What is this thing called CRM? (Marketing News).

It's more than data mining, says Diane Gerstner. True customer relationship management involves "the totality of how financial institutions approach their business and interactions with customers." Gerstner, who is national assistant director of sales solutions for Alex Sheshunoff Management Services, LP, Austin, Texas, says a true CRM strategy can be broken down into a series of incremental steps:

* Individualization. Every bank is different, and your strategy should take into account where you are in the process. First, you should conduct an initial review to determine where you stand with regard to market opportunities, organization and business processes, technology, and human resources.

* Technology. "Technology is not the sum total of a CRM strategy," Gerstner says, "but it is a core component." Your operating system must be capable of supporting new product structures and fee arrangements, and your telecommunications structure must be flexible enough to handle a variety of touch-points, "including electronic and telephone communications."

* Sales. Your managers at every level, from the executive office to the front line, need to know how to manage, track and motivate sales. Gerstner says the most effective programs include training, on-the-job behavior modification, new techniques and procedures, and self-evaluation. Customer-contact employees need to know how to Listen, probe customers for their needs, handle objections and complaints, cross-sell, and make referrals.

* Products and prices. Your product structure should be designed to court high-value customers, increase your non-interest income and reflect the true cost of providing financial services. One way to reach that goal is through a product audit, using tools such as product benchmarking, price analysis, delivery-channel evaluation, market penetration analysis and profitability measurement.

* Branch performance. This is where your CRM strategy must prove itself. But each branch is different, with different market potential and financial performance. Through transactional and competitive mapping methodologies, you can get a sense of how each branch's customers prefer to do business and how to improve your delivery channels in order to meet their wishes.

CRM, Gerstner says, should be understood as a "holistic concept that involves multiple, interlocking disciplines."