The Scenario
With the increased volume of client calls and concerns to address, an advisory firm’s staff is getting worn out trying to fit more hours into their days.  The advisor appreciates the extra effort everyone is making, but putting more hours than usual into the same clients isn’t going to be a viable long-term solution.  They need to work smarter, not harder. The team knows their CRM system is capable of much more than they’re currently using it for, and that a few changes could simplify many tasks, but if they didn’t have the time before to sit down and figure it out, they sure don’t now.

Process Definition in Action
We recently went into an advisory firm who wanted to gain efficiency and consistency in their client service by embedding their processes on their CRM system.   Since step one is defining their client service processes, we decided to conduct a little exercise.  We gave everyone a sheet of paper and a pen, and asked them to write the words, "Defined Process," along with their definitions of the words.

Then we asked them to select a client-facing process that they all could agree was pretty well-defined.  After some back-and-forth discussion, the group selected Client Onboarding.

We asked them to describe at a high level what that process consisted of, and then draw a picture of the steps involved.  When they looked at each other's drawings and saw how many different perspectives there were, they realized that they really were working from different understandings of both their clients' experience and each other's roles in the process.  Even their definitions of the words, "Defined" and "Process," though similar, were different enough that the team realized they were approaching the concept from many different angles.  At this point, it was clear to all that their next step was to agree on a shared mental model of the defined Client Onboarding process, and more importantly, to draw the picture that tied it all together.

In our interactive, hands-on Process Workshop exercise, we put different-colored paper shapes representing various tasks and activities up on the wall.  People got up and moved them around, adding and renaming pieces as needed.

Then, with guidance from ActiFi consultants, the team organized their tasks and activities into various levels of detail, defining triggers, timeframes and dependencies.  This is the part where it gets fun.

There was a lot of debate as to which steps in the process should actually be considered a task, as opposed to an explanation clarifying a task, or maybe even a whole new process of its own.  How do you actually break down tasks to the appropriate level of granularity?  How do you get visionaries and bean-counters to agree on what level of detail is really needed?

The debate continued until all were satisfied that we had a well-rounded and thorough representation of everything that happened when a new client signed on with the firm.  Then this initial definition was followed by a series of iterations and validations, as we took what we gathered on these pieces of colored paper and turned it into a diagram representing the process.  Now that there was actually a shared picture, we were able to break down each step into the kind of detail that allowed us to translate the process into a set of implementable software requirements ready for encoding into the firm's CRM system.

Finding a Healthy Balance
When it comes to process definition, we've seen some extremes. 

On one end of the spectrum, a firm can become obsessed with process for process’ sake, and forget why they got a Customer Relationship Management system in the first place – to enable them to better serve their customers!  Defining client service processes requires thorough thinking, but there’s a difference between thorough and obsessive.  When every single item your staff can possibly think of becomes a task, so people practically have to check a checkbox to show that they checked the checkbox, triggering an email alert for their supervisor to approve that it got checked (okay, not really, but you get the idea)…you have nothing more than systematized micro-management!  Employees' inboxes and task lists become overflowing with both time-sensitive and redundant tasks and alerts, so it's hard to tell which is which, and even the most efficient and industrious of them eventually give up and go back to their old faithful post-it note systems.  Not only did the rollout fail, but future attempts to revive it are likely to be met with skepticism, making it difficult to gain a return on your CRM investment.

On the other extreme, a firm can take such a high-level approach that no additional efficiency or visibility is even created.  Activity and data is recorded inconsistently at best, because a) only some of the staff even use it, b) of those, everyone does it differently, and c) there are no specific reports being generated to show where gaps are occurring.  When employees’ task lists are full of general activities like “get referrals” and “prepare forms,” they have no way of knowing which ones to start with, or when they’re done.  Ask whom for referrals?  Prepare which forms, for what purpose?  Employees get used to overlooking the tasks that can’t really ever be checked off as completed, learn to ignore CRM reminders and revert to their own systems, and again, the CRM workflow is all but ignored.

