You Are Not The Solution

Peter Montoya became famous for preaching that your brand is you.  David Grau now has research showing how that approach backfires.

Montoya has contributed a lot to advisor marketing. As much as I agree with a lot of what he has published, I have always disagreed with one of his precepts: that the brand is you.

The Breakthrough Company is the result of research into small companies that successfully became big companies.  The first principle of success they explain is to “crown the company” meaning put the interests and image of the company before yours as CEO. When you put the interests of the practice before your own, you recognize the shortcoming of putting the spotlight on yourself.

People are interested in how they can benefit from working with your firm.  When you say “I work with retirees with gobs of money to invest” or “I specialize in people who have just come into a lot of money through inheritance or selling a business” you talk about yourself, not about what’s in it for the client. You also limit both the growth potential of your firm and its value when it comes time for your own liquidity event.

It is this latter point that Grau has now documented.  And it makes sense.  If you have spent decades promoting yourself as the most valuable aspect of your business, a buyer will have to start all over again if they buy your practice.  The buyer risks losing clients during the transition to a new value proposition.

It can also cause you problems as your business grows.  I am working with an advisor now who faces this challenge.  For the past 20 years, she was the person the clients came to – it was her wisdom that people perceived as the value of the practice.  For the last 10 years, she has had a fully qualified advisor working for her.  It was the principal’s belief that either of them could (and did) provide good service and advice. Yet, she had a terrible challenge managing her time because all the clients insisted on talking to her.  When we conducted an advisory board meeting, we asked about the clients’ perception of roles in the practice. To her surprise, people thought the other advisor was her assistant – some actually referred to her as secretary. It will take a long time to adjust that perspective, get clients agreeable to taking advice from the other advisor, and give the principal back a little more control of her time.

It is much more productive to define your business in terms of a solution or experience clients seek. It may be one person or a team, but it is the business delivering the value. That opens up the opportunity to delegate or add partners smoothly. Avoid the ego gratification of naming your practice for yourself, and identifying your own attributes and skills as the primary value the business has to offer. Let people seek the firm to find what they are looking for, and you will realize it gets easier to run now and easier to sell later.

In a market crash, what you ask your clients is more important than what you tell them

One of the joys of volatile markets is that you can actually remember the lessons of the last big downturn, because it was not that long ago. 

The market has now fallen enough that we are referring to certain dates in 2008 in the statistics overviews.  That bear market, the second “once-in-a-lifetime” decline in ten years, took a tremendous toll on advisors and clients alike.  And the advisors who managed to keep their clients to stick with long-term investment principles did the best by their clients, and earned more than their fees.

One of the significant ideas to arise from that difficult time was the importance of doing as much asking as telling.  This is anecdotal and unscientific but significant observation – the advisors who invested their time telling their clients to hang on fared worse than the ones who asked their clients about their concerns.

Julie Littlechild, President of Advisor Impact, tells the story of an advisor she spoke to toward the end of that market, who reflected on his experience in trying to calm his clients. “He talked at his clients for two years, tried to say, everything’s fine, everything’s fine, everything’s fine, this way, that way, dance a little, but he was beginning to realize that the conversation maybe wasn’t two-way and perhaps that he hadn’t acknowledged their fears sufficiently.”

I remember talking with an advisor who engaged his advisory board in designing the best way to address clients’ concerns about the down market.  They came up with the idea to do “town hall” meetings, each with a brief presentation and lots of time for questions and answers. The meetings were a huge hit.

I remember Bob Curtis, CEO of PIE Technologies (who produces MoneyGuide Pro) showing advisors how to communicate the effect of the downturn on clients’ plans rather than their portfolios, and pointing out that the real question on their minds was not “How far will this go?” but “Will I be eating dog food in retirement?”

The best thing you can do for your clients is to acknowledge their fears, let them know you do not know where this is headed (at least short term) and are watching things carefully, and then to ask them what their biggest concerns are and let them speak. 

The Client Feedback Loop

Asking is good. Telling people about it is better.

Gathering client feedback increases loyalty. So when you gather feedback, make sure your clients know you are asking for it. You can even get some benefits from letting your prospects know.

When you do a client survey, all your clients will know about that. If you assemble a client advisory board, you can benefit from promoting that fact. Many advisors have told me that their clients and prospects are impressed when they hear about the advisory board.

Acting on feedback will push your clients closer to being engaged. The first step is to publish the results of the feedback you received. I am not recommending you actually distribute the full report of the survey – for many financial professionals that's probably against compliance regulations anyway. You can however, promote selected results. "When surveyed, our clients tell us that we consistently respond to their questions faster than they expect."

