Yes, it’s already February the 14th, and you know what that means. Gentlemen, it’s the day to leave the office early to pick up some cellophane-wrapped flowers from the grocery store and grumble about the picked-over selection of torn cards and mismatched envelopes. Ladies, it’s the day to bask in the warm glow of your superior planning and thoughtfulness. I can neither confirm nor deny that these lighthearted stereotypes may possibly emanate from my own personal experiences…
It is also a great day to reach out to your clients.
By the way, so was January 13th. And January 26th. Or January 25th. Or last November 3rd.
Any day is a great day to reach out to your clients.
Whether you are self-employed or work for a large firm, whether you receive a direct commission or a flat salary, your book of clients is your practice. Your practice is only as valuable as the recurring revenue stream from your clients, and if you aren’t retaining your clients and adding new ones, you aren’t adding value.
Contact Increases Stickiness
I have seen scores of client research reports and I cannot recall one that didn’t show a positive correlation between advisor contact and client satisfaction and retention. To cite just a few recent examples:
- The J.D. Power and Associates 2011 U.S. Full Service Investor Satisfaction StudySM found that one of the key best practices of client service was “Proactive advisor contact regarding new products and services or accounts four times in the past 12 months”.
- The AdvisorImpact 2009 Client Index revealed that only 63% of clients strongly agreed with the statement “My advisor is proactive in managing our relationship.”, despite 80% of them describing that attribute as ‘critical’.
- The VIP Forum‘s 2008 study Boosting Advisor Productivity reported that 80% of new business for advisors came by referral.
- I recall a proprietary client satisfaction survey for a large U.S. financial institution that showed even clients who were contacted more often than they preferred were statistically more loyal than those who were not contacted.
What do I say?
Worried that you don’t have a concrete reason to call your clients? Many advisors are quite proficient at coming up with great excuses to avoid making proactive contact:
“I don’t have any news”
“The market has been too volatile/flat/unpredictable”
“I don’t want to upset the apple cart. If I call, it will just give them a chance to complain”
To some degree, it doesn’t much matter. In 2010 The Oechsli Institute discovered that less than half of financial advisors performed well at what they called Engagement Competencies, with only 46% scoring well with clients at “Caring more about me than just my investments”.
I once inherited a client that I could not seem to interest in meeting so I could get to know her and see if I could add any value. I made it a personal challenge to call her quarterly. I could never reach her, so I left her brief voicemail messages saying that I was just checking in to see if everything was going OK and to call me if I could help in any way. Within a year I got a call from her saying she needed my help. She and her husband were selling their business and they really weren’t sure what to do with the $3 million they were getting in cash.
The surveys are right. I was very satisfied to get that call.
Even Better? Ask Questions.
Ask questions to understand your clients’ pain points, their unmet needs, their unrealized goals. Find out what’s keeping them awake at night and offer a solution. The current economic and market landscape offers endless possibilities. Questions can lead to actually giving advice, where the real stickiness begins.
In 2011, another VIP Forum study, Building Business Owner Loyalty showed a lift in client loyalty anywhere from 8% to 19% by providing advice around key personal financial issues. (Number one? Personal retirement planning.)
Regardless of how it goes with your significant other today, make this a day to improve your client relationships and improve the value of your practice. Just skip the torn card and grocery store flowers wrapped in cellophane. Not that I have any direct experience in that area…
