Microsoft Outlook moved down to second place — overtaken by Redtail — in the CRM software category this year. It was the first time in the history of Financial Planning’s annual tech survey that Outlook was not in first place.

When asked what CRM software they used, 32% of respondents said they used Redtail, vs. 23% for Microsoft Office.

“I think there’s a couple of things going on,” explained Joel Bruckenstein, author of the forthcoming Tech Tools column for Financial Planning and president of Global Financial Advisors in Miramar, Fla. “Microsoft Office is not CRM because it doesn’t have a lot of the characteristics of CRM like task management, workflow management and business analytics.”

What’s most likely happened is that more advisors have caught on to the advantages of true CRM software, Bruckenstein said. In prior years, “People were perhaps not understanding the difference between what Outlook can do and a true CRM … so they were content with Outlook.”

Mike Woods, president of Stocker Woods Financial Inc. in Denton, Texas, says he never used Outlook like a CRM application and has been using Advisor’s Assistant since 2003. Still, he says plans to switch to RedTail within the next 30 to 45 days.

“If an advisor is using Outlook as the CRM, it likely comes down to them not knowing what they don’t know,” he said. “They either don’t realize what they are missing or don’t have a person on staff that can help them launch and utilize it and, thus, they’re nervous about taking a leap to set up a CRM.”

“I can’t imagine not having an integrated CRM for our day-to-day operations,” he added. “It is one of the most vital pieces of software that we use.”

This year, there’s been a lot of publicity about the benefits of CRM software and how it can help advisors run more efficient practices, Bruckenstein said. That’s made many more advisors aware of the advantages, “and they’re starting to adopt CRM in greater numbers,” he said.

And why has Redtail in particular done so well?

“It’s cloud-based, which means you can turn it on and off at will, all you need is a credit card and you can be up and running in no time. You don’t need software,” Bruckenstein said. “You can access it anywhere, anytime.”

Also, Redtail, at $65 a month per database (a typical database can accommodate 1 to 15 users) “is very inexpensive,” according to Bruckenstein. “Particularly if you have three, four or five people on the system, or 10, Redtail is hard to beat price-wise.”

For more details and insight, please review the full version of Financial Planning’s 2011 Technology Survey.

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