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“How you gather, manage and use information will determine whether you win or lose.”
Your client database is the portal for all information about your customers, and, as such, is one of the most important tools for your business to run and develop effectively.
There are many different forms of database available and the one you choose for your business should contain features suitable to provide value to your clients along with enabling you to maximise your efficiency.
CRM
Customer relationship management systems – dedicated software platforms designed specifically to manage interactions with customers.
Excel spreadsheets
An option that allows financial advisers to create and manage their clients using the flexibility of spreadsheets.
Databases
These can be online, custom-built or cloud-based, and are a centralised repository of information.
In this article, we will look at client databases in more detail, and answer the following questions:
How can client databases help you grow your business?
How do you choose the correct system for your requirements?
What add-ons are available?
What other considerations do I need to make?
If you are considering a new option for your business to enable you to have more control over how your clients are contacted, with what information, and the frequency, then this article may assist in your decision-making process.
How can client databases help to grow your business?
Every business needs to be able to keep track of its clients. Information like contact details are, of course, necessary to log, but how else can client databases benefit your business?
Let’s have a look.
Extensive client data
A database enables businesses to have a comprehensive view of their customers, so they can log important information – for example, about their preferences (i.e. their preferred form of contact) or their history, which will, in turn, give valuable insights into their needs. Using this information, you can utilise your database to become a business intelligence source, and can hand-pick products that suit your clients best.
Improving client communication
A well-designed client database will enable you to manage and track interactions with your customers, including emails, phone and face-to-face meetings. In this way, the database becomes a vital source of information and the go-to resource for client communications. You can also save time by utilising automated functions including reminders and diary settings to ensure that clients are kept up to date with the latest, most relevant information.
Automate functions and increase efficiency
Client databases should enable you to automate some business processes, which will free up time and resources for other tasks. By simplifying and streamlining business activities in this way, you can focus on looking after your clients and providing the most value to them.
Improving customer experience
Storing information about your clients in an accessible form means that everyone in your firm can be consistent in the way they engage with them. This could be something as seemingly insignificant as your client preferring email contact rather than phone. It could also form the basis of a more personalised experience where products, services and insights are driven by your client’s known behaviours, preferences and activities. Looking after your clients in a consistent manner across your business can help to establish a strong client relationship.
Comply with regulations including GDPR
As no doubt you are aware, the General Data Protection Regulation (GDPR) is a privacy regulation in the EU that governs the processing and storage of the personal data of EU citizens. According to GDPR, organisations must ensure that personal data is processed in a manner that ensures appropriate security of the personal data, which is where having a secure system in place for storing your clients’ information is key. A simple password on an excel spreadsheet is not sufficient to comply. Ensure your clients’ data is secured with more sophisticated technology – for example, encryption.
What is the importance of using the database consistently and how do you ensure this?
The data in your client database is only as valuable as its accuracy and consistency. Everyone in your firm should use the database in the same way, with the same naming conventions and data formats. Guidelines and protocols for your staff around using the database, along with ensuring that everyone is fully trained to use the system, should assist with obtaining a uniformed approach.
Inconsistent use of a database can lead to problems with data integrity and accuracy. It can result in duplicate information or information that is conflicting, missing, or incorrect. This can make it difficult to update the data stored and make accurate investment decisions based on the data.
In short, the data needs to be good to be useful. Or, as the phrase goes, “Garbage in, garbage out.” In other words, the quality of the output is determined by that of the input.
How do you choose a client database platform that is right for you?
In order to choose a system that works best for your business, consider firstly what your requirements are. How many customer contacts do you have – 100 or 1,000? What technical elements are necessary to you? What systems do you have in place with which you will need the technology to be compatible?
There are a huge number of client database options available on the market, so it is sensible to have your own checklist of requirements to refer to before you are exposed to these.
When considering an effective client database, consider the following elements:
Security and confidentiality
The database must have security measures to ensure the protection of client information and comply with GDPR regulations. Look for a platform that has sophisticated security features – for example, encryption and access control.
Data management capabilities
The database should enable you to store, manage and analyse your client information (for example, financial goals, portfolio information and client communication) so you can use the information to provide the most value to your clients.
Customisable
You should be able to upgrade the database so it continues to suit the developing needs and requirements of your business. There should be sufficient storage and capacity to increase this in line with your business’s projected growth.
Capability to integrate
All your financial tools and client software should be able to integrate with each other for maximum benefit so, before purchasing a new database, ensure that it has this functionality.
