Published on 09 July 2010

Andrew Denton is sales and marketing director at CHP Consulting. He told Asset Finance Europe: “It is important to define CRM correctly, if you identify it as being the challenge of retaining your existing customers by looking after them and maintaining contact at various ‘touch points’ during the life of a finance agreement then you are probably on the right track. This is because a lender’s existing customers are their more cost-effective customers.”

“It is good CRM to maintain contact with customers at every conceivable opportunity. A request for a settlement quotation is a good example since it presents the opportunity for a lender to follow up with a new-sales enquiry – and thereby continue the dialogue.”

Analytics to foster closer relations

However regular customer contact alone is not sufficient. Denton argues that correct systems can provide lenders with analytical capabilities that will ascertain the quality of their existing customer base. “It is important to assess which of your customers you wish to retain and obtain greater levels of new business from,” he says. “If your systems allow you to differentiate in this way, then the next step is to run a credit check and virtually pre-credit approve your customers in advance. This serves to increase your customers’ propensity to acquire more assets, analyse your whole portfolio (including your residual value exposure) and build much closer relations with your existing customer base.”

However, Denton believes there is more to CRM than retaining existing customers. He explains: “It is also about relationship building with your introducer base – brokers, finance intermediaries and dealers. In this way it becomes partner-relationship management. Given that direct sales forces have been thinned out in recent years there is inevitably going to be a re-building of alternative source of new business as the economy sees an upturn. Relationships between lenders and brokers go through periodic cyclical changes. The recession was a time to sever many connections with intermediaries – but as demand for new business returns this is very likely to change.”

Attracting new business

Denton forecasts that the rebuilding of relations with intermediaries will lead to systems development allowing broker-introduced business to be more effective and cost efficient. “If a finance intermediary or a customer enjoys a closer relationship with a specific lender then the likelihood is that he will place his new business leads with that lender,” he said. “If a lender is able to provide service levels that include outstanding balance and settlement information, asset management details, end-of-agreement notification and payment patterns, and generally fulfil all the clients’ key performance indicators – all online – then that lender is far likelier to be more successful in attracting new business.”

Denton explains that CHP’s ALFA v5 database is a rich, integrated source of CRM data for all aspects of an asset finance business, from profitability and risk to collections history, process measures and the new business pipeline.

He says: “ALFA v5 extracts and transforms a lender’s data, presenting it in formats that match their requirements and support the latest industry-leading reporting tools. It contains built-in analytical functionality which gives business users the control to ‘slice and dice’ the data in multiple ways, revealing trends in the business and supporting fast, effective decision making. Fixed-format regulatory, financial and operational reports are also available.”

Adding: “Business intelligence in ALFA can function effectively as an analysis tool purely for data held in ALFA, or it can be extended to integrate data from other systems. Similarly, ALFA can be configured to transform ALFA data and deliver it to group business intelligence solutions and data warehouses.”

The above was published online by Asset Finance Europe on 9 July 2010.
Reproduced by permission of the publisher.