Developing a CRM Strategy in Your Firm

Size up clients to build a competitive advantage.


When a customer relationship management (CRM) strategy is integrated with a firm’s overall strategic plan, it helps the firm perceive and respond to business and economic trends.

CRM strategy starts with an understanding of a firm’s clients that is derived by collecting client data and converting data to usable intelligence about your clients, their industries and the markets you have the potential to serve.

A successful CRM strategy requires a supportive organizational infrastructure, a client-centric culture and formalized business processes. CRM implementation must be marketed internally to ensure that all functional personnel use and regularly update client information.

The CRM strategy supports the overall business objective by building and leveraging client relationships for a sustained competitive advantage.

A CRM initiative that is supported from the top and has implementation champions with power in the trenches will result in improved revenue and profitability and move your firm toward its strategic vision.

Walfried M. Lassar , Ph.D., is Ryder Professor and chair, Marketing Department, Sharon S. Lassar , CPA, Ph.D., is director, School of Accounting, and Nancy A. Rauseo , Ph.D., is a marketing instructor, all at Florida International University in Miami. Please send comments to .

C PA firms are witnessing firm-changing trends like consolidation, globalization and outsourcing, staff shortages, and the explosion of niche practices that are contributing to the need for effective customer relationship management (CRM) systems. CRM is not simply a software application for tracking client data and activities. It is a strategic tool firms can use to leverage proprietary information to identify cross-selling opportunities, new prospects, and potential conflicts of interest or independence issues. By developing a deeper understanding of your clients—their industries, markets and relationships—through CRM, your firm can gain a sustainable competitive advantage in challenging times.

This article explains how a successful CRM approach builds on a strategic vision that integrates people and processes with technology to maximize a firm’s investment. When companies design their business processes to accomplish their strategic goals, and identify how and where CRM technology will be used to add value to the practice, employee buy-in is more likely and CRM is viewed as more than just another administrative task or software application.

CRM gained recognition in the mid-1990s as an information technology tool used to collect and share client information. However, success in implementing CRM seemed to elude companies that employed it solely for those purposes. According to many CRM researchers, the main reason companies failed to implement CRM was their inability to develop and effectively implement a strategy for relating to clients. A CRM initiative must provide a firm with the decision-support tools needed to be strategic—whether in identifying new clients, more profitable existing clients, or new services.

Strategic CRM looks at what client information means and how it can be useful for developing a better business. It requires a customer-focused culture that promotes customer satisfaction, the sharing of customer information and its conversion into useful knowledge.

Organizational Paradigm Shift

Studies show that successful CRM improves both revenue and profitability. A study of senior managers in 342 U.S. firms found that organizational structure, supplemented with incentives and accountability, was the most important element to achieving strong performance (“Creating a Superior Customer-Relating Capability,” MIT Sloan Management Review , Spring 2003, page 77) followed by an organizational culture that is focused on developing and sustaining customer relationships.

Another study showed that effective CRM processes resulted in firms developing and maintaining customer relationships that improved performance (“The Customer Relationship Management Process: Its Measurement and Impact on Performance,” Journal of Marketing Research , Aug. 2004, page 293). The CRM technology itself did not affect performance. These empirical results suggest a firm should start with a strategic understanding of what CRM should do for the firm and then integrate the initiative with the firm’s organizational infrastructure.

A key goal of CRM is to develop a view of the client from all angles or areas of the company. This means continually learning about your clients. Data obtained from each client interaction must be electronically stored so it can be shared among employees within your firm. This can be a challenge when there are high numbers of clients or industries, the business is seasonal, and/or many employees access the same records. Before considering CRM technology, accounting firms should identify the client information they need and how it will be used to manage customer-related activities.

The simplest form of client data is contact data. This includes full names and addresses, as well as each person’s position and role in the decision-making process within the client’s business, such as buyer, influencer, approver or gatekeeper. Contact data may prove important as clients’ employees advance in their careers and their influence over company decisions increases. Knowledge of clients’ employees will help embed trust in the relationship and give firms the ability to anticipate client concerns, needs and preferences, even when there is personnel turnover at the accounting firm.

