Mario Gallotto, director of sales administration at John Hancock of Boston, views customer relationship management (CRM) as a key way of retaining assets. In the past, only call center representatives used to rely on CRM, which Gallotto defines as a complete customer history.

Today, most fund companies have extended their customer relationship management systems to salespeople, Gallotto told Mutual Fund Market News's Lee Barney. Here, he explains how John Hancock's CRM system has been invaluable to the firm in retaining assets..

MFMN: How would you define customer relationship management, and what departments are typically tied together in CRM?

Gallotto: In the past, customer relationship management was strictly for service departments, or call centers. But things have changed. Over the past couple of years, firms have found a couple of other ways to use CRM, most notably by extending it to salespeople. CRM enables salespeople to do a lot for clients, who are the bottom line for us.

At Hancock, we sell to registered representatives and broker/dealers, and our CRM system contains detailed information on what they bought from us, what types of products they like. This enables our salespeople to know these clients.

A good CRM system will allow you to pinpoint client behavior, to see which clients may have bought a particular asset class. If you should develop a new growth product, for instance, you should be able to see from your CRM system which of your clients like growth. You can then start calling them, saying, "We know you have been in growth funds with your clients in the past, and maybe you have clients who are still interested. We have one of the top-performing funds in all of the industry. Would you be interested in getting your clients into it?"

That's one way for us to positively demonstrate personal knowledge to our clients. People value that.

MFMN: What are some of the key challenges that CRM has helped you address?

Gallotto: Keeping assets is a lot more difficult than finding assets. For me as a wholesaler to go out there and sell $1 million is a lot easier than keeping $1 million on my books. So, if I know who owns shares of funds, even if the client hasn't bought something in a couple of years, I can go in and say, "I know you own our regional bank fund. The fund's [performance] has only been so-so, but it's looking good. We are on the upswing. The manager is going to be in town. Do you want to speak to him?"

A good CRM system should enable a rep to discuss, in detail, exactly where a client's assets are, which products they own, and it should enable you to extract information from the data.

MFMN: What kind of information might you extract from the data?

Gallotto: How long certain firms keep assets with us. Some firms keep assets with us longer than others. There might be some reps at a client firm [who like] more of one product than another.

All of the key players at a fund company should have access to CRM, from executive management right down to the wholesaler, on their laptop and Palm Pilot. That enables the wholesaler, when visiting a client firm, to know exactly which reps in that office have assets with us, and what they've bought over the past year. It should also let you find clients who are market timers.

If he has a meeting cancelled, the wholesaler should be able to use the CRM system to look up other clients close by, by zip code or by town.

We also do compensation off the system. Other firms have built front ends to do the reporting, but we have a single system.

MFMN: In other words, your CRM is an overview history of your clients?

Gallotto: Exactly. It's not just historical sales. It also includes records of meetings, and details on clients, such as their hobbies, to make it easier for our reps to speak comfortably with clients.

MFMN: How has CRM improved in recent years?

Gallotto: These systems have been able to provide more information on specific things, to be all inclusive. There are fewer salespeople out there as resources, unfortunately, so the more information your existing wholesale sales force has on customers, the easier it is for them to do their jobs.

MFMN: Is it difficult to quantify the benefits of CRM?

Gallotto: Yes. In fact, upper management often asks what is the return on investment of CRM, and it is difficult to quantify. But customer retention is critical to us, which is one of the reasons we have made an investment in this.

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