Two weeks ago we revealed the 12 data points financial advice and planning firms should collect for all new enquiries.

That leads us to the next question, where should you record this data?

Firms have three main options:

1. Their existing back-office system
2. A sales-focused CRM system
3. A spreadsheet.

Naturally, there are advantages and disadvantages for each which we’ll explore below before we make our recommendation.

1. Existing back-office system

Most financial advice/planning firms use a back-office system to manage the advice process and the client relationship. We all know the main players, but there’s a growing band of new entrants including Elen and other firms.

Advantages

• Using your existing back-office system to record new enquiry data reduces the number of systems you use and creates a single source of information.
• Your team will already be familiar with the system which should reduce the need for additional training. That said, they may still need to familiarise themselves with areas of the system they are not currently used to using.
• It should be relatively easy to ‘upgrade’ an enquiry or prospect into a client if you collect the data in the same system.
• It’s usual for back-office systems to be used to reconcile fees. Therefore, it should be relatively straightforward to calculate initial and ongoing fees for each new client and, consequently, the return on your marketing investment.

Disadvantages

• Your back-office system may not have the ability to record each of the 12 data points.
• In our experience, most back-office systems aimed at financial advisers/planners don’t have the same nurturing functionality as sales-focused CRMs to help convert prospects into clients.
• Furthermore, your back-office system might not produce meaningful conversion and sales data, which can help you make evidence-led decisions about your marketing and sales processes.
• In some firms, it’s only the administration and support teams who have access to the back-office system. If it’s the advisers or planners who first speak to new enquiries (not that we’d recommend that) you may need to implement additional structures or processes ensure the data is accurately added to the system and kept up to date.

2. A sales-focused CRM

There’s a growing trend among some firms we work with to use a sales-focused CRM system to record new enquiries, nurture them into becoming clients and monitor sales performance.

Generally, these firms use a CRM, such as Pipedrive or Salesforce, to manage the process of turning a prospect into a client. Then, they use the traditional back-office system to, among other things, reconcile fees, manage the advice process and the ongoing client relationship.

Advantages

• In our experience, this approach improves conversion rates as the CRM is focused on this outcome. Firms who adopt this approach, are, quite sensibly in our view, deploying different tools, at different times, to do different jobs.
• Using a sales-focused CRM will help you nurture prospects until they become clients (or not, as the case may be). It will also help you to understand key metrics, such as conversion rates, which will allow you to improve your marketing and sales processes.
• Using different systems separates the “prospect to client” part of the journey from the advice process. It also improves the focus on nurturing prospects until they become a client.
• A sales-focused CRM may allow you to collect data which isn’t easily recordable in your existing back-office system.

Disadvantages

• Using two systems will inevitably lead to the duplication of data entry. However, if you only use the sales-focused CRM to nurture the prospect until they become a client, and not to deliver the advice process, the duplication of data is minor but leads to significant other benefits.
• Using an additional system will increase costs. However, basic CRMs are very cost-effective and, in our experience, will pay for themselves many times over as a result of increased conversion rates.

3. Spreadsheet

Even though they probably use a back-office system for the reasons previously noted many firms record new enquiry data in the simplest of all ways; a spreadsheet.

Advantages

• It’s easy! A spreadsheet is a simple way of recording data and eliminates the need to train members of your team on how to use a new system.
• If your firm is not accustomed to recording new enquiries, a spreadsheet might be the easiest place to start and, therefore, increase the likelihood of data being recorded accurately.

Disadvantages

• A spreadsheet might be an easy way to record data, but it won’t analyse it in the same way a sales-focused CRM will, or a back-office system might.
• A spreadsheet means you are duplicating the entry of data without the benefits a sales-focused CRM will bring.

So, which should you choose?

If your existing back-office system allows you to record the 12 data points we recommend, provides enquiry nurturing functionality, and offers meaningful analysis of the data it’s a no-brainer to use it to monitor new enquiries.

However, if it doesn’t provide this functionality, we believe there are significant benefits in adopting a sales-focused CRM.

Finally, if extending the use of your back-office, or introducing a new CRM is a bridge too far right now, then use an Excel spreadsheet. It won’t analyse the data or help you nurture new enquiries, but at least you’re recording the data which is better than nothing (and far more than many firms do).

Summary

As we said a couple of weeks ago, recording data brings many benefits:

• A genuine understanding of what’s working with your marketing, and what isn’t
• Lower marketing costs because you can do more of what works and less of what doesn’t
• An understanding of the return you’re getting from your marketing investment.

To make this work there are several steps to follow:

Step 1: Agree on the data points you will record. Naturally, we’d suggest recording each of the 12 we recommended in our previous blog.

Step 2: Decide where you are going to record the data.

Step 3: Educate your team on the reasons for recording data and the benefit to them. In our experience, they are more likely to do it if they understand why it’s important and how it will benefit them.

Step 4: Build processes to make sure it happens and check back regularly to make sure it’s being done.

We’re here to help. If you have any thoughts on what we’ve said today, or you would like to discuss our experiences, we’ve always happy to have a conversation. Please email hi@theyardstickagency.co.uk or call 0115 8965 300.