In this blog, we’re going to tackle a subject which firms often struggle to resolve, namely being able to accurately and efficiently track how business is introduced to the firm.

At the heart of the issue is the problem that too many firms just don’t see CRM as being an integral part of the firm’s overall business strategy.  It’s seen as being an additional piece of administration that has to be reluctantly performed,  rather than as a tool to support existing processes which can not only make life easier, but can add significant value to the way in which the firm operates.

The manifestation of this problem is both strategic and tactical.   At the strategic level firms seem unable to articulate their most reliable sources of business.  As a result, business development effort seems to focus on chasing high profile, high prestige clients and intermediaries with no real opportunity of every firm that chases them, successfully converting an opportunity (or perceived opportunity) into work.

The tactical manifestation of the problem is equally common.  If referral management is such a critical element for firms, why is it that almost every New Business Intake process dedicates only a single line of free text to “source of business” and doesn’t try to link the (considerable) effort taking place in Business Development to the process of incepting new clients?

Surely it’s “Business Development 101” to try and close the loop between the effort you’re putting into business development and the relative success of each different channel to market.   Well apparently not.  The amount of success that firms are having at tying referral information to CRM is very limited so it means that the only conclusion to be drawn is:

“it matters, but it doesn’t matter enough”.

In the current economic climate, the mantra that it’s much more expensive to win a brand new client than to generate more business from an existing one has never been more applicable.  And in terms of referral network management this is equally the case.    The staggering thing about poor referral management is that there is so much mutual advantage in doing it well that both sides of the relationship are as guilty as each other.

So where do you start?

Well the first place to start is re-design that new business form so it at least says something more meaningful like, “Which external person referred this piece of work to you”?  Even better make it look up your CRM system!

While we’re on the subject there are other things that should be done to the new business intake process, most of which can’t be printed, but a few that can are:

1) Take off EVERY piece of data capture that could be gathered more effectively elsewhere e.g. industry sector, postcode, fee earner department.  The new business intake process is one of the only opportunities you will get to obtain client information from your professionals and as a result it should be a succinct exercise in intelligence gathering.  Focus on getting data that ONLY your professional will know such as:

  • Strength of relationship
  • Why did the client choose our firm?
  • What are the critical business issues effecting the client?
  • Who was the person that introduced this business to us?
  • Which marketing or business development initiative contributed to the success of winning this work?

Ok, the last one might be reaching too far, but it doesn’t hurt to ask!

2) Demonstrate the benefit of capturing the information.  If we can design reports that show which channels and which referrers are generating the most business across the firm then it stands to reason that by giving them something that they value, the professionals are much more likely to start giving something in return.

The key point is that, New Business Intake is NOT an administrative process.    This is the point at which your information management relationship is the most critical and it has all the positive attributes that an information capture process could have:

  • Professionals have to do it – to get a client or job number
  • Professionals want to do it  – to get paid
  • It’s not difficult

So there really is no excuse for NOT implementing an effective referral management process and the real point is, in the current economic climate can you afford not to?

Watch out for our Golden Rules on Referral management and the latest instalments of Dear Data Diary.