Relationship – the best route to long term differentiation
You cannot fit in and stand out at the same time. It’s impossible. In the same way differentiating your service offering is extremely difficult. The “what” and the “how” of delivering advice to clients is evolving but at the same time becoming commoditised. When I ask advisers what their new client advice process looks like it tends to follow a model that looks something like this…
Step 1: Initial meeting (which may or may not include a)
Step 2: Fact-find/Discovery
Step 3: Preparation and presentation of plan/recommendations (which may include)
Step 4: Implementation/completion of paperwork
Step 5: Annual reviews (which may not take place terribly consistently)
The “How” of advice delivery can also tend to look pretty homogenous. It is likely, for example, to involve some (or possibly all) of the following: risk profiling, establishing goals, life planning, cash flow forecasting, income and expenditure analysis, creation of an asset allocation model and the building of a portfolio to meet that model. Indeed, the IFP have a defined process for advisers to follow. So, if the “what” and the “how” are largely indistinguishable from one adviser to the next, how do you differentiate your service in the minds of your target market?
When I established Steve Billingham Consulting Ltd, I went to see a number of accountants before choosing which one I wanted to work with. I just wanted one of them to give me the confidence that they were the right firm for me to use. In reality they each told me (in their own way) that they would register the business, provide cashflow templates, take care of HMRC returns, create a tax efficient remuneration framework, handle payroll and they broadly charged more or less the same for the privilege. They all looked the same. The only way I could differentiate them was on how they made me feel. That’s right, I made the decision on an emotional level.
And so will most clients. Most decisions to buy services (particularly where the spend is discretionary) will be made at the emotional level. In reality clients are at best mildly interested in the “what” and the “how”. What they really care about is the “why”? In other words, clients don’t care how much you know, until they know how much you care.
Trying to differentiate your services on the “what” and the “how” (or anything else that can be easily imitated or copied) are unlikely to lead to sustainable differentiation. In his book “Marketing your Services”, Antony O. Putman defines differentiation as “the task of creating, in the minds of prospective customers, a perception of you and your services that is both distinctive and valuable”. He also points out that when customers engage your services they are buying both the service itself and a relationship with you as the service provider.
The secret to true differentiation lies in the quality and nature of that relationship: creating a positive and distinctive professional relationship with prospective clients, based on trust, transparency and consistently doing what you say you will do, such that your clients feel confident, reassured, informed and valued.
How do you make your clients feel?