Demographic data describe the characteristics and attributes of each client, such as industry, form of entity, fiscal year-end, geographic dispersion of client offices, regulatory requirements, size, operating styles, propensity to switch, and the client’s value to the firm. This data can be used to develop client profiles and benchmark them against industry trends as well as profitability targets within the firm.

Jennifer DenOuden, marketing director for Beene Garter LLP, an accounting firm in Grand Rapids, Mich., and a member firm in Moore Stephens North America, says demographic data helped her firm identify market opportunities. “The analysis of demographics for our client base in the health care industry compared to the overall demographic census for the industry identified a service gap for us in the Eastern Michigan market,” she said. “We were able to identify prospects in a geographic area that we had not previously considered.”

Transactional data focus on historical events and describe the relationship with the client. This information includes client activity outcomes such as how and through what areas/departments your firm interacted with the client, what services the client has purchased, and which sales pitches did not result in client engagements. It also includes the client’s payment history and the value of the overall account, and information on how frequently the client contacts your company for services and their latest engagement. Properly processing these transactions will help effectively manage the client relationship. This type of behavioral data will help you understand your clients’ personalities, preferences, needs, motivations and expectations.

Finally, your firm must collect relationship data. Relationship data identifies interdependencies and potential conflict issues. A critical source of client intelligence is what you know about the relationships in your firm’s network. Relationship intelligence is an asset that generates ongoing sources of referrals and leads.

Analyzing and interpreting client demographic data can help you uncover relationships among stakeholders, proposal histories, or new business referrals that can be helpful for developing fact-based strategies to gain a competitive advantage over other accounting firms. Distributing this intelligence throughout your firm will improve decision making regarding potential markets, clients to pursue, and services to promote. Relationship mapping enhances the firm’s ability to uncover business opportunities and best referral paths. Identifying a client’s banker, lawyer, board members, or any other relationship in the client’s network can lead to cross-selling opportunities as well as cross-ownership of entities and potential conflicts of interest.

Firms frequently and mistakenly equate customer data, or objective facts about events, business or people, with client intelligence. Client intelligence is the compilation of data, information and knowledge about a client. Developing client intelligence begins with a general assessment of your current firm-client situation and is based on a collaborative and cross-functional team effort. Your assessment team should be able to answer these questions:

What do we currently know about our client(s)?

What don’t we currently know about our client(s)?

What do we think we need to know about our client(s)?

Client intelligence is the core of successful CRM implementation with its foundation—client data—being one of the biggest challenges for CRM success. “Client information is only as good as the integrity of the underlying data,” says Hortensia Sampedro Hacker, director of marketing at Morrison, Brown, Argiz & Farra LLP, a large regional accounting firm based in Miami. “Attention needs to be paid to the input in order for users to trust the client intelligence.”

To overcome the client intelligence barrier, some firms have found privilege controls and peer pressure are effective tools for encouraging users to collect and record client data. A privilege control might include establishing billing codes only upon updated CRM entry of all contact and lead information. Peer influences can be exerted through management meetings in which discussions on continuing engagements and leads are restricted to those clients or prospects for whom data have been updated. Managers may be more likely to comply with firm standards and processes when noncompliance is revealed to colleagues.

CRM information can create value only when client databases are current. The process of ensuring that new client information is updated immediately in the CRM database is particularly challenging in busy season. One solution may be the adaptation of best practice in other industries—sharing of certain files and asking clients to update their own records. Firms should collect only useful information. Track the level of use for each data field and evaluate the relevance of what information is collected. Audit subsets of the files each year and consider purging inactive records.

CRM visionary Martha Rogers of the Peppers and Rogers Group once said in an interview: “ The real competitive advantage now is using the information we have about each customer to build customer value by changing our own behavior to deliver value to that customer .” Client intelligence is a critical part of successful CRM implementation. The integration of people and business processes, with an organizational and strategic commitment to customer relationships, makes it possible to devote the right services (including money and time) to the right customers.

