CMAT-R scores of Canadian and US retail banks Canadian banks

The ranking analysis shows that Canadian companies have genuinely worked to differentiate themselves through their propositions. They have invested more in the people and organizational side of CRM and place more emphasis on information and technology. In common with those of their European counterparts who have done this, they are likely to be struggling to achieve acceptable returns from the IT investment. This is because the day-to-day customer management activities (how IT can support the organization in enabling excellence in customer management) and processes are not as well defined (low scores). In Europe, the failure rate of CRM projects is very high. According to the Hewson Consulting Group over 30 to 40 per cent fail to deliver the anticipated benefits (see Chapter 17, Guidelines for successful CRM implementation).

In fact, the day-to-day implementation of customer management is a key area for improvement in most Canadian companies. They appear to have developed the ideas (relatively good scores for analysis and planning and proposition) but are struggling to put them into operation. They appear to have looked to IT to help do this, but have perhaps underestimated the need to develop a more detailed clarity about the role of IT in their organizations and transformation programmes.

According to a recent Forrester ^[2] research study, Canada's consumer banking industry had supported a history of contrived competition until the mid-1990s. However, the past five years have been characterized by the following factors:

• Waning customer loyalty: largely in light of online development.

• Failed mergers: based on the federal government's denial of two proposed bank mergers in early 1998.

• New competitors: particularly those offering online full service banking as well as specialized services.

• Recent legislation: making it easier for foreign entrants and increasing direct access to the Canadian payments system.

As a result, banks have taken, or are projected to take, very different strategies for sales and customer service and for internal processing and technology.