The business model of the fund distribution company I used to work until recently was to identify the best asset managers in the US - mainly from the equity arena - copy a succesful US product, "package" it within a Luxemburg based umbrella structure and distribute it outside the US with a strong focus on Europe. At some point in time a sales rep office in Brazil opened in order to serve on-shore Brazilian clients.
The founders of the firm came from a brokerage background and used to perform their task the "traditional" way by using business cards of their prospect and client contacts and hand-written notes for every single contact that was performed (phone or physical). Between 2002 and 2007 the firm hired more sales people in Miami as well as in other countries and ended up having 8 active sales people calling on potential investors all over the world. Administration of the funds was performed in Luxemburg, marketing and fund reporting was offered through an administrative team based in Miami. Therefore the main task of all country representatives was to make sure that the funds comply with local regulation and where necessary go through legal registration processes, position the funds on the major local administrative platforms and then sell to a targeted group of potential clients (on average each sales person had to follow approximately 150-200 client names).
Without IT support it became clear that not only was it impossible to follow up on every single contact and make sure that this contact receives the information he had requested during the last contact. But also there was no synergy happening between different country sales reps who did not share any of their market information or client visit notes. Although some global financial distribution organizations such as UBS, Credit Suisse or Morgan Stanley operate on a global basis they were covered by multiple sales people independently.
The business case for a Contact and Customer Relationship management system was not difficult to make (although some sales people still resisted) and one of the partners and myself were assigned to the project team in order to chose and implement the right and affordable software. Another important argument in favor of a CRM system was the important value that an extensive and updated client database represents for the company whose main focus is to distribute into different markets. There was the plan to sell the business in a certain number of years and that database would certainly play an important role in defining the price.
The overall goal of the future CRM system was to
- track every single contact to prospects and clients
- allow synergies between all sales employees and cross selling within global financial institutions
- ensure data security, specially for client data (such as amount of investments, gains/losses on portfolio investments, tax information etc)
- allow senior management to obtain regular sales activity reporting and track efficiency of single sales people.
The project team started to assess the needs of every user/sales person for their daily activity and to inform about the advantages of a CRM database. That process took approximately 3 months and some employees had to be convinced about the need and advantages of the system. It became obvious from the beginning that the majority of the people had no clear idea of what exactly they needed from an IT support and how they could formulate it. We established then a process chart going through every single step of a prospect approach starting with cold calling activity, follow up activities until the finalization of a deal and the servicing of a client.
Among the features to be included was the distinction between "prospects" and "clients".
Prospect information must include:
- general information about the entity (contact details, contact person etc)
- personal information about the main contact (birthday, family situation etc)
- detailed information about calling activity (phone and visits) as well as any follow-ups performed for this client
- a search application that allowed to group prospects by geography, order of importance, interest for a given product, profitability in the sense that after a certain number of contact attempts some business had to follow and if that was not happening the prospect would fall into a different category.
Client information completed the above mentioned information with the following data:
- selected products
- Transactions and volume of assets under management (regular update)
- fee structure applied and revenue per client
- gains and losses per product
Most of the large asset management companies I used to work for did not find an off-the shelve solution but customized existing databases (such as Siebel) and added company specific features to it. However this could only be done if there was sufficient funding for the project and a clear commitment to the CRM idea.
In the recent case one of the founding partners still did not believe in the benefits of a IT supported client information system and therefore was not willing to pay a lot for its implementation. He claimed that such a system would only be viable if everybody was disciplined enough to enter data and update the data on a regular basis. Starting with himself he would not commit himself to that task claiming a "lack of time".
At that point the project team decided to nominate one "data manager" who would be in charge of supervising the entry of all relevant client/prospect/product information into the database following a fixed format, enter that data for those sales people who did not have time to do it (mainly one partner) and who would also administer the access rights between single country data sets that to some people should remain confidential.
Based on our single interviews, the assessment of needs and requirements and within the reach of a limited budget (approx 5.000 USD) we decided to implement the ACT! client and contact database developed by SAGE. It was certainly not the perfect software but one that came close to our requirements. It does support the Microsoft Outlook environment which was one important factor for many sales people who wanted to be able to send client visit reports or other information out via email by using the text in the ACT template and avoiding to retype it again in a separate email. We had no budget for any customization and therefore suffer sometimes from a US bias of ACT! for certain screens. But overall acceptance was positive and in the meantime an upgrade to the 2010 version has been performed.
Outcome:
The project lasted for approx 5 months. As of today more than 4000 contacts globally are documented in ACT. There is a lot of information sharing between similar countries such as Italy and Germany in terms of comparing client visit notes and learning from situations that could arise in either country. Quick client grouping can be one in cases where a given product provider organizes a roadshow in a country and need to find those clients that show an interest in that particular product. Or the manager comes through a region/town and wants to know who would be available in that area.
And finally there is also growing recognition of the data value for potential buyers of the company who strongly rely on that existing book of business.
Sources: Selector Management, Miami
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