Reporting and analytics functions
Using data to enable you to make informed decisions about business areas is key and a good database should be designed to provide you with this information. If your current database does not enable you to do this, it is worth considering changing it.
User-friendly interface
If you struggle to use the database, then it is unlikely to fulfil its potential. Check that the interface is instinctive and easy to use.
Cost
Before purchasing, ensure that you understand ongoing as well as upfront costs. Check also if there are any extra costs for customisation or integration with existing software.
Customer support
Does the provider offer training on using their product? If so, consider investing in this for all staff. (See the previous section on approaching the database consistently for why this is important.) Is there an ongoing support function available? Make sure you choose a provider that will offer help if you need it.
Choosing the right client database is an important decision for your business, but by considering the factors above you should be able to make an informed decision and select the most suitable option for your requirements and to maximise value for your clients.
Add-ons in software
Add-ons in software refer to additional features, functions or tools that can be added to a software program to enhance its capabilities and performance.
These might include:
Plugins – a software add-on that enhances its functionality, for example, Adobe Flash Player.
Mobile apps – a mobile app that will enable users to access the platform whilst on their mobile device and perform functions like data entry or reporting.
Integrations – connecting with other software, for example, accounting or data analysis tools.
In addition, another useful add-on (and one from which you might see an immediate impact on your business) is email marketing.
Email marketing add-ons
Email marketing add-ons typically include features such as:
Email campaign creation and management
These features enable the creation, design and distribution of email campaigns. The technology will manage the content, schedule when it is to be sent out and determine to whom it should be targeted. It enables specific, tailored content and therefore should ensure you are targeting the right client with the right information to provide the best service and value.
Email list segmentation
These tools enable the user to divide their email lists into smaller, more specific groups, based on particular criteria – for example, demographic, location or investment history. Using these tools enables marketing emails to be more relevant to their audience.
Personalised email content
This can include customised subject lines, product recommendations based on the client’s purchasing history or personalised images. As with email list segmentation, the objective is to provide the client with the most relevant and impactful email, show true engagement with them and therefore provide them with the most value from your email campaign.
Integrating your client database with a marketing automation platform enables businesses to combine the data you already have from your client database on customer interactions with the data you will gain from marketing and email advertising campaigns. This collaboration gives a much more detailed understanding of the effectiveness of your marketing strategy, enabling you to make informed decisions and continually improve your strategy through this additional information.
Research the key platforms
Here are a few pointers to keep you on track whilst you undertake this research:
Keep in the forefront of your mind your business requirements
Ask yourself: what is it that your business really needs? It is easy to get lost in the huge number of available options, so stay focused.
Consider your financial outlay
What is your budget and does the offering fit within that? Should you stretch your budget for a platform that will last you longer and, if needed, lead you through expansion?
Research the options available
Read reviews from trusted sources and case studies to see how the software has performed for businesses similar to yours.
Contact the vendor
And ask for a full demonstration or trial, so you can understand fully if the database meets your needs.
It is important to carry out your research thoroughly, as an effective client database can make a huge impact on the value of your business and relationship with your clients.
Conclusion
In this article, we have established the benefits of utilising an effective client database in your advice practice. Alongside playing a key role in streamlining your data management processes, it should also enable frequent and relevant client engagement, facilitate compliance and enable data-driven decision-making.
Choosing the right product to fulfil your business needs is crucial. Your database should fit all your requirements for now, but also those you anticipate will be required to ensure future growth, alongside having the ability to enable additional tools (for example email marketing and data analysis) when necessary.
Whilst purchasing a new system for your firm will involve an initial investment in terms of time and money, the right database will make it a worthwhile investment by meeting your unique business needs, managing your client data effectively, and encouraging strong relationships to be fostered with your clients.
Action points
These action points can each be undertaken in a short amount of time to start the process of considering a change of client database, and, even if you do not choose to change your system, hopefully completing each question will help to hone in on the useability of the product you currently operate.
Spend 10 minutes assessing the client database you currently use and if, after reading this article, there are any elements that might be missing and from which your business would benefit.
Look at options available on the market. Make a note of any that you feel might be an option to upgrade to and the reasons why.
Use this list of software options and read reviews online. Which products meet their objectives and which fall short?
Talk to others in your industry about the software they use to store client data and what works, or conversely doesn’t work, for them.
Before choosing and implementing a new client database, read our article “Measuring improvement” to understand how you can track and measure the impact of this important change on your business.
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Important information
This article is directed at professional investors and should not be distributed to or relied upon by retail investors.
This article is designed for use by and is directed only at persons resident in the UK.
The information contained in this article is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this article does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this article when making any investment decisions.
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