Most CRM applications require firms to be process-oriented. In other words, firms need to see their business in terms of documented and customer-focused work processes, organize tasks around processes rather than job functions, structure teams around these processes, and measure process performance. Process orientation enables automated workflow and tracking features that make CRM more effective. It is at this point in a CRM initiative that many firms realize that they don’t have the well-defined processes needed to implement CRM technology.

Firms are at different levels of formalizing their business processes. Differences in process orientation may even exist among a firm’s various services and functions. For example, variations in process orientation often exist in sales functions. Veteran partners with established books of business and practices may resist process change and standardization, but other firm members may benefit from a standardized set of processes for lead generation, proposal development and engagement commitment. A firm, therefore, can have formal processes in place for sales but adapt these for veteran rainmakers. Flexible processes with specific requirements are crucial because they allow executives to perform using processes that have worked for them in the past and help newcomers get up to speed faster.

Formalizing the sales process helps manage client relationships, revenue goals and staff scheduling. A relationship manager can be assigned to each prospect, and each stage of the sales process should be recorded. A record of a signed commitment can be integrated with staff scheduling. Longer-term revenues can be predicted with information on prospects, the stage of the sales process for each and win ratios (the ratio of signed engagements to total proposals). Variations in win ratios can be investigated to determine whether pricing, expertise or breadth of service resulted in closing or losing deals. Relationship managers can be debriefed to identify additional information or processes the firm should capture with its CRM system.

A key challenge in implementing CRM technology is end-user adoption. Companies that have successfully implemented CRM encourage end-user adoption by designing their business processes first ; then they identify how and where the technology will be used to facilitate the redesigned, value-added business processes. This allows the company to train employees on process rather than technology , so they understand their specific roles in the redesigned process. The business processes are what create value. CRM technology enables the delivery of the business process.

Strategic CRM creates client intelligence and aligns business processes. Successful CRM implementation, however, requires the commitment of the firm’s partners and executive staff to CRM and client-focused leadership. Successful CRM needs:

Purse strings or financial support . Leaders must be willing to invest in technology and hire or reallocate personnel to implement the CRM strategy.

Passion . Leaders must display a high level of advocacy and enthusiasm for CRM. How excited do they get when they talk about CRM? Leaders must be heavily involved in the design of the CRM vision and strategies.

Practice . Leaders need to be involved in the CRM implementation process. Firm employees will adopt CRM when they see partners’ commitment. This means using the system: entering information and sharing knowledge.

Patience . Leaders cannot expect CRM to be built in a day. It takes time, practice and learning.

Persistence . Leaders must stay focused on CRM every day and keep CRM processes current, regardless of how busy the season.

Jessica Levin, manager of communications and member services for Moore Stephens North America (MSNA), says even the best leaders lose enthusiasm for CRM when limited resources are spread thin. “For a firm to be successful, resources are required such as a database that consolidates all existing pockets of information and makes it available for everyone in the organization,” she says. “Dedicated resources should include a CRM manager. Whether it’s a full-time or part-time employee, or an intern, at least one individual needs to be assigned to focus on the project and become intimately involved with the data.”

A CRM manager is critical to the program’s success, Levin says. “This person needs management’s support so that when data is requested from partners, everyone understands this is a firm priority.”

Clearly, an organizational infrastructure is needed to maximize the return on your CRM investment. Implementation should be managed carefully with clearly defined, step-by-step deliverables and objectives that encourage employees to collaborate in building and using the client intelligence gained through CRM.

Some firms develop an internal marketing campaign to “sell” CRM within the firm. Start by identifying and understanding the needs of those you need buy-in from (such as management, IT staff, different users or departments). Then determine how each group can potentially benefit from CRM, both organizationally and personally, and identify people who can influence users. Finally, develop incentive programs to motivate use of CRM-related processes.

