7 Things you wished you had known before making your CRM choice

Best Practices

20 October 2022

Indy Sarker


Traditional client engagement and servicing models in the broker-dealer industry are increasingly under attack. Technology has a role to play to align broker-dealers more closely with their clients’ needs and aspirations. However, there is lot more to the challenge than merely implementing the right technology.

It is well known that CRM initiatives have a high failure rate across industries. Given that backdrop, it is critically important to approach each such initiative with a game-plan that is not only consistent but also addresses the sequential requirements of the project (avoiding the classic “cart before the horse” problems). Most importantly, the broker-dealer firm has to be poised to seek the benefits that a CRM software investment can deliver over time.

Over the years of engaging clients in the broker-dealer space and implementing client-facing and engaging CRM platforms across multiple geographies, I have shortlisted 7 key factors that require acknowledgement and acceptance within the broker-dealer organization, to exponentially raise the success rate of their CRM initiative(s).

1. Have a clear view on why you need a CRM

Very often broker-dealers believe their client servicing woes all come to an end the minute they put in place a CRM software. The reality is far from that. In fact, if anything, winning the customer service challenge begins with having the right CRM tool in place to support the business. Often, due to lack of clarity on the reasons behind the need for a CRM, business managers end up making the wrong choice when it comes to their CRM needs.

It is therefore really important to clearly define your objectives and evaluate each CRM platforms on their respective merits to meet those objectives. The objectives must be measurable and easy to comprehend by the business, to ensure the CRM project stays the course. The lack of clearly defined objectives can potentially result in either the project being derailed mid-way or the project on completion fails to meet the needs of the firm.

Your objectives can range from cost-of-business to better client engagement; whatever they are, they need to be clearly stated and captured across the business as the first step in the selection process.

2. Ask whether your business is CRM Ready

Given the specific challenges and nuances of the broker-dealer and investment banking industry, traditional financial CRM systems fail to meet their requirements when you start to look under the hood. Secondly, even in instances where the front end of the customer service organization leads the CRM conversation, more often than not they fail to ask some basic questions like – Is my business CRM software ready?

The question – “Is your business CRM ready?” – is integral to as part of proceeding on the path to find the most appropriate solution. In order to convincingly answer the above question, you need to reflect on and answer a series of further questions, namely:

  • Is your client data in good shape?
  • Do you have well established operating procedures when it comes to engaging your clients?
  • Are your people (ultimate users) on-board to be early adopters of the CRM?
  • Do you have a robust (client) account management framework in place? If not, do you have a “wish list” on what you want to achieve when it comes to (client) account management?
  • Do you have clearly defined goals and objectives at the individual (user) level, in order to achieve your organizational level goals on customer satisfaction?
  • Do you intend to reward/appraise your client service organization on the basis of client service metrics and analytics driven off the CRM platform?
  • Are you willing to commit to the CRM process as an organization - to see the long-run benefits?

The above questions highlight the importance of the people-process-technology trilogy when it comes to making a CRM initiative a success.

An organization that goes from having no CRM to a CRM platform, needs to also undergo a culture change in terms of how they transact business and engage their clients in the world of institutional broking. Such culture change requires top management sponsorship and perseverance to see the project through its life cycle in order to gauge success over a 3-5 year period.

An organization that is contemplating a move from an existing CRM software to another platform/vendor needs to have a clear view of what it wants out of this move. Again the commitment to the change management process is paramount to the success of this shift and reaping the benefits that drove the change decision in the first place.

3. CRM choice is more a business decision than an IT decision

In many broker-dealer organizations evaluation of a CRM platform is largely a technical review as opposed to a review where the client servicing or engagement function takes the lead in the evaluation process. While the IT evaluation is vital, one cannot under-estimate the importance of the actual user of the system as well as the managers that wish to drive enhanced customer experience, transparency and productivity across the division as a result of the CRM investment. Stakeholder buy-in is extremely important across the business units that are called upon to leverage the CRM platforms in order to ensure success over the long-run. It is therefore critically important to identify and build key stakeholder “internal champions” for the cause and have them involved right from the planning to the ultimate implementation and business/client engagement phase of the CRM life cycle.

