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Every business and industry needs data to grow and succeed. Knowing what data to collect, how to collect it, and what to do with it after collection makes all the difference in a business’s survival.

As a financial advisor, you collect your clients’ data to better understand their needs. By knowing essential datapoints – everything from birthdates to preferred college choices – you can more easily create a robust financial and investment plan that best suits their needs.

Customer relationship management (CRM) software capitalizes on client data. But few firms use CRM software well and to its fullest capabilities. Many firms aren’t harnessing the business analytics and process efficiencies CRMs provide; in many cases, CRMs exist only to serve as advisors’ digital address books.

A financial advisor’s success depends on how well they can anticipate their clients’ needs and manage them with data gathered over time. Firms that leverage CRM software appropriately are positioned to surpass their competition and attract – and retain – ideal clients who value a strong, personal relationship.

Whether you’re looking to dust off your CRM software and learn to better use its features, or you’re looking to make a CRM investment for the first time, here’s what you need to know.

What does “CRM” mean, and what does using the software entail?

When you think of a CRM tool, your mind may automatically think of rows of client names, addresses, email addresses, and phone numbers. But a CRM system – when deployed and used properly – is so much more than that. Your CRM should be your business’ hub for the management of all interactions with your clients. It should integrate all of your clients’ data, making it easy for relevant groups in your firm – everyone from your marketing and operations teams to your business development team – to assess your clients’ needs. This results in a richer and more personalized client experience.

A standard CRM should include the following datapoints:

  • Identity data: This provides all the necessary data to personally identify a client, including their name, contact information, and other relevant personal information.
  • Descriptive data: Not only does this data help you build a stronger relationship with your clients, but it also gives your business development and marketing teams some insight into your clients’ lives. This data may include your clients’ profession, career, and other lifestyle information, which these teams could use to deliver more tailored marketing and financial education.
  • Quantitative data: This information provides insight into how your clients have interacted with your firm, such as the number of times they’ve contacted your business or visited your website. From a business-development perspective, this information is immensely helpful in determining where a prospect is in the pipeline.
  • Qualitative data: This information is less about the numbers and is more difficult to quantify. It includes findings from relevant client engagement surveys, including ratings and satisfaction levels, or even clients' reasons for choosing your firm over a different financial advisory firm.