Following on from my last blog about Big Data, I thought it would be helpful to describe some of the things that firms can do to implement a plan for creating and managing the “building blocks” I described last time.

In this issue I’m going to speak about categorisation of clients, one of the most challenging issues for a lot of firms, but in equal measures, one of the most important things to get right.

The starting point for any strategy for improving the quality of client segmentation is to have a clear definition of the audiences in question (or “cubes” as I described them before).   This has to be articulated at a fairly granular level.  For example:

  1. Key Clients
  2. Current Clients
  3. Former Clients
  4. Key referrers
  5. Key targets etc.

One of the challenges that many firms face is that these audiences are often identified using what I would describe as a “custom-made” approach.  What I mean by that is, that certainly for key clients, there doesn’t seem to be a documented process for how this group is identified.

For example for Current clients what constitutes “current”?

To address this issue therefore the first step in any plan is to clarify the following for each audience:

  1. How is the audience defined?
  2. Where is the information that defines that audience going to come from?
  3. How is it going to be maintained?
  4. Who is responsible for maintaining it?

So the answers for Current Clients might be:

  1. Any client with “> than £X billing” or “> than zero activity in the last 2 complete financial years”
  2. Billing or time recording activity
  3. Automatically fed from the firm’s time and billing system
  4. It is automatically maintained because it is created as a result of professionals recording time for work (i.e. no new process needs to be created to specifically gather this information).

Once you’ve addressed this issue and clearly defined your audiences, the other challenge that many firms have is that CRM doesn’t really own the categorisation and therefore relies on others to provide that information, as in this example, the data is “owned” by finance.

So more often than not firms rely on a manual data entry model and as a result their data is often inaccurate and almost always incomplete.  Even the most staunch advocates for CRM will only be able to update their information as and when they have time and those that see no value in it won’t do it at all.

And this is the crux of the problem.

Those that see no value and don’t enter the information, will, as a result,  get no value out of a CRM system which is inaccurate and incomplete.

So firms have to find ways to gather this information from elsewhere and they have to think about the business processes that can contribute data and also they have to think about integration with other systems.

The advantage of automating the collection of this data, through integration for example, is that you can then of course start to become more sophisticated about how you segment because you’re no longer having to invest large amounts of manual effort to maintain your data.

You could start to categorise not just key clients, current clients and former clients of the firm, but start to consider these groups for specific offices or practice groups.

One of the interesting and possibly unexpected results that often arises from this, is that it becomes clear that CRM doesn’t need the actual billing information from finance at all.

Why show the actual $ value of revenue for a given practice group in CRM?   Finance are also, quite rightly, sensitive about this information being available generally around the firm.

If you’re clear that being categorised as a top client of the Tax practice, for example, means that you have to  have greater than $100k of revenue in any given financial year, then you don’t need to show the actual numbers.  If someone wants them then they can pull a more detailed finance report.

There are two other important things to consider when mapping out your audiences and data management strategy.

  • Who are the people that can provide that information?
  • What is the process for the provision of that information?

Firms often see these as the same thing and they’re absolutely not.  For example during new business intake most firms have a form which asks the person completing the form (usually a secretary) a whole stack of questions they don’t know the answer to.  As a result therefore the information is not accurate or complete as the process and the person have been confused.

The “process” requires that this information needs to be gathered but has made the wrong “person” responsible for providing it.

So in summary the key to success when it comes to client categorisation is to have:

  • clearly identified groups
  • a clear definition for how they are identified
  • a map of the information that will drive their categorisation
  • a plan for how that information will be maintained.

Most importantly of all however, you need to bear in mind that the data that you need to manage this categorisation probably doesn’t exist in CRM and cannot be managed manually (without unlimited resources) and therefore you will need to think beyond the CRM system and identify those systems and processes across the firm that can help you.

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