What Is CRM Anyway?

Darren Tedesco — As defined by Wikipedia, CRM (a.k.a., customer relationship management) is “a widely implemented model for managing a company’s interactions with customers and prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, service and retain those the company already has, entice former clients to return, and reduce the costs of marketing and client service.”

But asking what CRM is really almost borders on the philosophical, and the Wikipedia definition doesn’t truly define what CRM means. In a traditional sense, CRM is often defined as “rolodex and workflow” (e.g., activities, tasks, calendar events). And if we stick to that definition, CRM can stay relatively simple. Yet we do not live in a simple black-and-white world, and the definition of CRM isn’t black and white either.

Where CRM starts and ends should be defined by what information is needed where and when; in other words, data and functionality are where they need to be in the time you’d expect them to be there. A simple example in the financial services industry would be opening accounts for a new client, where an advisor should be able to take the rolodex data from the traditional CRM system and populate that information into the forms that they are reviewing. For an existing client, however, that same advisor should be able to take rolodex information from a traditional CRM system, as well as books and records information (e.g., beneficiary or suitability info) stored on other accounts, to prepopulate those forms.

Below is a list of some information that advisors would want to know about a client when looking at any given client’s record:

• Household contacts and key dates
• Notes (including e-mails) from past interactions
• Account balances, including cash available
• Asset allocation
• Performance
• Beneficiary information
• Holdings, often vs. a model portfolio
• Insurance policy information
• Documents, such as wills or trusts
• Goals
• Who the client was referred by
  
  

This is hardly an all-inclusive list, but it begins to show that workflow and rolodex data simply do not give a financial advisor enough information to manage client relationships. And consolidated information alone is not enough. Advisors need to have that information interact with operations to be as efficient as possible. Similar to the aforementioned account opening example, placing trades, rebalancing accounts, uploading documents, generating cash and money movement, updating books and records in bulk, changing periodic investments/withdrawals, and integrating with third-party financial planning or proposal software are just a few examples of where information and operations cross over and integrate in a financial advisor’s business.