DenOuden of Beene Garter designed an internal campaign to clean client data in the firm’s CRM system. “Teams were assigned ‘homework’ on client records and the software tracked who entered updates,” she said. “The contest mirrored components of the Olympics and was called ‘Go for the Gold’ to tie into the software name, GoldMine. At the closing ceremony, the best-performing teams received ‘gold’ medals and gift cards.” The success was remarkable; the database was cleaned relatively quickly. More importantly, users’ attitudes toward the system changed from anxiety associated with entering data, to familiarity with CRM that spawned adoption and continuous use.

To achieve success with your CRM initiative, communicate the goals to everyone involved and keep them up to date about the initiative plans, who’s affected, and when and how changes will occur. Ongoing training can facilitate communication.

Some firms use weekly workshops to help employees become comfortable with the CRM initiative. At Beene Garter, employees are trained during the summer on new standards, such as developing and using new client data that will be crucial for entering a new niche market. “Employees are trained [to recognize] why each new piece of client information is important and how it will be used to pursue new business opportunities,” DenOuden says. “As clients or industries change, so does terminology and business practices.” The firm provides periodic “refresher” training sessions so that new data needs or terms can be described and shared.

CRM starts with a business strategy, develops a 360-degree understanding of the client, and enables effective and efficient business processes integrating people and technology, continual learning and dynamic application of customer intelligence to further the business. Overcoming the challenges in successfully adopting CRM begins with embracing CRM as a prerequisite for realizing your firm’s vision, not just as a technology solution. “At the end of the day, it does not matter how sophisticated your tools are to collect the necessary information,” notes MSNA’s Levin. “It all starts with buy-in from firm leadership. If you don’t get its ongoing support to use CRM as a means for opportunities and continued growth, a firm will lose its competitive advantage regardless of how sophisticated its technology is.”

Is CRM Worthwhile?

Research in other industries suggests a payback of up to 400% over the full life cycle of a carefully planned and consistently implemented CRM initiative (“CRM Systems: Necessary but not sufficient. REAP the benefits of customer management,” Journal of Database Marketing , March 2002, page 267). Changes in the accounting marketplace may make it necessary to develop CRM strategies to face sophisticated consolidated competitors, to stay close to clients in the face of outsourcing and employee turnover, and to develop new cross-selling or niche service offerings to grow the firm. The exercise of developing CRM strategies and processes for externally understanding the market and internally structuring the business workflow will contribute to your firm’s success.

Assess Your Customer Relationship Management Readiness

4 = This statement is Very Descriptive of our firm environment
3 = This statement is Largely Descriptive of our firm environment
2 = This statement is Partially Descriptive of our firm environment
1 = This statement is Not at All Descriptive of our firm environment

Strategy and Organizational Alignment

1. My company has a clear view of the customers it wishes to serve and not serve.

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2. My company works together in cross-functional teams to better serve our customers.

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Customer Intelligence

3. We can differentiate our customers based on their value to our company.

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4. My company is clear on what we know and don’t know about our customers.

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5. My company has business processes in place to provide relevant, accurate and up-to-date customer data and information to all appropriate staff.

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6. Process outcomes are formally measured and communicated regularly.

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7. My company has eliminated duplicate systems entry and re-key of customer data.

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8. My company has the technical competence to assimilate the information needed for our CRM strategies.

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9. Customer-centric performance measures are used to gauge employee performance and compensation.

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10. Accountability and responsibility for tracking key customer metrics are clear and well-known by all employees.

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Your Firm’s Readiness Score

If your score is below 32 points or if you are interested in learning more about your firm’s CRM capabilities, we suggest you fill out the complete online questionnaire, and we will provide you with an analysis that benchmarks your firm against others in the accounting industry. The complete questionnaire can be found at .


JofA articles
"Test Your Information Security IQ," July 08, page 50
"The Human Element: The Weakest Link in Information Security," Nov. 07, page 44
"Get Close to Your Clients," June 06, page 49


Management: Leading & Collaborating in a Competitive World , by Thomas S. Bateman and Scott A. Snell, The McGraw-Hill Cos. Inc., 2007



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