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The importance of “brand” for advisers

After many years working with advisory firms, we’ve come to the conclusion that the best definition of your “brand” is the simplest.

Your brand is partly your reputation. It’s what people say about you when you’re not around. It’s how they feel about your firm and what they expect from working with you. But reputation alone doesn’t capture the full scope of a brand.

You must also add in the dimension of visibility. How well known is your firm in your target market? The better the reputation and the greater the visibility, the stronger the brand will be.

A well-known, well-respected firm has an easier time attracting new clients. New recruits want to join that firm. Potential partners want to be associated with it. You can charge higher rates and are likely to be more profitable.

When viewed in this light, it is easy to see the value of a strong brand. This definition also helps you understand how to shape and build your brand.

Building your brand

Some activities are consistent with your brand and will help build and reinforce it. Other activities might run counter to your brand (hurt your desired reputation) and should be avoided.

Similarly, increasing your visibility within your target audience will build your brand (assuming the activity communicates your reputation correctly). However, if that visibility doesn’t help communicate your reputation you will fall short.

That’s why advertising is so often a questionable strategy for a professional services firm. Visibility, absent the ability to communicate reputation, is of limited value.

To build your brand, you also have to deliver on your brand promise. You have to be who you say you are and live up to the expectations created by your brand. If you don’t, your reputation will soon reflect it.

For example, saying that you have exceptional people will fall flat unless they truly are exceptional. Unfulfilled promises will catch up with you.

Two Brands

When you understand that your brand is the way people perceive your firm, it’s easy to see that different people can have different views of your firm’s reputation and visibility.

Of particular note is the difference between how the outside world sees your firm and how the folks that work there perceive it. You might think of these as your external brand and your internal brand.

If these two perceptions are out of sync, you can easily make mistakes. You might assume that your target clients understand your firm’s reputation, when in fact they do not. Similarly, you may assume that potential clients appreciate a difference in expertise when it is not even on their radar.

On the other hand, if you understand your brand and communicate it clearly, good things happen. You start attracting clients who are looking for a firm just like yours. Ditto for employees and business partners.

Your Biggest Asset

A strong brand can bring you desirable new clients, great employees and premium rates. It’s an asset that has value, even if you move offices, change clients or replace staff. Your brand endures.

It’s hard to imagine another asset that contributes so much to growth and profitability. It’s certainly worth the time to understand and nurture it.

Quote of the week

For myself, I am an optimist – it does not seem to be much use being anything else.

Winston Churchill

What is your “brand”?

Your brand is arguably your most valuable asset. A strong brand can bring you desirable new clients, great employees and allow you to charge premium rates.

Your brand is both your firm’s reputation and it’s visibility in the marketplace.

We are used to hearing that a firm’s most important asset is its people. But people come and go. And unless an individual’s reputation and industry presence is so strong that they impact the entire firm’s marketplace perception, not much changes. Your reputation is what lingers.

Brands can be ruined. Consider Arthur Anderson. Or Ratners.

For many Advisory firms, your brand is arguably your most valuable asset — and perhaps the least well understood. That’s not too surprising, given that few advice firms are run by executives with a marketing background.

In fact, many advisers have never had a single marketing class in their entire formal education. Further, their advancement within the firm has been tied to their ability to close new business based on personal relationships and referrals. Branding considerations are not on the top of their minds.

Consult a marketing textbook and you are likely to find a brand defined as the sum total of a client’s emotional attachments and experiences with your firm. You’ll probably find the discussion abstract and not very practical. It seems far removed from the day-to-day realities of bringing in new clients and recruiting staff.

In reality, the opposite is true. Your brand has a direct impact on building your firm.

And let’s peel away some very common misconceptions:

  • Your brand is not your firm’s name.
  • Your brand is not your logo or tagline.
  • Your brand is not your website or marketing collateral.
  • Your brand is not your mission statement.
  • Your brand is not your advertising.

These items may help communicate your brand to the world. They may even help clarify it. But they are not your brand.

Quote of the week

It’s like driving a car at night. You never see further than your headlights, but you can make the whole trip that way.

E. L. Doctorow, American Author

Where’s your “pot of gold”?

Client segmentation is becoming increasingly sophisticated with advances in digital analytics and behavioural and psychographic segmentation techniques. We’ve all heard about ‘big data’, and there’s no getting away from it, there is an endless supply of information about your clients. You can find yourself lost for days and tied in knots with algorithms and approaches, in an endless exercise of slicing and dicing. It’s a minefield. But there are some quick ways to find your most attractive and profitable niche if you start to identify a few key characteristics.

