There has been much written about Customer Relationship Management and lately CRM has become an international marketing “buzz-word.” However, it is really nothing more than highly successful attempts to strengthen and maximize the vital relationships with prospects, customers and clients.

Techniques and practices we have employed since the beginning of marketing, when combined, systemized and replicated often, become a system of Customer Relationship Management. When employed in the scale demanded by the best practices and high labor costs of today, this invariably requires computer software.

C = Client

Whether you refer to them as “clients,” “customers” or even as “prospects” a CRM system is all about people. Of course, some are executives, partners, general managers, company directors and media contacts. They may be important to you as leaders of smaller businesses, a publicly held corporation, a non-profit institution, or a professional practice. You certainly want to record directors or trustee of boards, since these influential persons can lead to a lot of business for you. Their referrals really matter.

You must classify these names and your CRM system must be capable of producing letters, invitations, email addresses, phone numbers, and labels for these persons – based on your categories.

Successful business enterprises extend greater effort and attention to their best customers – and those who have the capacity for major increase. Therefore you should classify both prospects and clients and place greater emphasis on those with greatest potential. This is not discrimination – it is reality.

Many financial practitioners are now charging a monthly or annual client maintenance fee – at graduated levels. For example, one veteran RFC charges the following monthly fees:

Gold $300
Silver $200
Bronze $100

Each level is entitled to different services and benefits as well as attendance at various communication sessions. Without a CRM system he and his staff could not instantly recognize which clients are entitled to which benefits, and they could not instantly select and process a particular group for a suitable mailing or invitation.

R = Relationship

Many banks and brokerage firms are beginning to use the term “Relationship Manager” as opposed to the old term “Customer’s man” which was super ceded by Registered Representative. The key is that you want to develop a new professional relationship with prospects – turning them into clients. Sometimes this happens swiftly and easily. But often the best clients require repeated contacts before they are fully bonded as new clients. With existing clients, as you nurture the relationship, you will gain three benefits.

• Retain the products - those already sold or being delivered, such as insurance or assets under management.

• Obtain new business – additional products, increases and capturing more assets for your management. You want to gather all funds that have been under someone else’s control and compensation.

• Garner referrals – which is essential to your practice. You must replace the inevitable attrition as clients die, have financial reversals or transfer outside your area.

You are in the “relationship” business – with a concentration on the financial elements of your clients’ lives. But you cannot maintain relationships with a growing customer base without effective tools – or an obsessive/compulsive organizational personality.

M = Management

How many persons are critical to your practice. Naturally this will vary from one advisor to another, but let’s examine how they might be classified and totaled.

• 30 A Clients - High Income and/or high potential
  
• 60 B Clients - Good income and good prospect referral
• 90 C Clients - Adequate income, but little future
• 40 D Clients - You’d really like to discard these – or assign them to someone else, since you cannot afford to spend time with them
• 200 Existing Prospects - You’ll add and delete these, but you should always have a group being warmed up for that first appointment
• 100 New Referrals - Every year you will add referrals, and gradually convert some to new client status.

That is 520 names. You cannot even remember that many! In fact, you cannot bring to your mind the facial appearance of all your 60 “B” Clients.

Managing all the information and contact history is critical – and you need the most powerful tool available – a CRM system. And it an store the photos and all the personal preferences of every person in the system.

Successful business enterprises extend greater effort and attention to their best customers – and those who have the capacity to do a lot more business.

What CRM is Not!

It is not just a database into which is entered information about a customer/client or a prospect. However, it is essential that this vital data be retained. How could you communicate with this most critical component of your business or practice unless you could use the proper direction? At first, this meant street address, city and state. Then the Postal Service required a 5-digit ZIP code. Then 9 digits. Now if you want fast delivery you need to add those pesky little bar codes.

But today’s environment dictates you must also have the email address (maybe both business and personal). Folks are now clamoring to be contacted through Social Networks such as: Facebook, Twitter, LinkedIn, etc. You cannot contact them in that venue unless you have retained their information and you are oriented to that communication media.

Tracking is Necessary

It is not just a record of contacts. Your CRM must be a record of communications. This should include mailings, email, phone conversations, tasks performed and records of physical meetings. But you need to be able to recall the actual communication piece – instantly. It is not sufficient to know that on February 12 you sent Letter # 112. A year later, that letter may have been altered or even re-named several times. You need the actual letter, just as it was mailed.

It is not merely a record of purchases. However, your CRM system should have records of prior acquisitions of products or services – and also their expressed or perceived interests. What events surrounded those acquisitions – such as response to a direct mailing, email or attendance at an exhibit, conference or tradeshow?

