Putting The 'Relationship' Back Into CRM

By Richard Karpinski

How does CRM change when the "C" refers to a "client" rather than a "customer?"

That's the challenge that professional services firms face when deploying traditional customer relationship management (CRM) technology.

Such organizations -- including law firms, accounting shops, consulting firms, financial advisors, and the like -- don't deal with customers in the same way as a product-oriented manufacturer or retailer. There, the focus is on closing a transaction and generating more transactions. In the professional services world the focus is more on creating and maintaining a relationship that typically turns not into a single deal but an ongoing connection that yields billable hours -- again and again.

One vendor that has been mining this area of the CRM world with some success is Interface Software. Originally, the company did consulting and custom development work, but later began to create and sell software, initially building a CRM platform for the legal industry. It's since broadened its focus to any professional services firm -- it hopes to get half its revenues outside the legal profession this year -- and this week released the latest version of its CRM platform, Interaction 5.

Relationship Intelligence

Interface delivers a platform for creating what it calls "relationship intelligence." In a services environment, CRM is less about managing a sales pipeline or tracking a customer open case than about maintaining a database of client intelligence that can be used -- and shared -- to create a closer relationship and ultimately more business, said Rick Klau, Interface's vice president vertical markets.

"Professionals are relationship managers," said Klau. "They don't do sales in the traditional sense of the word, and even if they did they wouldn't admit it. The traditional vision of CRM doesn't fit this market."

Professional organizations face some unique challenges. They typically don't have a traditional sales organization or call center. Partners or associates do their own selling. Sales cycles aren't cyclical or repeatable. For instance, legal problems don't occur on a regular basis -- hopefully. Professionals -- perhaps even more than a traditional sales executive -- often have even less motivation to actively participate in a CRM program. They are too busy doing their work -- writing briefs, pleading cases, preparing audits, or trading stocks.

"It's all about relationships," said Klau. "It's not about managing a deal pipeline."

At the same time, professionals can be very protective about their business relationships. They literally are the "sum of all their relationships." In some instances, that can lead to information hoarding. Yet at the same time, relationships are really of little value in the services world unless they're fully leveraged. So a services-sensitive CRM platform must protect privacy and limit the sharing of sensitive data while making it as easy as possible for colleagues to mine firm-wide relationships as much as possible.

A Different Kind Of CRM Platform

Interface has built a CRM platform that works in just this sort of environment. InterAction 5 focuses on four key business processes that services firms rely on: relationship discovery, or the ability to see and take advantage of existing relationships; relationship management, tools to maintain client data; client services automation, processes for creating relationship-based marketing programs; and knowledge delivery, ways to integrate the CRM platform with existing systems like PIMs, portals, and corporate intranets.

The latest version of Interaction offers some new features to fine-tune this concept of relationship management. An improved user interface and better integration with IBM's Lotus Notes and Microsoft's Outlook automates many data collection processes. A new project-based architecture makes it easier to gather up resources for a specific project or client engagement -- rather than just focusing on individual client data.

On the IT front, the new release includes new data quality and change management tools that help companies guard against bad data that might corrupt their CRM records. The new functionality includes support for business rules that can be used to review, accept, or reject changes, significantly cutting potential data problems.

Features worth noting include My Watch List, which tracks all past and future activities and changes made to key contacts; Relationship Map and Who Knows Whom features, which make it easy to trace relationships within a firm; and Application Collaboration, an interface for interfacing with other back-office systems such as email, billing and other systems.

What Customers Say

Cynthia Reaves has used InterAction at her last two law firms. Currently a partner at Detroit-based Homigman, Miller, Schwartz and Cohn, Reaves' specialty is health law. When Reaves moved to her new firm, she brought along 2,000 contacts, which she immediately imported into the firm's InterAction database. That about equaled the 2,000 health law-related contacts her new firm already had, immediately setting her up as someone to contend with in her new firm.

"I tend to be a type A personality," Reaves said. "I always like to keep things organized and easily accessible, it really complements the way I practice law."

Through experience, Reaves has learned that new business in her profession doesn't come easily. It's an accepted wisdom that "clients typically don't respond until the sixth touch," she said. "It takes that long to get something billable and a return on your investment. A lot of law firms way away from opportunities to generate additional revenue from existing clients."

Reaves and her firm have created a custom template for entering new client information into the system, including a detailed classification system that helps them slice and dice data later on to uncover new connections between clients. Lawyers hand off data to their assistants who enter it into the system.

For Reaves, hoarding client data is the furthest thing from her mind. Instead, she says the key to being successful in her industry is "leverage."

"If I can get three or four other people working for my client, there's more money coming into my firm and more money to spread around to everybody."