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Key Considerations for Advisors Considering CRM Technology

For financial advisory firms, implementing customer relationship management technology can be a high stakes and dicey undertaking.

On one hand, the technology can help advisors deepen relationships with clients by cross selling and by targeting sales pitches to clients’ specific needs. In some instances, CRM can even help advisors retain clients by helping to monitor their activities and respond effectively when issues arise.

Yet implementing CRM programs isn’t easy, especially for full-service financial advisory firms that also provide mortgages, insurance products, group retirement services, and corporate cash management. In such instances, CRM technology must communicate with a variety of systems and product areas while tying together different client communication channels, including email, online activity, telephone calls, and in-person meetings.

To further complicate matters, CRM technology must include data from firms’ partners, such as fulfilment vendors. From a broader perspective, CRM can only work if advisors embrace it and are diligent with data entry.

With that in mind, CRM programs can frequently require firms to revamp their sales culture.

Consider the following: Financial advisors are often highly gregarious. They prefer to mingle and entertain clients and can view time spent conducting data entry as time that could be better spent meeting face-to-face with prospects and customers.Many advisors also guard their client relationships with a jealous zeal. Requiring advisors to share client data, therefore, can often be a challenging initiative.

Some advisors may fear that other sales professionals from other departments, such as mortgages or insurance, may poach their clients or provide poor quality services when cross selling, thereby jeopardizing existing customer relationships.

In many cases when CRM systems fail, firms neglect to get buy-in from their advisors. Rather, company leaders may focus on their own priorities when identifying required CRM capabilities. Corporate executives, for example, may want CRM technology that helps to monitor if advisors are focusing their distribution efforts on products that have been identified as priorities or are participating in specific marketing campaigns.

In a related manner, executives may want to track the number of meetings advisors complete and assess costs associated with traveling, attending industry conferences, entertaining clients, and holding seminars for generating leads. In the process, executives may fail to ensure that a proposed CRM system will adequately link to other technology and provide features that sales reps will need.

With that in mind, the initial planning of a CRM program should start with input from financial advisors. They should be asked to identify CRM capabilities that will make it easier for them to do their jobs. This could include capabilities that make it easier to develop sales profiles of prospects. Such profiles can then be used by advisors to cater their marketing efforts and product pitches to meet the specific needs of individual clients.

As part of getting buy-in from advisors, executives should illustrate how the new technology and the time required for entering data can make distribution efforts more efficient. In doing so, firms may want to have vendors that conduct sales training provide success stories that illustrate how other companies have used CRM technology to improve their marketing efforts and win large mandates.

In a similar manner, firms should structure their compensation so that advisors have an incentive to update CRM databases with client information. This strategy could include assessing the quality of data that advisors add to CRM programs.

In a related manner, advisors should have incentives to encourage cross selling. One obvious approach is to provide commissions when an advisor helps another department cross sell products. Yet, firms should go a step further by ensuring that advisors work closely with other product areas to ensure that high-quality services are being delivered. That way, advisors will be less likely to worry about other departments jeopardizing relationships by delivering inferior services.

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