When the experience of novice entrepreneurs lack the scarcity of contacts, may cause many difficulties, so the novice entrepreneurs to learn when the experience, learning the business must comply with the principles of entrepreneurship, let's take a look at some of the entrepreneur must comply with the principles of it.
ASPEN LAW & BUSINESS R EPRINTED F ROM J UNE 2001 V OLUME 4 I SSUE 6 The CPA’s definitive resource for firm management and administration Maximizing Your Return on Relationship Investments Using CRM to achieve results ratchet up revenues generated from B asic business principles dictate that through professional associations, to name investment should be made in a few. Firm marketing departments take relationship development activities. those assets that promise the an active role in relationship development through marketing campaigns, staging Internal information about people, greatest return. An accounting firm’s client events and gatherings, newsletters companies, relationships, experience most valuable assets are its professionals development and other targeted activities. and expertise represents competitive and the relationships they forge with intelligence that can be used to differ- clients and prospects. After all, the However, relationship development entiate your firm from the competition, accountant’s role as the most trusted advi- activities should not be confused with sor is the source of all revenue generation. source new revenue opportunities and relationship management activities, just enhance client service. A cultural recog- It follows that to generate the greatest as asset development cannot be confused nition of this fact, coupled with a strate- possible revenues in this highly competi- with asset management. Unless the activ- gy to leverage this competitive intelli- tive era, smart firms will focus with laser- ities that a firm undertakes to develop and gence, are prerequisite to maximizing like attention on their client and prospect maintain its client relationships are being your return on relationship investments. relationships and invest wisely in them. managed and harnessed for competitive These relationships must be targeted advantage, the return on investment for To succeed in your relationship man- with an established client relationship those activities will not be fully realized. agement strategy, technology is essential. management (CRM) program in the Most firms currently don’t possess the For instance, a professional may sit on tools necessary to facilitate relationship firm. CRM is more than just fostering the board of a charitable organization new prospects, it is making these rela- management-oriented business practices. and, as a result, develop new relation- Information about people, companies, tionships work to the firm’s advantage. ships. If this professional has sharpened For the most part, clients don’t find pro- relationships, experience, and expertise is rainmaking skills, he or she can win over fessionals in the yellow pages. They seek maintained in a vast assortment of dis- some of those new relationships as clients. referrals from friends, business associ- connected silos, from individual contact ates, colleagues or relatives. If the rela- However, a relationship manage- managers, Microsoft Excel spreadsheets, tionships aren’t established, prospects will ment approach to new business devel- Access files, and marketing databases to have no way of finding you, or you them. opment implies a cultural and techno- time and billing systems, HR applica- logical strategy aimed at maximizing the tions, and other enterprise systems. Relationship Development vs. return on business development Indeed, much of this internal competitive Relationship Management efforts—not simply achieving a return. intelligence is stored tacitly, in the heads Accounting firms invest in relation- A relationship management strategy is of individual professionals. But without ships in a myriad of ways. Professionals necessary because a firm must recognize a centralized system to aggregate this prospect for new clients through active that collectively, who it knows and what intelligence, manage it, and deliver it to participation in the community, through it knows constitute valuable firm assets. professionals when, where, and how they their existing client relationships, and If leveraged properly, these assets will need it, it has little practical value. This article is being reprinted with permission from Aspen Law & Business, 1185 Avenue of the Americas, New York, NY 10036. For subscription information, call (800) 638-8437 Illustrating the Benefits of strategy for responding. Had this nal cultures conducive to relationship man- a Relationship occurred, there is no doubt that the firm agement, until recently the penetration of Management Strategy would have won the business. infrastructure-supporting CRM software The difficulties of effectively man- into the accounting space has been dispro- A relationship management strategy aging relationships without a central- portionately low. The reason is simple: provides numerous real, definable benefits. Most CRM software providers design their ized solution become evident in the fol- Among the most obvious, it enables profes- offerings for traditional Fortune 1000 cor- lowing war story, which occurred sionals to leverage who and what they porations—organizations that market recently at a Midwest accounting firm. know for business development purposes. physical products (or simple services), A CPA firm had recently acquired a It will also help alleviate painful, embar- which are sold by dedicated sales forces multidisciplinary practice in the execu- rassing situations. Figure A displays how a using predictable, repetitive sales cycles. tive staffing industry. As it happened, the CPA firm also provided staffing ser- CRM program helps answer the key ques- These companies also employ call centers vices internally. Shortly after the acqui- tions of: Who else do we know at the client and support centers to field customer sition, a prospective client contacted a company? Who else in the firm knows the inquiries and provide customer support. partner at the CPA firm, seeking help client/prospect? What