CRM Helps De Novo Profit Amid Crisis

The Keller Group, an Irvine, Calif.-based investment manager (now known as First Foundation Inc.), was fed up with having to refer its customers to banks. So it decided to become a bank itself and obtained a charter in September 2007 -- arguably the worst time in 80 years to do so.

But Dave Rahn, president and COO of First Foundation Bank (FFB), says business has been good, and it's been all the better because of the de novo's customer relationship management (CRM) system. FFB, he explains, was blessed to start its life as a bank with no bad assets on the books and a parent with $1 billion in investment assets, 15 to 20 percent of which sought refuge in insured (bank) deposits during recent market turbulence.

Rahn's private bank, which has 23 employees, is the youngest of three sibling companies formed from the Keller Group. The other two -- First Foundation Inc., an adviser to those with at least $500,000 to invest; and First Foundation Advisers, which offers financial planning to those with more than $10 million to invest -- provided FFB with half of its initial client base, according to Rahn. He notes that over 20 years Keller had built a prospective client list of more than 6,000 names and that the group's investment advisory businesses served 1,000 customers.

To efficiently mine the best prospects from these lists, "Having CRM software was a central part of the plan from Day One," Rahn relates. With referral payments also an issue for the startup bank, on top of CRM software, he adds, "We needed to more easily identify who sent us business and the value of that business over time."

In order to begin mining the data, FFB first sought to consolidate it. But this was "no small task," Rahn says. He explains that the First Foundation advisory companies had "four or five" ACT! databases and, owing partly to disparate licenses for the software from Scottsdale, Ariz.-based Sage North America, eight different ways of recording customer information.

After evaluating six CRM solutions — including systems from Goldmine (Pleasanton, Calif.), Fidelity National Information Services (FIS; Jacksonville, Fla.), Advent Software (San Francisco), and Salesforce.com (San Francisco) — Rahn reports, the bank ultimately chose another Sage application, Sage SalesLogix, which was supplied by Infinity Info Systems, a New York-based reseller and systems integrator.

FFB's thinking, according to Rahn, was that sticking with a system from the same vendor would make the transfer of customer information easier. He notes, however, that staying with Sage's ACT! product wasn't really an option: "To share with others in the company [using ACT!] is very difficult, whereas with SalesLogix we have a single record, and we all can add information to that and look it up if someone calls," Rahn says.

Solution Requirements

While ease of information sharing was the No. 1 advantage offered by SalesLogix, the bank also required a product that would be supported by the vendor for the long haul and that would provide FFB with the ability to store customer information on its own servers, Rahn adds. This last requirement, he stresses, is particularly important to FFB's "deep-pocket" customers, who are extra sensitive to the security of their personal information.

In addition, "One of the main reasons we chose Sage was that we liked Infinity and its representative here," Rahn says. (An Infinity spokeswoman noted that the firm is keeping a dedicated FFB project manager on call "for life.") To deploy the software without Infinity would have been "very difficult," Rahn adds, noting that Infinity mapped the data from ACT! to SalesLogix; once the connection was established, the data transferred automatically.

Further, Infinity's pricing was "competitive," Rahn says. He explains that SalesLogix runs on a previously installed Windows server supported by a SQL database, with individual licenses installed on users' desktops. "Because this was a very big project it is not really possible to identify a cost other than licenses and Infinity's consulting, [which totaled] approximately $75,000 to $80,000," he says.

The investment in CRM, however, was "essential" to the bank winning as much business as it did, according to Rahn, who notes that SalesLogix went live Nov. 5, 2007, just one month after FFB opened its doors. He adds that the solution helped the bank build more than six times the required tier-one capital, at a ratio of 31.6 percent; by the end of 2008 FFB had $91 million in deposits and $93 million in loans.

At first, however, FFB received pushback from users who already were comfortable with the ACT! system, Rahn concedes. But, he adds, "The Infinity project manager and team flew out to First Foundation Bank to host in-person training and to convince users that a more comprehensive solution — SalesLogix — would not only make their lives easier but improve the business overall."

The bank and Infinity are now working to integrate the CRM application with FFB's Fidelity National Information Services core processing system, its SunGard Charlotte trust accounting system from SunGard (New York), and the portfolio management system (San Francisco-based Advent Software's Axys) used by FFB's sibling companies. The bank, Rahn notes, wants all of a customer's assets throughout the affiliated companies to feed "a single client dashboard displaying the entire value of the relationship."

The SalesLogix solution, Rahn asserts, is vital to maintaining this central relationship, and thus is key to helping FFB retain its clientele. "People of wealth want a single point of contact," he says. "In an organization as complex as ours that's very difficult."

Case Study Snapshot

Institution: First Foundation Bank (Irvine, Calif.)

Assets: $91 million in deposits.

Business Challenge: Mine disparate data sources to identify business prospects.

Solution: Sage North America's (Scottsdale, Ariz.) Sage SalesLogix CRM system.