Financial Adviser - CRM
15th Nov 2003

It's good to talk

The technology to help IFAs develop closer contact with customers is finally available at the right price, as investment and pensions software specialist Dunstan Thomas reveals.

Just two years ago Customer Relationship Management or CRM became a dirty phrase in IT circles as many large-scale, high cost CRM implementations hit the rocks and many rounded on the major enterprise CRM vendors like Siebel for selling expensive software that failed to deliver Return on Investment.

But in reality for the bulk of the business market – the Small to Medium Sized Enterprises (SMEs) the category that nearly all IFAs are part of - CRM has never really lost its shine. After all, nearly all successful IFAs are ‘customer-centric’. They strive to anticipate customer needs, and then to source or develop products or services and then deliver them to meet defined needs.

Ten years ago when the term CRM did not exist these solutions were mainly called contact management systems. In the mid 90s they became known under the banner of sales force automation (SFA). The picture grew more complicated as database management became business intelligence & analytics and document management became (enterprise) content management. Then there was the development of campaign management solutions which themselves became enterprise marketing automation solutions. All these types of solutions have been considered as part of the broad church that is CRM. These flavours of CRM as I like to call them, require brief explanation as IFAs may be come across them if they are considering a CRM solution provider to help them interact with their customers more successfully.

Contact Management or Sales force automation: In the simplest terms this is a system designed to help diarise key dates when sales teams need to make contact with their clients. Think Microsoft Outlook Calendar with messages travelling from a customer database into relevant advisers’ PCs so that they can increase their productivity.

Business Intelligence & Analytics: There are many software providers in this space and essentially it is about an ability to query, analyse and extract valuable ‘intelligence’ from your customer database. Think about the benefit of being able to use a computer to access all your customers that are thirty years old at their next birthday and use this list as the basis of a sales campaign.

Document management or content management: Is about bringing together data from disparate places often called data silos or ‘data marts’ into one single data repository or ‘data warehouse’ for the purposes of gathering a ‘single view’ of the customer. This is currently a major issue for banks and life assurors who may have sold multiple products to individuals over the years but often have no centralised knowledge hat they have done so because the information has not been connected up and linked to the customer but only associated with specific sets of products and policy numbers – term assurance, buildings and contents cover, mortgage, current account etc. By bringing this information together it is possible to ascertain who are the provider’s most valuable customers and focus on retaining these, while including others in a campaign to sell a complimentary product which they have not already bought through that provider. It tends not be a big issue for IFA firms that will normally have a central database for all customer data.

Campaign management or marketing automation: Is the ability to take this intelligence and use the marketing automation package to execute a targeted mail shot or email communication for example.

So CRM solutions collectively offer the ability to record, share, analyse, automate and simplify all tasks required to manage customer communications whether by phone, fax, email or the website. And CRM has become even more valuable now that it is possible to communicate more cost effectively via email. Providing you know who you are targeting and have their permission to be contacted, direct marketing has now become cost effective for many more small businesses, than was the case in the paper-based world.

CRM is all very well but what’s in it for me I hear you say? My argument is that there is a great deal to be gained from sensible deployment of CRM packages, not least of which is retaining those all important customers for longer in a world in which customer promiscuity across the financial services world is growing at epidemic proportions.

And financial advisers generally have faced some criticism for focusing on making the next new business sale which will provide the next piece of commission-based income and then disappearing. Good IFAs have however always recognised the value of keeping in touch with customers and prospects. Good contact management systems enable a database to include prompts to be linked to desktop applications such as Microsoft Outlook which will remind IFAs who they need to call that week and why. These contacts preserve and deepen the relationship with each customer, which in turn should provide stability to the customer-base and generate a steady income stream of repeat business.

But how can it help me on a day-to-day basis when I am processing new business applications for example? If a new business application is in the process of being approved the CRM system can be set up to remind the relevant IFA of the need for a phone call to be made to a specific provider if a response to that customer’s application is overdue. In short the technology can help the IFA to anticipate the customer’s requests and provide the sort of service that truly differentiates him from the next adviser - more than justifying the fees or commission that he will be so transparently earning from any sale once ‘menu card’-style commission disclosure is rolled out in 2004.

And now that IFAs are doing more business electronically software providers like Dunstan Thomas have focused on developing tailored ‘next generation’ CRM solutions which put multi channel adviser-to-customer communications at their heart.

Advisers know that much of the communication he or she will have with a customer will be while sourcing a product and processing an application; during regular anniversary-type reviews; or during an ad hoc review following a change of circumstances which demands financial changes.

Having access to all the documentation at these times is the ideal which is rarely achievable. But what if the IFA could go to a provider extranet to find out what stage his term assurance application has reached while on the phone to that customer? Better still what if that same IFA could offer a hyperlink to the relevant provider extranet via an email to the customer so that he can view the process himself, freeing up the IFA to get on and make that next review call?

A constant challenge for IFAs is persuading customers to increase contributions at annual review stage. What if two months prior to a customer’s annual review the IFA is able to send an email with a link to his website which in turn offers a simple ‘shortfall analysis’ tool which helps the customer calculate that if he wants a reasonable retirement income of say 60 per cent of his estimated final salary, he needs to increase his monthly contributions next year by £150? This sort of email campaign, which can also be supported by CRM (strictly contact management and campaign management/marketing automation) software, would be a great precursor to a review call.

These are just some of the applications for CRM solutions which, if taken together, illustrate that all technology providers that label themselves ‘CRM specialists’ should not be immediately dismissed. Find out what their real area of expertise is and whether they are able to understand your business requirements rapidly. You may well come across the one piece of the CRM jigsaw that you really need to boost your productivity in the coming year.