We’ve all cheerily picked up the phone at one stage or another when a client calls, only to suffer that sinking feeling as the client goes on to explain that they are in fact moving their business to another adviser. Often you don’t even get a call, the business just quietly moves. So why do clients actually move their business and put themselves through the hassle of agency transfer letters, bringing a new adviser up to date with their affairs etc.
It’s not about price, or at least very rarely.
The management consultancy firm Bain carried out research some time ago among a large group of accountants, 360 of them in fact. While I know they are not financial advisers, it’s a relevant survey as accountants are service providers in the financial space with SME’s and professional clients. When asked, 80% of the accountants felt they delivered above average service. The researchers also asked the same question of 360 clients, one from each accountant. Just 8% of them felt they got above average service. What a perception gap!
They also asked the accountants why clients leave them. The number one reason given was price. This was number 8 on the list of clients. Their number one reason was they just “didn’t treat me right”.
So what’s the lesson in this for all of us service providers? Worry about your proposition more so than your price, and work on effectively communicating your proposition to your clients so that they never forget the value that you are adding. Make your clients feel loved by you!
While we all might go through a short period of reflection when we lose a single client, it may be necessary to take a bit of a deeper look if you find that a steady stream of clients are heading out the door. So what are some of the questions you might ask yourself?
How good is your proposition?
Picking up on the Bain findings above, how good really is your proposition? Has it actually kept pace with developments in the marketplace and are you competing with the best advisers out there who may be wooing your clients away? As clients experience the benefits of structured budgeting support and the really valuable insights that future cashflow planning delivers to them, how are you competing with this? At the end of the day, are you really offering true financial planning rather than just a transactional product focused service?
How good are you at keeping your clients engaged?
Your clients receive great advice from you at the commencement of your relationship and receive the benefit of a review each year. But what value do they get from you in the other 11.5 months of the year? More and more advisers are making great strides at improving their communication with clients, enabling them to add value to clients throughout the year. However, they also target these communications at prospective clients too – and these might be your clients currently….
Are you satisfied that your ongoing engagement of your existing clients will keep these threats at bay? Do your clients see you as the important cog in their financial affairs?
What are your competitors doing differently?
There may be other areas that are influencing your clients to move to a competitor. Are your competitors more active than you at networking locally, or seen as a valued support within the business community? Have they just developed a bigger and better (and more influential) brand presence than you that is swaying clients to move? Are they very clever in the marketing of their business? While their proposition may be no better than yours, does your client as a result of their greater presence perceive them as a better proposition? It might be time for you to revisit your marketing activities and bring more structure and focus to them.
Is price a factor?
While price is not the usual reason for clients leaving you, it can be a contributory factor if you are way out of line. You need to satisfy yourself that your price is in the ballpark. If it’s higher than the norm, can you back this up by demonstrating that your proposition is better than the norm? After all, clients will only pay a premium for a premium service.
These are just some of the reasons why clients walk. If possible, talk to clients who are leaving you and try and get to the nub of why they are going. They may at first be slow to give the real reason in order not to hurt your feelings. However, if you persist with professional questions asked with grace, you might just uncover some nuggets that will help you avoid the loss of clients in the future.