Archive for February, 2013

Development of Sales Systems (Capability #4)

The last of the capabilities is the anchor that realizes the value of a clear client strategy: development of an integrated sales system built as a hub-and-spoke ecosystem where all critical elements of client information are brought together in a single Sales Portal. Without the right sales systems in place, the implementation of a client strategy becomes extremely burdensome, labor intensive, sub-optimal, and easy to abandon.

Sales SystemsClient information should include CRM activity tracking, client meeting and call notes, client revenues, transactions, client documents, and any third-party data that can enrich a salesperson’s understanding of the account (for broker-dealers, for example, survey data, market share data, fund performance, and securities holdings data would be invaluable).[more…]

Now, it’s probably not practical to say that every single data system that houses client information can be brought together into a single platform. This would be a herculean task for any IT department with an existing complex array of systems, but by thinking about and reinforcing the idea that any work on sales systems should have the ultimate goal of providing better intelligence to salespeople and sales managers in a consolidated fashion.

Client Management should have significant input in, if not outright business ownership of sales system initiatives. This would guarantee that the systems are created with a client perspective. It would also help in informing the IT team what information exists and what would be important to prioritize. Because of the closeness of the Client Management team with the sales groups, they would be instrumental in designing the systems in order to best incorporate into the sales team’s workflow. A big reason for the failure of many sales system initiatives is because many development teams make the assumption that salespeople will change their daily workflow in order to adopt a new technology. Regardless of how useful the new tools are, if they force salespeople reorganize day or forces them to perform new tasks that don’t immediately provide them with a benefit, they will just not adopt them.

Three keys to successful sales system implementation are:

1) Integrate new technologies into existing workflows and systems so that interaction with new tools is seamless (for example integration of CRM functions into email application and mobile devices)

2) Attempt to bring as much disparate client information as possible into a single portal that requires just a few clicks to get from one type of information to another

3) Provide as much of a feedback loop, as immediate as possible, for any information that salespeople are asked to contribute into the system. They should be able, for instance, to run calendars or reports of activities logged into the system.

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Client-centric Financial Metrics (Capability #3)

The CFO’s office, being responsible for all financial reporting in any firm, are the seemingly logical choice as owners of client-level reporting given their access and understanding of the data, technical expertise in financial reporting, and broad understanding of the overall flows of the firm. Regardless, Client Management should play a key role in the definition and structuring of client-level analysis and reporting, for one key reason: a traditional financial management function often has competing (and sometimes conflicting) mandates regarding how they report financial results. We’ve seen instances where legal entity or divisional reporting take precedence over client-oriented reporting that often creates distortions on how an account is reported so it’s hard to see its true performance and who within the organization is responsible for variances.

Client ReportingTake the example of a global client that does business in multiple geographies and across multiple products. Each regional manager and each product manager, working with their respective finance heads, will vie to earmark as much revenue for their division as possible, creating double-counting of revenues and confusing results for a given client. The Client Management team should be tasked with unraveling these knots to provide a clear, holistic picture of an account.[more…] They should also identify what information needs to be delivered within Sales and Sales Management to ensure the right strategic decisions and focus.

In some cases we’ve seen Client Management take full ownership of client-level financial reporting, while in others we’ve seen a close collaboration between CFO and Client Management. Regardless, the Client Management team should have a strong global mandate and management support to oversee or co-manage this process.

Like any financial analysis and reporting function, client reporting involves establishing target budgets, reporting account revenue periodically, looking at trends, and flagging outliers that should be raised and discussed. Additionally, client-specific KPIs (key performance indicators) that help better understand client behavior and assess the quality of business flowing in should also be identified and tracked. Examples include volume and order size, movements versus peers, pricing changes, and changes in wallet size and market share. Client profitability analysis, which involves applying costs against client revenues, is probably one of the most useful, if not most complex, analysis to implement.

Identifying meaningful client segments and creating statistics around those also helps in identifying trends and uncovering opportunities. A strong Client Management team is usually adept at understanding the marketplace to best categorize the account base in useful groups. In many cases, the obvious segments may not necessarily be the best groups to track. The distinction between hedge funds and traditional asset managers, for example, is becoming blurred so tracking these is becoming less meaningful. Segments based on investment style, investment markets, or even firm “personality” may prove more useful for aligning resources.

