by Mark Nahlovsky
CRM as Platform, Tool, or Module?
Because technology continues to be a hot button topic for advisors, it the launch point for our recently launched Advisor Success Series, which begins with an in-depth look at Client Relationship Management programs (CRM). The acronym “CRM” can mean many different things depending on one’s role within an organization and the size, structure, and focus of the organization itself. When it comes to CRM for financial advisory practices and firms, we have simplified the options into three broad categories described as follows:
- CRM as Tool: Advisor-specific CRM solutions that integrate with a multitude of advisory software (Portfolio Management, Financial Planning, etc.) and are maintained by a firm that “gets” financial advisors. The primary benefit of this category is in the expedited “time to value” an advisory firm can achieve.
- CRM as Integrated Module: Advisor-specific CRM with embedded portfolio management and/or data aggregation capabilities. These solutions can integrate with other advisory software, but their strength is in the integrated experience they provide through a common database.
- CRM as Enterprise Platform: Enterprise CRM solutions that can be configured to the exact needs of an advisory firm or that have been configured for advisors by a consulting firm or overlay partner. Advisory firms that have been successful with this option rarely if ever need to say “no” to a business request – where there is a will there is a way!
Why should you care?
The cost difference between the options listed above can range from a few hundred dollars per year to tens of thousands of dollars per year depending on what you need. When you factor in the amount of “care and feeding” a more flexible platform may require, the cost differential only grows larger.
CRM success isn’t about paying more to get a better system, there are great solutions at every price point. It is about choosing the solution that best meets your needs and fits within your budgetary appetite.
The first step I always tell advisors to take when figuring out where to start the CRM selection process is to ask themselves whether they are bringing in CRM as…
A tool to complete certain tasks, if the answer is yes, then learning more about what functionality is available is the next logical step and what matters is whether or not it can do what you want it to do now and in the foreseeable future. Anything beyond that is not worth the additional investment.
A module integrated with another program, if so, then your investigation should center on the programs that you use or plan to use and ensuring compatibility. Understanding the user experience is a critical investigation point in the CRM as a module approach.
A platform to run their entire business, now the next question is just how unique your business model really is and how much flexibility do you need. As you can probably guess, the more unique your needs, the more flexibility you will require and the more likely it is that you really do require an enterprise platform.
The good news is that you’re travelling down a path that others have gone down before. You can learn from your peers, leverage a myriad of industry resources, and leverage firms like mine to go down this journey with your eyes wide open.
My next post will provide insight into breaking down CRM functionality.