“Not everyone is able to appreciate value and therefore, we are better using our talents with those who can”.
John Niland
Imagine I’m at a cocktail party at which I happen to be speaking to a small group of your very best clients. It soon becomes apparent that we all know you professionally and the clients concerned start to sing your praises. Never one to let such an opportunity pass me by, I decide to drill down to identify what it is that, in their opinion, makes you stand out. I ask the following 4 questions: (insert your name or the name of your business in the blank spaces)
What do you think their answers would be? (be honest with yourself). What would you like them to be? How big is the gap? With the commoditisation of products and tax wrappers the most effective way to differentiate your service and deliver genuine value in the minds of your clients is through the quality of the relationship and client experience.
What characteristics and behaviours would a trusted adviser, seeking to offer an exceptional client experience to business owners for example, habitually display?
How do you, your advisers and your business stack up against those characteristics and behaviours? Are you happy with that? If not, what can you do to change things?
“Wow! = delight, dazzle and astound
John Bowen
In the current climate there seems to be a huge gulf between, at one end, those advisers who are seeing their business revenue, client numbers and profitability grow and at the other, those struggling to attract new clients, service existing clients effectively and pay the bills, never mind make profit.
One adviser I met recently (who fell into the latter group) explained that “prospective clients are being very cautious” and that “the economic climate” or “recent market volatility” was responsible for the lack of meaningful enquiries. All of which is a perfectly reasonable view to take. What was clear to me, however, was that this adviser had not taken the trouble to really listen to what his prospective clients were looking for, took a very dogmatic approach and rationalised his own shortcomings as mere “bad luck”.
On the other hand, a client I have worked with emailed me recently to let me know that they had just had their best ever month for revenue and that their annual revenue for the year to end July 2010 was up by 40%. Interestingly they didn’t for one second think that luck had anything to do with the result.
These two incidents got me thinking about what role luck plays in an adviser’s success (or lack of it). The great South African Golfer, Gary Player, used to say, “the more I practice, the luckier I get”.
So what separates the successful advisers from the “unlucky” ones. Well, beyond technical expertise or qualifications here is a non-definitive (I’m sure you can think of many more) list of possible answers.
Now despite the fact that much of this is blindingly obvious, most will not invest in a sustained and committed way in developing these traits or skills. They will continue to rely on networking or telemarketing, even when the numbers (if they bother to measure and analyse them) tell them it is clearly not working.
“Designing your product for monetisation first and people second, will probably leave you with neither”.
Tara Hunt, HorsePigCow
This week’s blog is the first in a series of articles I am writing for Money Marketing/Adviser Evolution designed to provide helpful, practical insights into the key ingredients required to deliver a consistently outstanding client experience, with the emphasis on outstanding. You can read it here. I hope it provides food for thought.
“Drive thy business, or it will drive thee”.
Benjamin Franklin
Pricing for Profit
How should you price your services? This is an area that has seen much debate for some time now around the right level of fees and whether hourly rates really do work in this sector. There is a balance to be struck. Price your services too high and you won’t get the business; price them too low and you’ll wish you hadn’t. Informed wisdom suggests that you can’t charge more than the market will bear. But surely that depends on which market or niche you are working in and what you are doing for clients.
Furthermore, we are providing services and the range of prices that people will willingly pay for the same service is many times greater than the range they will pay for the same product. How so?
Firstly, price information is scarce. If you want to buy the latest plasma TV you only need to trot along to your nearest Curry’s or Comet and you’ll find all the latest models from Sony, Samsung, Panasonic and the like displayed side by side, with the price clearly shown. It’s easy to compare.
Secondly, there’s no such thing as the same service. Each firm (or individual adviser) will deliver advice in their unique way, even if they use identical risk profiling, cash flow forecasting and financial planning software. Once you’ve decided that the new Samsung, all singing all dancing 3D TV is what you need (Okay, want) the only thing left to shop around for is the price. It is what it is, the same product.
Finally, the value of a service to the customer is always substantially more than the price. The £40 or so you pay your dentist for a filling on the NHS is worth multiple times that in terms of freedom from pain and sensitivity and the ability to eat normally. That value equation has to be there: the value of the service has to be many more times what we pay for it, otherwise there’s no “sale”
The other key element of your pricing strategy is KYC. No, not “know your customer” but “know your costs”.
Last year I attended a breakout session at a conference where the question was asked, “How many of you have worked out what it costs to deliver your service?” By my reckoning there were 70 advisers in the room and not one hand went up. Staggering. The pragmatic and sensible way to determine your pricing is to price to cover your costs (including your own remuneration) and make your margin. It’s your margin that drives your profitability, sees you through the tough times and allows you to invest in the business.
Profit is not a dirty word. In reality, only when you are profitable can you truly act in the long term best interests of your clients.