You might consider publishing a surprising result as well. "On our recent survey, you collectively gave our company newsletter a three on a scale of five. We will be looking into how we can improve it."

Include some of the results in your marketing. "We provide excellent customer service" will not differentiate you from any other advisor. Saying "when surveyed, our clients indicate that 85% of phone calls are returned within one business day" can.

Similarly, promote feedback from your client advisory board. Since only a few select clients can participate in the board at any one time, you may wish to have a communication plan in place to publicize the feedback. You can include a description of the issues discussed at the board in your company newsletters, e-mails, or posts to your website.

Indicate what you plan to do in response to the board's recommendations. Even more important, publicize the changes you make once they are in place. Changes to your office procedures, how you interact with clients, your marketing, or client events organized based on the request of the advisory board are all powerful ways to communicate that you are listening and willing to make changes to improve your clients’ experience.

The study Anatomy Of A Referral revealed that 74% of engaged clients report that they were asked for feedback, and 72% believed their feedback was important to the advisor. Communicate the feedback you received, what actions you took in response to them, and you can help get more of your clients to that coveted engaged status.



How Do Your Clients Describe You?

There has been a lot of ink devoted to the importance of a financial advisor’s value proposition. But there may be something more important than how well it is written and how well it differentiates you.

As discussed in the Art Of The Referral, client referrals actually happen when a client's friend asks for a referral or has a financial need. This is the moment of truth. When a friend, acquaintance, or business associate of a client expresses a need for your services, will you spring into your clients mind?

It is important that your value proposition describe what you do in a way that distinguishes you from other advisors and is meaningful and compelling to the people in your target market. It is just as important (maybe more important) how your client describes your unique value. At the moment of truth, will your client put together their friends need with the problems you are especially skilled at solving, and remember to refer them to you?

You know that I advocate engaging your best clients through an advisory board to discuss what they most value about your services. That's the best way to know how they describe you and to get their guidance in refining a value proposition. But there are other ways to find out how they describe your value. You can uncover it in a client survey, or by incorporating a question or two into your client meeting agendas.

Once you uncover how your clients describe your most important value to them, you may need to work with a few select clients adjusting it. While you want it to remain in their words, you may want to emphasize specific services or an investment style. Continue to work with your clients so that you project the right message, and any adjustments continue to ring true to them.

Finally, the polished value proposition needs to be communicated back to clients. You can publish it in a client newsletter.  You can incorporate it into a brief discussion of the clarified statement at the end of appointments:  “We have been working to focus on providing [type of services] to [type of clients].  If you have any suggestions on how we can do that better, we would appreciate your help.” 

Devote some attention to educating clients on how to describe your value, and referrals will come much more naturally.



Put your clients in the driver seat

In my last post, I asked whether your clients would choose you if they were running through their own checklist of the ideal advisor. Let me offer you an idea of how to guarantee that you would be the advisor selected: Have them tell you what kind of advisor to be.

Most advisors understand that to attract a specific kind of client, they need to offer services sought by that client. Virtually all advisors I have worked with have taken that idea, envisioned the type of client they wanted to attract, and designed a service mix and marketing materials they believed would be attractive to those clients. Sometimes it works, sometimes it doesn't. Let me share with you the often fatal flaw in that approach: you don't really know.

Virtually all advisors’ strategic and marketing plans are the product of the advisors imagination. They sit in a room and think things up. Of course, advisors have some understanding of client desires from working with them for years and years. The forward thinking ones have hired a firm to conduct a client survey. But in the end, you're still just making it up.

Here's a radical idea: have the clients design your practice. Have them tell you directly what the ideal practice would look like. When steering the direction of your practice, let client drive.

It's not really as difficult or revolutionary as it sounds. Many advisors utilize some of the tools integral to reengineering your practice this way: surveys, focus groups, advisory boards. But what few advisors do, or have the fortitude to do, is turn the control over to the clients. Even among advisors who look to their clients for guidance on how to improve their practice, too many still dream up their own plan and then go to the clients and ask "so what you think of this?"

It is a rare advisor who will gather together the clients and prospects he wants most to attract and ask "tell me what the ideal advisor would look like; would offer. Tell me the experience you would most like to have as a client."

The ones who do, however, are the outstanding client advisors. They are Client Driven. And they are the ones who meet and exceed their referral goals. They are the ones who don't worry about where they will find new clients.