By aligning client financial analysis and reporting with a strong Client Management function, a firm will set itself up to better manage their account base from a client-centric perspective and help realize the value of a clear client strategy.

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Service Tracking (Capability #2)

Once a client strategy has been designed and kicked off, the real work of implementation begins. Relationship managers, salespeople, and all other client facing professionals now have to engage clients with a new purpose. But how do managers know whether the team is executing based on the new plan and gauge whether the new program is having a meaningful impact on clients? The Client Management function should be able to track and monitor service activity. In many ways this is perceived as a painful thing to do, with many client professionals feeling as if there is additional scrutiny on their work with “big brother” makings. Many managers also feel that instituting policies and technologies aimed at monitoring their staff’s work will alienate them from their team and create a breach of trust.

FeebackThe key to success of the strategy is for Client Management to frame service tracking as a productivity tool that will help client-facing teams use information to enhance their interactions with clients.[more…] There is a huge distinction between systems that capture client interactions for the purpose of management oversight and systems that capture data which then feeds insights back to salespeople to make their jobs easier and more productive. I would argue that without a feed-back flow of information, salespeople will completely distrust the system and find ways to game it, or be completely resistant to adoption. The most talented individuals with the best client relationships will probably be the first to push back because they know they have leverage over the organization.

Activities that should be tracked include phone calls, meetings, and emails. Important documents, like contracts and pricing sheets, should also be stored in the same location as other client data so that client-facing individuals have a single repository of critical client information (to the degree that’s sensible and minimizes risks of information leakage from the company, of course). Any notes or client color should also be documented and logged into the system. Call reports should be required to be written and logged following any important client meetings or calls. There is always a lot of resistance to institutionalizing this, but what we have found is a lot of this is already being done, mostly through emails, but these are not being captured in a system that allows for information tracking and sharing.

What’s incredible to see is that once the ball gets rolling and salespeople start using the information collected, productivity shoots up and everyone becomes dependent on the data. Managers will benefit from this virtuous pattern by having robust client service tracking that, when reviewed in aggregate on a periodic basis, brings the client strategy to life.

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Developing a Client Strategy (Capability #1)

The success of an effective client management function hinges on well-articulated goals the firm is trying to achieve. The clearer they are, the easier it will be for the entire team to buy into them and to stay focused as the program evolves. The goals also have to be realistic given the resources and skill-sets available. It’s tempting to develop grand notions of outsized success, like in the film ‘300’ where 300 Spartans defeated a massive Persian army, but keep in mind that your staff probably was not trained from birth for the single-minded purpose of defeating an enemy. Salespeople especially have to be fully bought in since they will be the ones who will execute the strategy, manage the client relationships, and collect and share information, which are all central to success.

Goals and StrategiesMany managers express concern that if they do not articulate a broad enough scope, they will leave opportunity on the table, but we advise them that creating smaller, achievable targets can actually create more successes over time and prove a faster route to broader goals.[more…]
Once the goals are in place, then managers need to develop a series of strategies and then action plans to achieve their goals. This is admittedly the most confusing step in the whole process as many managers fall into a pattern of endless debates about the difference between a goal, a strategy and an action plan. For clarity, we define ‘goals’ as those that have at their core some external impact you are looking to influence that will elevate your position, e.g., “Increase client revenue by 10%” or “Increase client satisfaction based on xyz survey”.

‘Strategies’ target internal functions and effort that you intend to transform in order to achieve your goals, e.g., “Increase cross-selling in sales team” or “Allocate resources to higher opportunity accounts”. Defining a strategy is largely driven by a firm’s existing and potential future resources. Managers have to look at their capabilities with a critical eye and ask if they are right to compete and make meaningful headway. If they are not, they should have enough capital to upgrade their platform to match their defined opportunity.

‘Action plans’ sit one level below strategies and have the purpose of identifying the work and linkages that need to happen, and assign accountability to that work.

Many managers make the wrong assumption that assignment of tasks falling out of action plans are foregone conclusions given people’s current job descriptions. This is a dangerous assumption especially with brand new initiatives. Creating a list of top new target accounts, for example, could fall under the head of sales because he knows the market, or it could fall to the head of client management because she has all the opportunity metrics. It’s important to be explicit of ownership of all tasks.

It is also critical to perform strategy checks against goals and strategies to evaluate whether they are still achievable, and in some cases still relevant. Both external and internal factors can shift enough to warrant a revisit of the original plans.

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