other engagement Moreover, security and privacy concerns finding a chief financial officer for the have we done in this industry? are virtually nonexistent at traditional cor- company. The partner and his team porations, as no fiduciary relationship assembled a staffing proposal and sched- Not All Relationship Management between customer and salesperson exists. uled a presentation at the client’s office. Solutions Are Alike Because of the value it delivers, CRM In contrast, the “product” that account- Meanwhile, unbeknownst to the part- software is one of the most rapidly ing firms sell is the experience and exper- ner, the staffing firm had also received a expanding sectors in the business-to-busi- tise of the professional. “Sales” are achieved request for proposal (RFP) in connection ness software marketplace. According to when professionals, themselves, success- with the same client’s staffing needs. That the technology research and analyst firm, fully leverage relationships to find new firm undertook a separate effort to put The Gartner Group, the market has engagements within existing clients and to together a proposal and also scheduled a grown from $830 million in 1997 to $3.7 obtain referrals for new business develop- meeting to make a presentation. billion in 2000. CRM developers, from ment. For successful implementation with- Siebel and Onyx on the high end to Act in an accounting firm, the CRM solution Each firm had quoted different fees must have a client relationship manage- for the services. The client was and Goldmine on the low end, are per- haps the best known of literally hundreds ment focus. It should be capable of captur- impressed with both presentations and ing, aggregating, and delivering informa- narrowed down the field of contenders of vendors vying for this lucrative space. tion about the complex Web work of to the two firms. However, when the Even though accounting firms have relationships that operate at the sacred cen- client found out that the CPA firm and increasingly committed to building inter- ter of accounting firms. executive search firms were affiliated, the client became angered and chose not to give either firm its business. The lack Figure A of communication and disparity in pric- ing killed the deal. How could this scenario have played out had this firm implemented a rela- tionship management strategy? It might have turned out like this: The lead part- ners from both firms would have done some quick due diligence using their CRM software. By entering the client’s name, the system would have revealed who else within the firm was acquainted with the client, the nature of their rela- tionship, along with other valuable information such as history of the client, billing information etc. Each partner would have instantly been made aware of the potential conflict. They could have consolidated and coordinated their 2 Partner-to-Partner Advisory To Order Call: (800) 638-8437 CRM solutions possessing a profes- management culture, however, it also CRM vendors must incorporate wire- sional services firm focus do exist. One can be an impediment if it is difficult to less devices and other platforms into example is Interface Software’s Inter- use. Professionals don’t care where the their strategies. Accordingly, the CRM Action. Jim Butler, a partner at Jeffer data comes from. When they think of a solution chosen should complement the Mangels Butler & Marmaro in Los client, they don’t think of accounting firm’s knowledge management strate- Angeles, CA, says that InterAction has software or contact software. They’re gy and be able to deliver critical rela- been critical in helping him forge strategic concerned with the things they need to tionship information to these systems. relationships and leverage those ties. know about that client. Knowing that subtly connected informa- Stepping Up to the Challenge tion can often lead to enormous revenue Knowledge management systems increasingly are becoming important Mainstream Fortune 1000 companies generation, Butler relies on his CRM solu- for the delivery of mission critical infor- have long embraced the strategy of rela- tion to help sift out opportunity. “On a mation to users in a user-friendly envi- tionship management to maximize their basic level, whenever I have a meeting, ronment. Accounting firms can give returns from customers. Doing so was nec- the first thing I do is understand how long professionals access to information they essary as market globalization and industry I have known this person, where we met, need via portal products, Intranets, consolidation created intense competition. the nature of the relationship, and whether it’s personal or business. Extranets, and even devices that pro- The accounting industry now faces “Beyond that, whenever I travel, I fessionals are already comfortable using, similar pressures, and must step up to can see who else I know in the same city, such as Palm Pilots and Blackberries. the challenge. Firms must respond in order to arrange a meeting. I regular- (A Blackberry is a wireless device that strategically and aggressively, or suffer ly look for clients who might benefit looks like a pager, capable of sending the consequences. To thrive in the new from a particular idea or who ought to and receiving emails via its wireless economy, firms need to be smarter about be introduced to whom. We believe in modem. Blackberries are growing in how they create and leverage relation- trying to make deals happen and help- popularity and are increasingly becom- ships in order to garner the greatest pos- ing our clients achieve their goals.” ing standard issue at many profession- sible return. Instilling a culture com- al services firms because of their ability mitted to relationship management and Anytime, Anywhere, to keep professionals in touch.) These supported by relationship management Knowledge Delivery devices increase in value to the profes- technology is one of the most important CRM is an enabling technology to sional when other information, such as moves firms can make to achieve and firms that have embraced a relationship relationship data, can also be accessed. maintain a leadership position. 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