The myth of data and why CRM is never the answer

By Kevin Vaughan-Smith and Stuart Maister, Joint MDs, Mutual Value

 

In recent times more and more professional services firms have been investing in the myth of data. Many believe the answer is a Customer Relationship Management system (CRM)to track the activity and relationships of their Partners and other fee earners.

More and more firms have gone beyond this, installing systems that track and record meetings, emails, phone calls and even on-line activity with clients.  Our partner Introhive is the best example of such software in the marketplace.

This shows a real seriousness of purpose about customer relationships and is a great first step towards a proper strategy based on customer intelligence. The problem is that the creation of data alone often fails to produce significant results. 

This is the myth of data we seek to highlight here.

It’s about how you use the data

So: more and more firms have data about meetings.  They may have bigger lists of contacts.  They may be able to understand the landscape of who their team know across a major client, but once again we see a serious lack of commitment by partners and fee earners to act on the knowledge.  Why?

The reason is that data alone isn’t information that is strong enough to change behaviours.   

Knowing that somebody has emailed a senior contact within a client has value. Using this as part of a judgement about the state of the relationship requires more subjective content, with qualitative information as well. That will happen if the person involved has confidence that this makes a difference and will be useful (and used).

What we observe is there are two missing elements

1. Confidence in the value of the CRM to them in their role, and trust that it won’t be used as management oversight or by others to damage their relationship
2. Confidence and the skills to behave differently in the light of new information – for example, to talk confidently to Client contacts they don’t personally know.

Partners worry that information held in a CRM system may be used ‘against’ them. Leadership may use the data to assess their performance, or to set goals they they don’t buy into.  Colleagues may use publicised data to try to inappropriately ‘hone in’ on their relationships, and potentially put their opportunities at risk.  For many, ‘their’ relationship is the source of their strength and income, and data systems which share their activity contain a potential threat to that exclusivity.

While they worry about these kind of issues they fail to enable the collection of quality data, and they don’t put quality subjective data about the opportunities on file. 

Critically, then, having the data doesn’t mean the people involved have the mindset and skillset to act on what is learned. The purpose of this data capture is usually to design and build broader client relationships. But this depends on the ability of those involved to share clients, work collaboratively and have wider conversations than their own narrow area of responsibility.

New information and a new mindset

What’s required is a reset – a change of beliefs in those fee earners that helps them adopt a set of behaviours that reflect the value of working collaboratively, of having a broader sales message that aligns to broader client needs.  When they adopt this mindset, keeping quality objective and subjective data becomes a necessity to ensure client needs are met, the opportunities are being fully leveraged and there are reciprocal behaviours across the Firm.

Once this first step is in place and the team demands better quality data, the second element – the need to be able to go out to Clients and explore their needs, and to build strong relationships – becomes the critical determinant of success. The virtuous circle is for this to be fully recorded and become part of a joined up relationship strategy with important clients, benefitting everyone in the Firm.

The point here is not just having meetings. It’s about having better meetings, involving more people and broader conversations. It helps if a fee earner has confidence that they know how to manage this and see it as in their interest,  and be part of a Firm-wide effort to build stronger, longer lasting and bigger client relationships.

This is the work that Mutual Value does with its clients to help teams develop broader, trust-based relationships which are critical in a tougher market. If this resonates please get in touch.