Posts Tagged ‘Job’
Wednesday, July 11th, 2012
Your clients’ words are more credible than yours.
To attract new clients, you have to establish why you are different. Beyond why you provide a solution the prospect needs, establish why it would be in their best interest to choose you over all the other advisors they could choose from.
And when you talk about your differences, using the words your clients use will do a better job of communicating than your words. One of the biggest mistakes in advisor marketing is developing your messages yourself and not involving your clients. That’s one of the main reasons a client advisory board such a good idea. Gathering clients together for a facilitated group conversation is a more effective way of understanding your value and your difference. When advisors describe their value and their difference without the clients input, they very often miss the mark.
Beyond knowing what to communicate is choosing which words to use. Advisor marketing tends to be chock full of words advisors like to use, but the words I hear from clients are often different. You say “peace of mind” but they probably say “feeling organized” or “comfortable” or “feeling like we understand that.” You might say “our disciplined investment strategy” but they might say “watching out for the risks.”
Maybe even more important than the words themselves, people evaluate the source of the information when they get told something. Your prospects expect you to promote yourself and so they consider comments from existing clients to be more credible than what you might say about yourself. Now, this can be tricky territory because of the prohibition on testimonials. If you avoid attributing comments to any individual and avoid making them overtly promotional, I believe you can utilize this approach. So, for example, rather than saying “We are excellent at retirement planning” you might say “Our clients tell us that our process made them feel much better prepared for retirement.”
Your brand is not what you say it is — your brand is what people say about you. To effectively communicate your value and your difference, let your brand do the speaking.
Tags: Advisory Board, Best Interest, Group Conversation, Investment Strategy, Job, Marketing, Peace Of Mind, Prohibition, Prospects, Retirement Planning, Testimonials, Tricky Territory
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Tuesday, May 22nd, 2012
As part of a recent round of research with investors, a highly successful business owner discussed his financial advisor. On balance, he’s happy with the job his advisor is doing, with the exception of one small thing.
Here’s how the conversation started:
“I’ve got the bulk of my savings with a broker that I’ve worked with for several years, and I’m generally happy with the job he does,” was the opening comment. “He’s very conservative which I like, because it keeps my own aggressive instincts in check. As a result, when markets cratered a few years ago, I didn’t get hit nearly as hard as the guys I golf with.”
Then I asked about the contact from his advisor, and he was happy there as well:
“My broker touches base about once a month and is really quick to return my messages. When we sit down to discuss my portfolio, he’s well prepared and has specific suggestions; so the meetings are a good use of my time. And if I ask to meet at my office, he’s always willing to come to me rather than expecting me to go to him all the time.”
Then he paused and went on:
“There is one thing, though, that does bother me. Sometimes when I’m speaking to my advisor on the phone, I get the sense that I don’t have his full attention. As a result, I’ve had to repeat myself or he asks the same question more than once. It’s as if his mind is wandering, or he’s doing something else while we’re talking. And I do recall once or twice hearing some clicking in the background, as if he was typing on his computer while we were talking.”
I asked this investor to tell me more about this:
“I don’t want to make a bigger deal out of this than it is, but it’s really begun to bug me. My time is valuable, and if we’re going to talk I want his complete focus. It’s gotten to the point that recently I asked if he was set up on Skype so we could talk face to face. It turns out that his firm doesn’t allow Skype, but he did say that he would be happy to schedule a call from his home first thing in the morning or at the end of the day.”
“It’s funny: recently my broker asked me if it might be possible to get an introduction to my golf group and I said I’d see what I could do. What I didn’t say is that my big hesitation is being embarrassed if one of my buddies has the same experience that I’m having. Given everything else my broker does right, I can live with this, but I’m not sure others would feel the same way.”
Your two priorities on phone calls:
Let’s be clear here: The investor may be absolutely wrong about this, and it’s possible that he has his advisor’s 100% attention when they’re talking on the phone. Whether that’s the case or not, he doesn’t FEEL that he has his advisor’s full attention, and that‘s created a problem.
There are two messages from this conversation: First, in any interaction with clients, we have to give them our full attention. On long phone calls, that can be challenging. One solution is to make notes, circling key points that you want to respond to.