What's the Answer?
As with everything worthwhile, there’s not one easy answer that will work for every unique combination of skills and personalities in every firm.  However, an answer can be found that works for you if you know what you’re looking for – a healthy balance of guidelines, accountability, and time-saving shortcuts that enable you and your team to accomplish your business objectives according to your shared values and principles.  If you haven’t yet defined these, it’s a good place to start.  Evaluating decisions through a shared mental model or "grid" helps eliminate personal agendas and subjectivity and enable a factual, objective view into your processes as they really are, allowing you to see how well-lined-up your theory is with your practice.  This will give you a clearer view of your strengths and differentiators, as well as where your gaps and bottlenecks are.  Then you can determine which changes could make the most substantial differences in both your employees' and clients' experience.

With the end goal always in mind, the question of "What are we really trying to accomplish here?" should help alleviate differences of opinion on how much detail is needed.  If you're trying to create a self-contained interactive user manual that any new employee in any position can follow with little or no instruction from other busy staff members, you'll need to agree on (and budget for) a deeper level of definition than the firm that "just" wants to make sure each client meeting is prepared for, presented, and followed up in the same way, by every advisor, every time.  Unless you're a sole proprietor (and sometimes even then), you know this is no small feat either!

Many advisors and other businesspeople talk about their CRM software so often that they have stopped thinking about what it stands for, namely Customer Relationship Management.  But if you set aside the software context for a moment, that phrase looks far more like a business strategy than a technology. So what is CRM, really?

It’s a Business Strategy

A key limitation of technology is that it is only as good as the business improvement it drives and the readiness of team members to use it effectively. For an example, look no further than a motorist who paid extra for four-wheel drive in their car without ever using that feature or even knowing its purpose. The point of CRM is not to have advanced technology capabilities for their own sake but instead to deliver a client relationship experience consistently and profitably.

As a business strategy, CRM is about systematically embedding best practices and powerful ideas into the way that a firm does business, so that a consistent high-quality experience is delivered to every client, every time.  A CRM strategy is working if the principal can take a six-month safari in Borneo, and a junior advisor can fill in capably for her while she’s gone. In order to make this happen, that junior advisor would need to have access to the knowledge and thought process that the principal goes through, in all types of settings.

The first step in developing a CRM strategy is to define a client experience that works and is right for your clients and your firm.  Remember that “client experience” is shorthand for a wide variety of cases, e.g.:

• A meeting with an ultra-high net worth individual involves very different preparation than one with a middle-class retiree.
• Establishing a relationship with a family of five will require one type of client acquisition process (meetings, marketing materials, communications, and so forth); doing so with a small business investment committee will require another type of process altogether.

The second step is to decide how to deliver that experience.  This starts with being able to define the experience at a level of precision and detail that makes it executable.  Many advisors believe they already have a defined process. Suppose, however, it was a new employee’s first day on the job: Would the new hire be able to successfully follow the process – e.g., deliver the exact results that the advisor expects – independently and with minimal supervision? To make sure this happens, you will need to document answers to more specific questions. For example: Which roles carry out which tasks? How are team members to communicate with each other and with the client on each task?

The third step is to determine how to execute on the client experience scalably and profitably. This is where technology inevitably enters the picture.

Yes, It’s Also a Technology

One of the biggest mistakes we see made by advisors in selecting CRM systems is what we call the “check the box” mentality: when evaluating CRMs, create a matrix that details which products have which features, and then choose whichever system has the most features. This is a flawed strategy, as it represents the same logic used by the car buyer who buys the unnecessary four-wheel drive.

A more sensible approach is to consider your unique client experience, then determine those CRM software features that you need in order to deliver that experience in a systematic way. For example, if you have a large staff that requires close coordination, then robust workflow and notification features are a must. Once you have identified the features you will really use, then you can do a more focused cost-benefit analysis.

The key is how well the CRM technology enables the business benefits that you defined as part of the strategy, not how many bells and whistles it has.  Therefore, each firm will weight various capabilities of a specific technology differently, and those priority weightings will drive the right decision.