4. Your CRM should be client-centric; and not about “you”

Imagine a scenario; you have been through the herculean task of putting in place a CRM software. You have now started to get users on-board to use the system and you are winning the user-adoption challenge. Then what?

Most CRMs in the broker-dealer space become gigantic information storage repositories with little real-time or on-demand analytics to aid business decision-making; which is so critical for commercial success. In other words, there is a disproportionate amount of time and resource spent towards getting information into the system and very little time and resource to use the data and related analytics to drive client-centric decision-making within the organization. We believe the future of broker-dealer CRMs is all about client engagement and client-centricity, driving both quantitative (i.e., research, meetings, calls, corporate access etc.) and qualitative (sentiment around stocks and ideas) assessment in the client service value chain.

While the initial building blocks of a CRM project may relate to Client Contacts (management), Coverage Responsibilities, and Core Reporting, there a lot more needed to win the customer service experience challenge. Actionable analytics – using the massive data accumulated in the CRM software – is vital for enhancing the client service experience and driving organizational level change to adapt swiftly the dynamic and evolutionary needs of the client base (i.e., the institutional investors).

Empowering managers and sales & trading professionals with the appropriate intelligence on client activity and trading patterns helps to drive greater value and service. The minute to put the client in the center of all your activities, you start to eliminate information silos and begin to cross-sell better across your various divisions. In that process, not only are you in a better position to respond to your client needs more efficiently and in a timely fashion, but also put yourself in a very competitive position to secure a larger portion of your client’s business.

5. CRM - Merely a tool; not a magic wand!

For a broker-dealer that implements a CRM tool for the first time, it’s about changing work habits and procedures and driving home the benefits of such changes down to each individual user. For a broker-dealer that migrates to a new CRM (from an existing platform), it is vitally important to “sell” the new platform internally to all users and the capabilities that make the business more competitive. On both counts, it requires organizational support and sponsorship at all levels. Bear in mind, changing or eliminating any old habit takes time and this is no different when you are changing working practices – be patient!

Organizations that do not give user-adoption challenges adequate attention tend to reap little benefit from their CRM investment. It is worth stating at this point that different user groups (i.e., research analysts, sales persons, sales-traders, event planners etc.) have different needs and expectations from their CRM. It is therefore vitally important to contextualize functionality and capability in ways that promotes user-adoption and lays the foundation for the benefits to accumulate over time. You are not playing big brother with this tool; but merely empowering your client service organization to do a better job!

6. Do not underestimate importance of “clean” client data

An organization has to be “CRM Ready” before it stands to benefit from a CRM investment. One of the criteria on whether your organization is CRM Ready centers on your client data. If your client data (i.e., contacts, account team details, service requirements, individual service and research preferences etc.) are not in order, no CRM investment can deliver on the various organizational objectives set forth at the start of the initiative. It is essential that your client data set is high quality. Equally, account management related data-points must be in place.

Within broker-dealer organizations the CRM platform is frequently blamed by the business for lacking effectiveness, when in all honesty the faulty client data set leads to either faulty client servicing intelligence or follow through actions; or worse, it leads to disengagement at the individual user level, which leads to an aversion to adopt the platform. The ultimate effect, after spending time, labor and money is abandonment of its use. Setting the foundational building blocks at the outset will benefit everyone (including clients) immediately and in the long term.

Eliminating client data gaps, both in terms of accuracy as well as preference mapping, eliminates frustrations in the client service process at the individual user end.

7. CRM - Not an end; but a means to an end

Simply putting in place a CRM is not enough. You now have to ensure the CRM investment works to deliver on your organizational objectives. It is a means to an end. This is why having clearly defined success metrics and objectives is immensely important to measure the effectiveness of the CRM investment over time. It is imperative to set realistic goals that are time bound in order to assess the impact of the CRM investment.

Technology does not work in a vacuum, and nor does it deliver immediate results. Technology works alongside the people and the processes to deliver results over time.

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