6 Traits for Building Loyalty
Self-promotion is not the key. Here’s a primer on how advisors can build a successful practice with very little marketing, according to John J. Bowen Jr.
Self promotion is not the key. Here’s how advisors can build a successful practice with very little marketing.
HOW WOULD YOU PREFER TO SPEND your time?
You’ve got two choices: A, promoting yourself and constantly hunting for new clients; or B, serving very loyal clients who regularly give you more of their assets to manage, despite very little marketing on your part.
Of the thousands of advisors I’ve met and worked with over the years, there are probably fewer than 5% who would choose A. We all want clients who stick with us and give us more of their trust and assets over time, and who also introduce us to their affluent peers. A devoted client base is the key to building a truly exceptional practice.
What’s more, having an exceptional practice is more important than ever. Although many financial professionals will earn good livings for some time to come, we are rapidly entering an era where relatively few advisors reap most of the rewards. The financial planning world is becoming a place where the winners might not take all — but they will take most.
Regardless of whether you focus mainly on investments or go beyond asset management to include wealth and advanced planning services, you need a loyal clientele. To attract one, you need to practice what I call the six Cs of client loyalty — character, chemistry, caring, competence, collaboration and cost-effectiveness.
We are rapidly entering an era in which relatively few advisors reap most of the rewards.
The first four of these traits are your foundation: character, chemistry, caring and competence. They work in lockstep. If wealthy clients see you as very caring, then they are likely to conclude that you have character, that the chemistry between you is good and that you are quite competent.
But a strong foundation will still have little impact on how those clients view you when it comes to being consultative.
Let’s consider each of these characteristics individually.
1. Character entails the personal qualities that clients look for in financial professionals. The three most important are integrity, trustworthiness and dependability. Advisors universally acknowledge that these traits are important. Unfortunately, many have a difficult time conveying these traits to their clients.
2. Chemistry occurs when you’re in synch with your clients. You have chemistry when you connect with them; when you know what they like to discuss and you see eye to eye on important issues. You can’t fake having good chemistry, any more than you can hide it when the chemistry is bad.
That means you should work with people you really like and get on many levels. By opting to only serve clients who are a good fit for your skills and interests, you ensure that the chemistry at your firm is only the best.
3. Caring is about empathy and truly
knowing what matters most to your clients, beyond their financial goals and investment objectives. To convey caring, you have to demonstrate that you have a genuine grasp of their most important priorities.
4. Competence. The more you demonstrate your competence, the more loyal your clients become. Most clients consider their advisors to be extremely capable technically and exceptionally smart. But they tend to equate competence with thought leadership, and a strong indication that your clients regard you as competent is when they see your peers acknowledge you as an expert. Establishing your thought leadership by publishing articles and white papers and getting endorsements from key influencers in your market niche does wonders for your perceived competence.
5. Collaboration is the surest way to create loyal clients, regardless of your business model. This comes down to three things: The first is recognizing that your relationships shouldn’t always be about what you do for your clients. Most of them want to be involved and would prefer a more collaborative approach.
The second concerns when you communicate with them. Your client contacts shouldn’t be limited to scheduled meetings like quarterly investment reviews. You build loyalty when you reach out spontaneously, whenever there is a reason to get in touch.
The third is customizing communications. Formal presentations shouldn’t be off-the-shelf, but should be personalized in a way that connects with each client.
6. Cost-effectiveness is increasingly important as clients become more pricesensitive. But while many financial professionals have been forced to lower their fees, for affluent clients the issue is less about cost and more about value. The wealthier they are, the more willing they are to pay without debate for financial advice, as long as they perceive it as high quality.
Clients tend to focus on costs only when their advisors fail to focus on value. Providing cost-effective solutions means not only providing real value, but also the perception of value.
THE SIX Cs AND YOUR PRACTICE
The six Cs are all in your control. You can act in ways that communicate caring, generate good chemistry, demonstrate competence and cultivate a collaborative spirit with your clients. The key is to carefully consider each factor and how you can seamlessly integrate it into your practice.
Whether you focus on investments, basic financial planning or more sophisticated planning strategies, character and caring are essential qualities to convey. Chemistry becomes increasingly important as wealth managers work to broaden their range of service. Greater chemistry leads to greater client rapport. If you’re a wealth manager offering complex planning solutions, you need this rapport to engage with your clients, evaluate their needs and identify which wealth management strategies can have the greatest impact.
The importance of being competent, consultative and cost-effective also increases as you offer additional services and products.
Taken together, these characteristics attract the right mix of affluent clients, inspire genuine loyalty and become the glue that binds the client to an advisor as their relationship deepens over time.
Excelling in all six of these traits requires the right systems and processes, as well as the right people who can consistently deliver an outstanding client experience. The payoff comes when you can show that you are the right person to help your clients make smart choices about their wealth.
You can’t fake good chemistry. That means you should work with clients you really like and get on many levels.