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How Does An Institutional Investment Firm Benefit From a CRM?

By: Gui Costin

Originally posted on September 24, 2020
Last updated on April 27, 2022

A CRM is far more than a database of accounts and contacts, but most people confuse the true purpose of a CRM. While it’s nice to have salespeople adopt it, upload call notes, and capture their email communication, those are all nice to haves.

When it comes to investment firms, a CRM is more than just a database or a place to log notes; it is the lifeblood of your company, driving new business and allowing substantial growth over time. In a way, it acts as the primary operating system of your business.

How does a CRM act as an operating system?

Since your prospects and customers are the ones who drive revenue to you; they are the most important aspect of any business, and if you have an accurate, up-to-date, and constantly growing CRM, you can create great efficiencies and leverage the time and talent within your business in order to best serve those customers.

A fully loaded, up-to-date CRM will allow you to exponentially grow your investment business.

Here are just a few steps you can take to implement a CRM that will help you not just maintain stronger relationships with your current customers, but ultimately move your business forward, helping you drive revenue growth where you might be struggling. 

Let’s start with what I call the Law of Zero for investment firms. Simply put, for most investment firms, there is no difference to the business between managing $100 million, $1 billion or  $10 billion. Meaning, there is such scale in the investment business that adding a zero or two doesn’t materially impact the business (i.e; you don’t necessarily have to hire more people), unless you have capacity issues. Even then, the difference between managing $100 million and $1 billion for a small cap manager doesn’t materially affect the business in terms of hiring.  

However, the revenue difference between $1 million, $10 million and $100 million is extreme. The incremental revenue goes directly to the bottom line.

How do you add those zeroes? Simple, a bigger top of the funnel. A well-organized and frequently updated CRM is the foundation you need to continue to expand the top of your funnel. Your TAM (total addressable market) is the key factor that will drive revenue. The more qualified buyers you have to call on, the more opportunities you will have.

Here are a few steps you can take to get there:

  1. Demo a few CRMs that stand out to you and your team.
  2. Compare the offerings, pricing, and other needs internally.
  3. Select one that you like and implement it. (We know this part is easier said than done, but it will be worth it in the end!)
  4. Customize the fields in your CRM for greater efficiencies.
  5. Input/Upload your accounts and contacts.
  6. Subscribe to an institutional database to rapidly build your data. This takes some of the impetus off of your sales team and allows a greater influx of new accounts and contacts.
  7. Build a team to keep your CRM updated.
  8. Add new allocators daily/weekly.
  9. Keep your email lists refreshed. (We recommend a service like NeverBounce to purge bad emails and keep things as up to date as possible.)
  10. Remember that an updated list is just as important as a clean one. There are services for this as well, and here at Dakota, we use Rocketreach to find new emails every week.
  11. Create Pipeline Reports and Scorecards to manage your data. You’ve got a great system in place, and now the key is to use the data and reporting within it to continue growing your business. 

Does a CRM really matter?

A CRM can often be seen as a dirty word in the world of sales. For many salespeople it can be seen as a hassle because it requires them  to enter and maintain detailed information, which often takes time away from planning and holding meetings. However,  when properly implemented and set up,  a CRM is a tool for exponential growth for your business and salesperson.

Here at Dakota, we have embraced the true power and importance of a CRM. That is, we know that it’s about far more than just keeping track of calls; it’s about having a large total addressable market to give your salespeople and your company extreme leverage. This way, they only spend their time making calls to people who are already qualified buyers.

A well-maintained CRM can give your sales team up to five times their typical level of productivity, simply because they're not wasting time looking for people who buy what you sell. The secret to growth for any business is the Total Addressable Market (TAM), and your CRM is the foundation needed to fuel that growth.

Ready to start driving your business forward with a CRM? Check out our list of the top 15 CRMs for investment firms.

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