It is not only personal characteristics. However, you do need to know the relevant groups or categories that can be accessed in order to measure suitability for a contact or solicitation. Is age relevant? Net worth? Occupation? Fraternal association? If you have inquired about these, and recorded that information, then that relationship basis is possible and can be very productive.

Research Can Help

In a series of studies Jim Cecil learned that consumers required multiple, favorable contacts in order to form a favorable association with a vendor. And the number of contacts was increasing, from 11 to 13 and at his last study 15 positive impressions were required to create and maintain a positive Top of Mind Awareness (TOMA).

This explains why there is so much repetition in advertising, repeating the logo, the brand and the constant reinforcement of the message. Some TV commercials are run 3 or even 4 times in the same 60 minutes. Is that because they think you were at the refrigerator during the program break? No, it is because they want to firmly embed their images into your conscious and subconscious memory. It explains why ING wants to link their favorite shade of orange at every opportunity in advertising, sales literature, stationery, business cards and even vehicles.

Russ Prince, who researches, writes and speaks about how to reach the affluent community indicates that because the upscale persons of society are subject to more and better ad messages, the affluent now require 28 positive impressions before the bond becomes solid.

New TOMA Requirements

Moreover, once you have built your TOMA bond, you must maintain it – or it will be replaced by someone with an orange, red or purple logo. Your nice, brown brand identification will gradually fade away. If you offer a truly unique product or service, then you may not need 28 impressions to create TOMA, and 15 or 20 impressions per year thereafter. But, you waste your initial marketing efforts if you do not maintain your brand – strongly and frequently.

If you do not maintain TOMA with your clients, they are extremely vulnerable to approaches by other advisors and institutions. Remember, your best clients are someone else’s best prospects – if you do not maintain TOMA.

Branding Is Essential

Branding links images. We all have favorite advertisements. Yours might be hundreds of clean cut young people pouring over a hill with an American flag singing about what they’d like the world to be. Another might be a handsome Hispanic man sitting on the seat of a car, and running his graceful hands over the “soft Corinthian leather” of the luxury car. It sold lots of cars, but do you really believe that Chrysler imported leather from the small Mediterranean city of Corinth? The 1976 Chrysler Cordoba, was very successfully promoted by celebrity spokesman Ricardo Montalbán, and the leather was produced in Newark, NJ.

What are your brands and logos? You should have some, and they should be constantly employed to build this CRM-based tie. Graphics, personalities, colors, shapes, word selection, sounds, tastes and even smells can all be part of achieving and maintaining the TOMA bond. Procter & Gamble and Johnsons know that the first smell of their products must convey the sense that cleanliness or shine will accompany their use. What image does your brand convey? Is it financial security, highest performance, potential riches, or a friendly, receptive counselor?

Do you have a jingle, slogan or motto? If so, it should be incorporated into your CRM efforts. Billions of pounds of detergent were sold simply because, “Tide’s In – Dirt’s Out!” That was easier for the homemaker to remember than all the chemical properties of the new “detergent” soap.

Achieving Repetition

Your marketing effort must continuously expose your clients or customers to favorable impressions. These messages cannot and should not be sales attempts, but the bonding that takes place will lead to sales. It conditions the recipient for your sales attempt at a later date.

Automation is Essential. You are very busy running your enterprise. You do not have the time to be thinking, “Now, how long ago was I in contact with customer XX, and what might I be sending out next?” You cannot do it.

However, you can administer a sequence of marketing messages, articles, information bulletins, perhaps accompanied by your letterhead (that naturally incorporates your logo, contact information, slogan or motto). This sequence of contacts should be replicated over and over – starting anew with every new prospect or customer you add to your CRM system.

Computers are great at repetitive tasks. You can design a marketing sequence, and then gradually fine-tune it for maximum results. It will track where every client, customer and prospect is within your contact cycle, send the next item out automatically, and maintain a record. You can always insert special invitations or offers, based on the characteristics that were recorded previously.

Converting prospects into customers. When you have entered a person who might be interested, as you make further contact, your information is enriched. Gradually you are learning more about what might be of interest or value to this person. As they come to identify your messages, logos, brands, information and perhaps your building or your photo, they are moving from the status of prospect to that of customer, or from a one-time purchaser to become a loyal fan.

Retaining customers. Especially at the outset of a relationship, customers are especially vulnerable to approaches from your competitors, creating doubts about your ability to deliver as promised. Frequent additional contact, even if automated, is very reassuring. These items reinforce each other and all the personal contact. Gradually your bonding grows ever stronger.

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About the Author:

Ed Morrow, CLU, ChFC, CFP®, RFC®, is chairman and CEO of the FPC and the IARFC. He lectures around the world on various aspects of financial planning, marketing, branding, and practice management.  His articles and addresses to organizations such as MDRT, NAIFA, FPA, and SFSP have been widely reprinted.