How to Use CRM Software

Every business and industry needs data to grow and succeed. Knowing what data to collect, how to collect it, and what to do with it after collection makes all the difference in a business’s survival.

As a financial advisor, you collect your clients’ data to better understand their needs. By knowing essential datapoints – everything from birthdates to preferred college choices – you can more easily create a robust financial and investment plan that best suits their needs.

Customer relationship management (CRM) software capitalizes on client data. But few firms use CRM software well and to its fullest capabilities. Many firms aren’t harnessing the business analytics and process efficiencies CRMs provide; in many cases, CRMs exist only to serve as advisors’ digital address books.

A financial advisor’s success depends on how well they can anticipate their clients’ needs and manage them with data gathered over time. Firms that leverage CRM software appropriately are positioned to surpass their competition and attract – and retain – ideal clients who value a strong, personal relationship.

Whether you’re looking to dust off your CRM software and learn to better use its features, or you’re looking to make a CRM investment for the first time, here’s what you need to know.

What is CRM, and what does it involve using the software?

When you think of a CRM tool, your mind may automatically think of rows of client names, addresses, email addresses, and phone numbers. But a CRM system – when deployed and used properly – is so much more than that. Your CRM should be your business’ hub for the management of all interactions with your clients. It should integrate all of your clients’ data, making it easy for relevant groups in your firm – everyone from your marketing and operations teams to your business development team – to assess your clients’ needs. This results in a richer and more personalized client experience.

A standard CRM should include the following datapoints:

• Identity data: This provides all the necessary data to personally identify a client, including their name, contact information, and other relevant personal information.
• Descriptive data: Not only does this data help you build a stronger relationship with your clients, but it also gives your business development and marketing teams some insight into your clients’ lives. This data may include your clients’ profession, career, and other lifestyle information, which these teams could use to deliver more tailored marketing and financial education.
• Quantitative data: This information provides insight into how your clients have interacted with your firm, such as the number of times they’ve contacted your business or visited your website. From a business-development perspective, this information is immensely helpful in determining where a prospect is in the pipeline.
• Qualitative data: This information is less about the numbers and is more difficult to quantify. It includes findings from relevant client engagement surveys, including ratings and satisfaction levels, or even clients’ reasons for choosing your firm over a different financial advisory firm.

What factors contribute to a CRM system’s success for financial advisors?

With any technology implementation, it’s important to set realistic and tangible goals to ensure you are making the most out of the tool and ultimately increasing the ROI to your business. A standard CRM system should achieve the following:

• Store data on various clients and prospects at different stages of the engagement lifecycle;
• Categorize this data accordingly and in a way that is conducive to how your firm and advisors do business;
• Cost as little as possible;
• Manage your communication with clients;
• Integrate with other software that helps run your business more efficiently (for instance, marketing automation software to streamline investment communications); and
• Provide an analytics tool so you can track your performance and further improve on it.

These features are necessary for you as a financial advisor for your CRM to improve business insights and grow your brand. After all, having a powerful CRM system is one thing – knowing how to use it and reap its benefits is a whole other ballgame.

The basic actions you should be taking in your CRM to grow your business and ensure your customers are satisfied:

1. Regularly update your CRM system

One of the biggest reasons for poor CRM adoption is that many advisors do not take the time to update it accordingly. In a 2019 article for InvestmentNews, Robert DeFrancis put it perfectly when he said, “Even today, many firms’ CRMs are nothing more than glorified Rolodexes that are used sporadically.” Working with old data that is no longer viable is no better than working with the wrong data. Put a system in place to make regular updates to your clients’ data. Make “update the CRM” an action item on your punch list for client meetings. Divvy up the responsibilities among new advisors and use the exercise as an opportunity to educate them on your clients, their situation, and their backstory. This step is essential to ensuring you and your team have the accurate information to work with for the best possible results.

2. Automate your CRM and dedicate time to proper implementation

Take advantage of the available technology and automate your CRM processes where possible. It will not only improve your efficiency, but it will also save time spent on unnecessary and repetitive functions. Many firms run into the issue of purchasing a CRM software product, but letting it sit there – they claim they don’t have enough time to properly configure the workflows, dashboards, and other functions they need to harness the full power of the tool. In addition, many firms take a narrow view when it comes to making their CRM software decision. For instance, they may not consider how other departments may utilize the system – or they may fail to consider their other technology needs when selecting a product and wind up purchasing a system that has no relevant or viable integrations.

If you decide to invest in or overhaul a CRM system, designate a special team of power users within your firm who will be responsible for creating the implementation roadmap, assigning roles and responsibilities, and working to ensure that the system is optimized to add value to your firm. Otherwise, you’ll wind up with a tool that just sits there, collects dust, and wastes you time and money.

3. Create performance analytics

A good CRM shouldn’t solely create efficiencies and streamline your processes; it should also provide you with analysis about your weak points and illuminate gaps. The right CRM should include dashboards that provide you with big-picture insights (like firm revenue and profitability), as well as the necessary information to track your work at a glance. To further maximize the analytics capabilities a CRM can provide, many firms are starting to hire CRM experts to help facilitate proper usage of the system. Whether you outsource the task or opt to do it yourself, make sure you are tracking the right analytics and using them to make improvements to your strategy, operations, and growth plans.

4. Select a CRM that integrates seamlessly with other business software

I alluded to this above, but it bears repeating – make sure that you’re working with a CRM system that can integrate with other key software. For instance, integrating your CRM with your portfolio management software effectively combines a client’s general information and their financial records to provide more insightful reports (many CRM systems available to advisors actually have both of these capabilities integrated). The integration factor is another reason why it’s important to include all departments across your firm in the decision-making process. As an example, your marketing team is likely in charge of creating communications for your clients, and they may use an email marketing system or marketing automation software to handle the distribution step. Many CRM systems integrate with these types of tools to streamline the distribution process and provide transparent reports about clients’ engagement with communications. By integrating your technology systems, you can access a whole new world of opportunities and areas where you can better serve your clients’ interests and needs.

5. Streamline your data organization

Yes, CRM is a type of tool for organizing your clients’ data. But it’s not going to organize itself – you need to put in the work. Ask your team of power users to come up with a naming convention system for inputting client data. Set standards for required fields (for instance, don’t add an entry to the CRM without a first name, last name, home address, email address, and phone number). Count your zeros, add your commas, and pay attention to detail. Failure to organize properly will result in concomitant failure of the system, leading to misinformation and more cleanup down the road.

6. Provide training for your staff

This may be the biggest and most common pitfall of all – investing in a CRM system that no one knows how to use. Ensure you devote the proper time and effort to train your staff on how to use all of the features and functionality your software has to offer. If you don’t have a staff or you’re working on the CRM system by yourself, the principle still applies.

A CRM system helps financial advisors do so much more – but most importantly, it makes their lives and their businesses easier to manage. To grow your business, maximize your CRM to its full potential, from the implementation to the actual usage. Then sit back and watch the magic of technology unfold.