform business, he endorses direct customer contacts a whole lot more. The last thing he wanted to do was let some fancy software gum up the connection between his bankers and their customers. That said, one of the goals he had for the CRM system was to arm his relationship bankers with every possible shred of knowledge about each customer and prospect, and any prior dealings they'd had with the bank.

Citizens National enjoys a relatively healthy number of sales per customer at between 2 and 2.5, meaning that each of its 50,000 customers uses, on average, more than two bank products such as a checking account and home loan. In general, the more cross-sales of different products and services per customer, the more profitable the bank. "In retail banking, having a 2 to 2.5 cross-sell ratio is a wonderful target," Singleton points out. The community bank does far better with its best commercial and individual customers, racking up 6 to 7 cross-sales per customer.

Before adopting the Siebel package, Citizens Bank was tracking its customer contact activity the old-fashioned way—on paper. "Every Monday, we'd get a sales report on paper," Singleton says. "My Dad did it that way, too. Every Monday, he expected a sales report on all activity the week before, and listing all the calls each banker was going to make that week."

The problem with the paper setup was that the bank's CEO and branch-office managers found it tedious to plow through all the information. "There was tons of good information in there, but nobody could find it all," Singleton says.

The bank purchased the Siebel package and hired a local firm, The Small Business Solution of Frisco, Texas, which specializes in small-business information-technology projects, to install the software. From the start, Citizens National had trouble getting the software to fit its rather straightforward, basic customer-lead tracking and reporting needs. "With Siebel, we were spending way too much time turning off capabilities that we didn't need," Singleton explains.

An example of functionality that didn't fit Citizens National's business model was Siebel's capability for setting up customer support cases. While some large corporations may want to set up a support case with detailed complaint-tracking and resolution functions, the small bank had no use for it.

Service complaints that come in to Citizens National are handled on the spot by its call center. For service inquiries that require a follow-up, such as a customer asking about the reordering of checks, the call-center representative schedules an activity by sending an e-mail to the employee who handles check orders.

Another issue was Siebel's complexity. Citizens National's bankers found the system difficult to navigate. For instance, the banking representatives couldn't understand why an opportunity to make a loan to a particular customer wasn't listed under the customer's record. "You have to assign that opportunity to that person," explains Doug Furney, president and CEO of The Small Business Solution. "If you don't make those relationships when entering the data, the opportunity won't appear under that customer's record. Not everyone easily grasped this concept."

Furney says the way the screens were laid out in Siebel, Citizens' bankers had to flip back and forth between the various screens to identify different relationships that customers had with the bank. "Understanding these relationships in the system was very confusing to their bankers," he says.

As a result, the bank's top sales representatives, who weren't eager to change the way they did their work to fit the needs of the software, found Siebel's learning curve too steep to negotiate. "Citizens National's 16 relationship bankers never got over the ease-of-use problems that Siebel presented," Furney says.

"The problem with Siebel is that it has everything," says Jim Davis, a principal with Deloitte Consulting in San Francisco and a leader in the consulting firm's CRM practice. "Most people lose the forest for the trees. We help clients figure out what they need and simplify Siebel down to only what they need."

Deloitte's Davis says that the Siebel implementation at Citizens National may have indeed failed because of a lack of buy-in from those expected to use it most—the relationship bankers. "If the people using the system don't know what's in it for them and don't see the value of using it, then it will not work the way the company expected," Davis says.

In Davis' view, successful CRM requires some form of incentive for the sales staff. "Most benefits of CRM accrue to the sales manager, not to the salesmen themselves," he says. "But if the salesmen realize they will not get credit for a sale if it's not in the system, they'll use it. Most sales automation systems ultimately succeed if the sales staff's compensation is based on the results in the system."

Citizens National also had to deal with a raft of customization issues, often stemming from the differences between databases. Furney worked to integrate Siebel with Citizens National's core banking application. The bank uses banking software from Kirchman, whose vertical systems are used by numerous small and medium-size banks to process and track customers' deposits, loans and trust accounts. "Trying to get these two systems to talk was a challenge," he says.

One basic difference was the way the core banking application set up its customer data fields. The Kirchman system did not have individual fields for both the customer's first and last names, choosing instead to include the full name in a single field. By contrast, in Siebel, the customer's first and last name each had a data field. "That's the kind of thing we ran into when we tried to marry data from these two different systems," Furney says. "This kind of integration takes time, and customers don't realize how much time is required."

This article was originally published on 2007-02-26
Doug Bartholomew is a career journalist who has covered information technology for more than 15 years. A former senior editor at IndustryWeek and InformationWeek, his freelance features have appeared in New York magazine and the Los Angeles Times Magazine. He has a B.S. in Journalism from Northwestern University.
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