Client segments can be as broad or as narrowly defined you wish. Males are a segment. But so too are blond, left-handed females under 30 who live in Guildford and drive Volvos!

Most mature adviser businesses have grown to where they are today by working with as many different clients as possible. As with many businesses the scattergun approach has been adopted to get clients on the books rather than focus on the right clients. The result is too many unprofitable clients.

The segmentation work we do with clients indicates that the most valuable clients of any business share many common characteristics. It’s almost as if adviser businesses have established a niche – they just haven’t realised it. So how do you find yours?

Create a simple spreadsheet and analyse your top 20 clients by recurring revenue to your business capturing the following information:

  • Client Name
  • Where they live
  • Age
  • Occupation (if they’re retired, what was their occupation before they retired)
  • Assets with your firm
  • Estimated Net Worth (if you know it)
  • Annual Income
  • How did they become a client? (e.g. referral, website, networking, professional introducer etc.)
  • What products and services have they bought from you?

(We have a ready-made template for capturing this data. If you’d like a copy, please email us directly or contact us through the website)

Armed with this information you can start to analyse some characteristics that your top end clients have in common. For example it may emerge that 70% of your most valuable clients are business owners or senior executives over age 50; they may even own or work in businesses in the same profession or sector. Whether that was your intention at outset doesn’t matter – this has just become your “target market”. Now you can start to think about how to attract more clients like them and make sure you target your marketing efforts for maximum results.

Using the Pareto principle, it’s a scary thought that potentially only 20% of clients provide 80% of profit. And, it’s not news that advisers have wrestled with identifying their most profitable client segments in the last few years – a challenge that’s unlikely to go away anytime soon with the pace of change in the industry.

But, wouldn’t it be massively rewarding to see the fruits of your labours quickly by directing time and effort to developing outstanding client experiences for your most profitable clients? Clients who may in turn start to do some of your marketing for free by way of recommendation. In a nutshell, client segmentation provides the framework to start doing just that.

So many companies continue to take a broad-brush approach to their marketing efforts. As Theodore Levitt, the renowned author and professor at Harvard Business School, once said, “If you’re not thinking segments, you’re not thinking”. It’s understandable; many smaller companies neither have the time or expertise to deliver a targeted marketing approach to a specific niche.

But what a pot of gold they could be missing.

Quote of the week

We are not retreating – we are advancing in a different direction.

Genral Douglas MacArthur

Why client care pays off

Clients either decide to buy, or decide not to buy your services. They decide to come back and buy again, or not buy again. They decide to recommend your business, or bad-mouth your business. The way you handle your client’s “moments of truth” determines the success of your business, the survival of your business and everyone’s job, salary and mortgage payments.

Seems like a powerful reason to improve your “moments of truth” don’t you think?

Does client care really come with a financial payoff for your business?

Let’s answer this question with a few more questions. If one of your clients has a magical client experience…

  • Are they more or less likely to buy additional products or services from you?
  • Are they more or less likely to remain clients over the long term?
  • Are they more or less likely to be willing to pay more for what you deliver?
  • Are they more or less likely to recommend you to other potential clients?

I’ll let you work that out for yourselves.

Quote of the week

People are influenced most by those they trust, admire and believe care for them.

Bill Bachrach

First class “client experience” in action

When Jan Carlzon took over Scandinavian Airlines (SAS) the business was making multi-million losses and in worrying decline. In just 12 months he turned the business around. In one year earnings were up £60 million in a drastically slumping market where other international airlines collectively lost £1.5 billion.

One of the key elements of Carlzon’s turnaround was his unerring focus and commitment to customer care.

10 million customers a year typically come into contact with 5 SAS employees. And each contact lasts an average of 15 seconds.

In Carlzon’s words: “SAS is ‘created’ 50 million times a year, 15 seconds at a time. These 50 million ‘moments of truth’ are the moments that ultimately determine whether SAS will succeed or fail as a company. They are the moments when we must prove to our customers that SAS is their best alternative”

Carlzon worked out SAS had 5 x 15 second moments of truth with every customer. How many moments of truth do you have? How long are they?

Just 75 seconds per customer determines SAS’s reputation, whether a customer comes back, and whether they recommend others to use SAS.

How long have you and your team got?

Because Carlzon and his 10,000 employees changed these 5 x 15 second interactions they turned multi-million losses into multi-million profits in just 12 months. Not bad.

The 5 x 15 second customer conversations at SAS were with front-line people. Not managers or directors. As at SAS, your front-line people similarly have the knowledge, insights and experience to help you improve your moments of truth.

Identify your moments of truth and get to work on improving them… now!

Quote of the week

You always need heroes, but if you celebrate firefighters, you get fires.

Tom Searcy