By Lisa Yorgey Lester
How Morgan Stanley is shifting from a product-centric to a client-centric organization.
Its directive was clear: to become a premier client-centric organization. Following the publication of its 2000 annual report, in which Chairman and CEO Philip J. Purcell issued this proclamation, Morgan Stanley embarked on a journey that would transform the way the financial services firm does business.
Today, customers have choices. In the financial services industry, in particular, products and services are quickly copied, undifferentiated and unable to maintain a significant and sustainable competitive advantage. Survival hinges on an organization's ability to compete based either on price or superior customer intelligence.
Morgan Stanley chose the latter.
The Reality of Being Customer-centric
Morgan Stanley serves 2.7 million households through its 500 branches. Prospecting in the past largely had been done at the financial advisor level through referrals, cold calls and mailings to rented lists. The goal of becoming a client-centric organization was to make customer acquisition and retention a more analytical and measurable process that would be consistent across all financial advisors.
Recognizing that no organization can be all things to all clients, Morgan Stanley wanted to arm its financial advisors with information they could use to pursue the types of clients the organization wants, and not waste time chasing clients it doesn't want and who would be better served elsewhere. To grow its business, Morgan Stanley needed to acquire more targeted clients that fit with its offerings; increase its share of wallet with its existing customers; and retain its most valuable and profitable customers.
To be a world-class marketing organization you need to build a world-class information infrastructure. As part of this initiative, Morgan Stanley hired in May 2001, Tony LoFrumento, a CRM expert who'd spent the last 15 years in retail banking. As executive director of CRM, LoFrumento's assignment was to implement a CRM infrastructure and environment to support the Individual Investor Group and Morgan Stanley Investment Management Divisions.