What are the benefits?

The specific benefits of CRM (both as business strategy and as technology) will depend in large part on what your client experience is. But some benefits are universal to a well-executed CRM strategy:

• An increase in the value of your business.  A systematized business commands a higher multiple for valuation purposes.
• An enhanced client experience. Your practice will be able to deliver more value for the client’s dollar.
• Greater efficiency and productivity. You and your staff will be able to deliver more value per hour of work, and have more time to spend with clients and prospects.
• More effective delegation and resourcing of work. Client-facing staff will be better able to focus on high value-add activities.
• Benefits for marketing and client acquisition. A defined process that is consistently delivered creates a competitive advantage.

After many months of consideration and research, you purchased a new CRM system. You were optimistic that many of the operational issues your firm had been facing would disappear and things would never fall through the cracks again. However, six months into the deployment you’re not receiving the benefits you had hoped. Sure, you have noticed some improvements, but the workflow efficiencies have not materialized. Did you just spend thousands of dollars in out-of pocket expenses and opportunity cost for what seems to be a glorified Rolodex?

This is a common scenario among advisors that we see all the time. Let’s start with the basics. What is CRM? CRM stands for Customer Relationship Management. CRM is not a technology or a piece of software; rather, it is a business strategy that can be enabled or assisted by adopting technology. Like any business strategy, the results are only as good as the quality of the execution.

In the financial advisory space, CRM is a strategy to deliver a consistent and high-quality financial advisory experience to all of your clients. It is also designed to deliver an effective relationship development experience to prospects. However, in order to drive a CRM-based business strategy, you need to have a well-defined client service model or models. The operative phrase is “well-defined.”

I have yet to find two advisors that have the exact same definition of well-defined. For the purpose of CRM, well-defined means that the processes and tasks are defined at a level of specificity and granularity that when specific tasks or meetings are triggered, everyone involved in completing the tasks is totally clear on what they need to do and when, and they understand the dependencies within the overall process.

Following are four simple (but not easy) steps you can use to effectively implement a CRM business strategy:

Step One: Develop a clear purpose and vision as to why you want to deliver a consistent client experience to your clients, and why using technology tools will assist in enabling that. If you don’t know the results you’re hoping to achieve, then it is impossible to create a plan that will take you from where you are today to where you want to be tomorrow. Create a “vision story.” Actually write a story on what your client service model will look like with the perfect CRM strategy fully implemented. Envision how your clients will benefit. Imagine how you and your staff will use CRM to increase efficiencies, eliminate bottlenecks, automate tasks, and free up time to spend with clients.

Step Two: Define your client service models. Conduct a workshop where you gather all of the relevant employees in your practice together to discuss what the client service experience is today and what it should be tomorrow. Share your vision and make sure to ask questions of your staff so you clearly understand their vision. Use a large wall chart to diagram how the client experience should flow and what the specific meetings, processes, and tasks are that will enable this experience to occur.

Step Three: Refine, validate, and detail the content from the workshop. Make sure that everyone is in general agreement on what meetings, processes, and tasks should occur for each service model. For example, when you bring on a new client, does everyone in the firm do the same thing, every time? When preparing for a client annual review meeting, does every advisor follow the same process and produce a consistent report, meeting agenda, and summary letter? Spend time with the people who are responsible for each task and understand what triggers each element.

Step Four: Once you have clearly defined the business strategy and what it will look like on paper (or the computer screen) you are ready to implement it using your CRM technology. The important point is not to put the CRM technology in front of the business strategy or assume that because everyone is trained on the new CRM system that they understand how to use it to deliver the practice’s client service model. Remember—people first! Make sure everyone on your team is fully trained on how to use the workflow capabilities of your CRM system. Then make sure everyone understands their role in performing workflow-related tasks in CRM, and how it will help the firm achieve its objectives.

Placing your emphasis on improving your processes, and getting all of the key users’ input in the process, greatly increases the probability that your CRM system will yield the business benefits you intended.