By Spenser Segal
For many advisers, choosing a specific CRM technology can be a challenge. There are hundreds of CRM systems, and more than a dozen are focused specifically on financial planning practices. So where do you start?
While it can be tempting to choose a CRM system based on the cost and list of features, you need to take a step back and consider your practice from a broader business perspective. Here are seven essential questions for you to answer to make sure your CRM investment gives you a great return.
1) What are your business objectives? Software that allows you to easily create professional e-mail templates can be exciting, but it doesn't do you any good if it doesn't help you achieve your objectives. List your business objectives and make sure they are clear and measurable. For example, one of your business objectives could be to increase retention of current clients by 5 percent over the next three years.
2) What processes will the CRM impact? Even before you decide to buy the software, consider your current customer relationship strategies and processes. How do you currently handle contact information? What is your process for preparing for client meetings? How do you communicate with your clients throughout the year? Understanding what could be impacted can help you identify areas you want to adjust, change or keep intact once the software is installed.
3) What are the anticipated gains from implementing CRM? Clearly identify what it is you expect your CRM to ultimately give you. Is it scalability to help you serve more clients, or efficiency in daily tasks so you can spend more time prospecting to increase revenue? These gains should relate to achieving your overall business objectives, but should also be very specific and relate directly to your anticipated use of CRM.
4) What features and functions are most critical to achieving your objectives? Once you have answered the questions above, you can use that collective information to help identify the functions you need in a CRM system. Here's a hypothetical example:
Business objective: Increase client base by 10 percent with a corresponding 10 percent increase in revenue in the next three years.
Processes impacted: Lead conversion process, which includes looking up pertinent client information before contacting the client (currently a long, manual process).
Anticipated gains: Time-savings to free up more time for prospecting.
Function needed: The ability to quickly look up pertinent client information, including updated portfolio information, goals, net worth, etc. Track the stage each prospect is in.
By using this information you can outline exactly what you need the software to accomplish to achieve your objectives.
5) What incentives and measurements exist to support the adoption of CRM? Before you purchase and install a CRM system, you need to consider how you will motivate your staff to use the software. If it takes your assistant an extra 20 minutes to input complete client information into the software, he or she will need to understand how this extra work benefits the entire practice in the long run. It may also be appropriate to award him or her in some way for taking on additional work.
6) Who will be responsible for evaluating and improving your business processes? It is important to know if you are actually getting the value you want and need from your software purchase. To that end, identify who will evaluate the software and any gains (or losses) you have received from using the software on an ongoing basis. This individual can also be tasked with identifying new ways to improve your process that can save you time and money.
7) Which CRM is the best fit? Now that you know what you need the CRM software to do for you and how you are going to ensure return on your investment, you can evaluate the various CRM options available in light of how the software will improve your business.
While going through all of these questions may seem like a daunting task, you will ultimately be better equipped to choose and use a software system that will help you take your practice to the next level.
Spenser Segal is the chief executive officer of ActiFiTM, a software and solutions company focused on delivering scalable practice management programs to the financial services industry. He also serves on the FPA Business Solutions 2010 task force. ActiFi and TD AMERITRADE are not affiliated and are not responsible for one another's products, policies or services.
FPA members will receive a research report that can help you evaluate the CRM software available to you, sponsored by TD AMERITRADE. Look for it in February!