Human Buffer

 
 
By Doug Bartholomew  |  Posted 2007-02-26
 
 
 

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."

Pulling the Plug

Citizens National struggled with the Siebel system for three years before pulling the plug in 2004. Although Siebel was OK for managing the bank's customer call center, according to Singleton, his relationship banking team struggled without success to get any benefit out of the CRM package. "It failed miserably with our relationship bankers," he says. "Our CRM journey was a nightmare. Finally, we shut it down because there was no return on it. It was a $500,000 education for us." Citizens National took a loss on the software, which cost $150,000, and on $350,000 in integration costs.

Although he wasn't familiar with the former Citizens National account, Mark Woollen, vice president for CRM product strategy at Oracle, which acquired Siebel Software, says not all CRM users have the same needs. "Different business processes mandate what users need," he says. "Companies need to decide if they are looking for a toolkit or an application."

Fortunately for Citizens National, Furney, who was committed to making CRM work at the bank, came up with an alternative. While searching on Yahoo for an "online database," The Small Business Solution president found a hosted system from Intuit called QuickBase.

Although not exactly known as a leading player in the CRM market, Intuit, best known for its Quicken financial program for consumers and QuickBooks for small businesses, has been making some inroads into corporate America with QuickBase. An odd mixture of technologies, QuickBase isn't easily described, simply because it doesn't fit into a single neat application category. It combines elements of a database, a spreadsheet and a sales management application, all in one package.

"I call it the ultimate in rapid application development," Furney says, referring to how business people can customize the system to meet their needs on the fly, without calling in an I.T. staffer. "It's kind of a do-it-yourself application," he adds. "I mean, what else would you call it when you've got a bank president doing software development?"

Intuit claims that 43 of the Fortune 100 use it. Still, compared to Siebel and SAP, Intuit's share of the CRM market is so minuscule that it doesn't even rank among the top 20 customer management software firms by revenue, according to a 2006 report from AMR Research.

Maybe that's why Oracle doesn't sound too worried. "We don't really compete against QuickBase," Woollen says. "That's an architecture that provides developers with tools to extend it. An application with years of experience that has been developed based on best practices in CRM is more useful."

One reason some small and medium-size companies, as well as groups within larger ones, are adopting QuickBase is its flexibility. Intended not just for customer management, QuickBase—which is actually more of an easily modified database than a full-fledged business application—can be harnessed for other business tasks. For example, Procter & Gamble uses the system to track technology projects.

Because it's easy to use, runs online via any browser and doesn't require an I.T. professional to set up, the hosted application is finding its way into all kinds of businesses. "Probably what's happening is that departments or workgroups that can't wait for I.T. to create an application are getting a hold of it," Furney speculates.

Affordability, flexibility and ease of use are QuickBase's chief advantages. "A business group can build reports that meet the business users' needs without going to IS," says Intuit product manager Peter Fearey. QuickBase's low cost doesn't hurt, either. According to Fearey, customers pay an initial one-time fee of $249 for the first 10 users, and $3 per additional user per month.

The software, which presents business information in a tabular format with a number of fields, can be used by a business person in either of two modes: forms, in which information, such as a customer name and all the contacts by sales staff with that customer, can be input or read; or views, in which rolling columns—for instance, listing all the sales opportunities for a particular salesperson—are presented containing business information, similar to a spreadsheet.

Sales opportunities, for example, are classified by stage, including: identifying prospects, qualifying them, analyzing a client's needs, preparing a proposal and finally, reporting the result—won, lost or no opportunity. "That way, bank managers can see how many deals are likely to close," Furney points out.

Furney integrated QuickBase with Citizens National's core banking system. New account information such as new customers is uploaded each night from the Intuit-hosted QuickBase system to Citizen's back-end core banking application from Kirchman, using an eXtensible Markup Language interface. For example, a banking representative can click on a commercial customer's file and immediate see all the contacts that have been made with that customer by bank staff, any actions that were taken on the customer's behalf, and the end result. Citizens National bank representatives use it to check on customers to see if there has been a follow-up call to a contact, whether a voice-mail message was left with the customer, who the salesperson was and the status of the contact. "It's been an invaluable tool for us to keep track of our customers," Singleton adds, "because it enables us to track where we lost business, so we know where we need to make those extra 10 or 15 sales calls."

Human Buffer

To make sure his 16 calling officers didn't throw up their hands this time around when they were asked to switch to QuickBase, Singleton cleverly put in a human buffer between them and the technology. His reasoning was that because the officers tend to be old-school bankers, they needed a little extra coddling. "We have some older relationship bankers who don't like technology," he admits. He assigned each loan officer a transcription agent—usually an administrative assistant who picks up the sales contact and activity information and enters it into QuickBase, logging it in as if he or she were that banker. "Our loan officers dictate the information to them," he explains.

Davis of Deloitte says that's not at all unusual with CRM projects. "That's a very common practice," he says. "It may not be the best practice, but for the people doing this, their primary skill is not interfacing with the computer.

"If the extra two hours they save by not putting information into the system are two hours the salesperson is out making the bank an extra $200,000, then it's worth it to have someone else do it," Davis concludes. "You have to remember, we had successful salesmen long before we had sales-force automation systems."

Citizens National Bank Base Case

Headquarters: 200 N. Elm St., Waxahachie, TX 75165
Phone: (972) 938-4300
Business: Independent, full-service community bank providing fi nancial services to businesses and consumers in Ellis County and surrounding counties.
President and Chief Executive Officer: Mark Singleton
Financials: The privately held bank has total assets of $400 million.
Challenge: Apply customer relationship management system to improve tracking of sales leads and follow-up activities for 16 relationship bankers to boost sales and profi tability.

Baseline Goals:

  • Maintain or exceed the bank’s current 12% annual growth rate.
  • Continue to grow the number of branch offices, which was 4 in 1999 and stands at 15 today.
  • Increase market share to 50% or higher in eight counties south of the Dallas-Fort Worth metropolitan area.
  • Boost cross-sales ratio, from an average of 2 to 2.5 bank products and services per customer today toward the 6 to 7 ratio achieved with the bank’s best customers.