Coined in 1995, the term CRM (Client Relationship Management) has stood the test of time. Many wealth managers believe that Client Lifecycle Management (CLM) is more of the same, simply with a new name, but this could not be further from the truth.
The idea that CRM and CLM are interchangeable is understandable. Both seem to deliver similar business outcomes and have client centricity at their core. Both involve the capture and retention of data from a multitude of sources, relating to individual clients. And both promise to offer a richer understanding of client and prospect behaviour, supporting client acquisition and AUM growth.
Wealth managers could be forgiven for thinking that the only definable difference is one letter or word… (R)elationship swapped out for (L)ifecycle. Not so!
Both CRM and CLM play critical roles in a firm’s digitalisation strategy. The key capability that a CRM solution brings to the table is a single client view – the cornerstone of a digitalisation initiative. In contrast, a CLM solution delivers the ability to reinvent client journeys.
The single view lies at the heart of a firm’s ability to identify client needs and detect potential dissatisfaction. Most wealth managers with a broad range of offerings are still struggling to deliver a comprehensive single client view and few firms have provided relationship managers with a single advisor workspace.
“The single view lies at the heart of a firm’s ability to identify client needs and detect potential dissatisfaction. Most wealth managers with a broad range of offerings are still struggling to deliver a comprehensive single client view and few firms have provided relationship managers with a single advisor workspace.”
This is not a new problem. The term “single view” pre-dates CLM by thirty years and for several decades wealth managers have attempted delivery, with limited success.
To date, wealth managers have been hindered by operational and technological silos, with each department having a narrow, incomplete view of the client.
These views are rarely synchronised across the organisation, leading to poor and inconsistent client servicing and internal frustrations. But as firms look to adopt CLM and other emerging technologies the single view has become a must win battle, central to any front-office strategy.
So, why is the concept of a client journey so relevant and important now?
While wealth managers have been toiling to achieve the single client view, the world has moved on. The number and frequency of touchpoints has spiralled, the variety of journeys and channels used by clients is diverse, duplication is commonplace and the volume and complexity of regulatory requirements has outpaced the ability of many firms to keep up. The lens is now firmly focused on productivity and how best to meet client expectations; the need for agility has never been greater.
Wealth managers must turn their thinking inside out, adopt a client-oriented mindset and scrutinise the journeys that prospects and clients travel as their engagement deepens. CLM delivers a clear view of clients’ goals and their journeys throughout the lifecycle, enabling seamless handoffs, inter-departmental alignment and clearly defined engagement plans. Journey mapping creates a holistic view, bringing together otherwise unconnected internal stakeholders.
Wealth managers are able to prioritise technology investments according to their impact on client experience and the lifetime value of each client.
Relationship managers need a single workspace with a 360-degree view of all client data, presented in a meaningful form, with actionable insights. Few have achieved this successfully. Over-reliance on manual CRM administration and inability to automatically track interrelationships and patterns of behaviour are highlighted when relationship managers leave the business. Handovers expose gaping holes in the institutional understanding of a client, and in many cases clients follow the relationship manager who knows them best.
Having a holistic view of the client journey is at the core of CLM, delivering insight into the clients’ wants, needs and desires as they arise, and enabling them to detect dissatisfaction or disengagement.
The risk of believing the myth
Those who continue to believe the myth that CLM is the same as CRM will never gain a single client view or deep insight into how best to influence the outcome of each client’s investment decisions. Relationship managers cannot be certain that they are making timely product recommendations that will resonate with a client and the propensity for success is diminished.
The reality
Although there is interplay between CRM and CLM, and both are vital for success, they are very different beasts. Only with CLM can the data captured within a CRM be truly connected across all phases of the client lifecycle, giving relationship managers a holistic view of the next best action that is likely to achieve a profitable outcome.
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