And second, we need to ensure that clients feel they’re getting all of our attention, by acknowledging what they’re saying. Long periods of silence don’t communicate that we’re listening. On longer calls, you may want to recap client comments at key points: “Just to be completely clear on my part, here’s what I’ve heard you say.”
Losing 10 points in your IQ:
For many of us, the key message from this conversation is that we need to stop deluding ourselves about our ability to do two things at once. I’ve seen advisors “listening” to conference calls while working on their computer, and I know that either the call or the work they’re doing (or both) are suffering.
In May, Princeton psychology professor and Nobel Prize winner, Daniel Kahneman spoke to the CFA Institute annual meeting in Chicago. He made the point that research shows we can effectively multi– task in a very limited set of circumstances. If we’re doing something that requires little conscious attention; for example driving down a highway, we can also carry on a meaningful conversation with a passenger. Because we’re driving on auto-pilot, we’re able to divert our attention to another activity.
That changes when we have to focus. As soon as the driving requires conscious thought, for example making a left hand turn into traffic, both drivers and passengers instinctively stop talking, because both know that the driver shouldn’t be distracted.
The same principle applies to everything you do during the day. Any important activity needs your 100% attention.
Still not convinced? A recent article on multi-tasking pointed to research showing that trying to do two things at once causes a 10 point drop in IQ, and reduces productivity by as much as 40%. That 10 point drop in IQ is equivalent to losing a full night sleep, or twice the impact of smoking marijuana.
Read the article excerpt below and then resolve that starting today, on any important issue you will give that issue your full and undivided attention; before it endangers client relationships or costs you a referral.
Deluding yourself on multi-tasking:
“The pioneer of this research is Professor Earl Miller, a neuroscientist at MIT. He scanned volunteers’ heads while they performed different tasks and found that when there is a group of visual stimulants in front of you, only one or two things tend to activate your brain, indicating we’re really only focusing on one or two items. In other words, our brains have to skitter to and fro inefficiently between tasks. But the real problem occurs when we try to concentrate on the two tasks we are dealing with, because this then causes an overload of the brain’s processing capacity. This is particularly true when we try to perform similar tasks at the same time; such as writing an email and talking on the phone, as they compete to use the same part of the brain.
As a result, your brain simply slows down. Even just thinking about multi-tasking can cause this log-jam, as Glenn Wilson, a psychiatrist at the University of London, reported a few years ago. He found that just being in a situation where you are able to text and email, perhaps sitting at your desk, can knock a whole ten points from your IQ. This is similar to the head-fog caused by losing a night’s sleep.
This is why Professor Miller, for one, is highly wary of the multitasking lifestyle.
“People can’t do it very well, and when they say they can, they’re deluding themselves,” he says. “The brain is very good at deluding itself.”
Not only does multi-tasking affect our mental clarity, switching between tasks also makes us less efficient. An American study reported in the Journal Of Experimental Psychology found that it took students far longer to solve complicated math problems when they had to switch to other tasks; in fact, they were up to 40 per cent slower. And studies in the US show that students who do homework while watching TV get consistently lower grades.
In the words of UCLA psychology professor Russell Poldrack:
“There is a cost to the way that our society is changing. Humans are not built to work this way. We’re really built to focus.”
Wednesday, May 2nd, 2012
Ask advisors whether they value their clients (especially top clients) and care about their future success and you’ll get funny looks wondering what you’ve been smoking. The answer is so obvious that the question isn’t worth asking.
Ask clients the same question and the response is often quite different. Yes, their advisor would regret the loss of revenue should they leave; but beyond that many do feel taken for granted at least a little bit. Ask a further question about how much their advisor cares about the relationship and their success beyond the profits they represent, and even more uncertainty creeps in.
The message is clear: Just caring about clients and valuing relationships isn’t enough. Clients have to know you care and know that you value relationships. To the extent that clients don’t perceive this, in the words of the Oscar-winning 1980’s movie Cool Hand Luke: “ What we have here is a failure to communicate.”
Trap One: Doing more of the same:
The first trap for advisors is relying on doing an outstanding job to make clients feel appreciated.
One approach is by focusing on the deliverables you’re paid for. Increasing the time developing in depth financial plans, researching investment alternatives, reading and attending conferences, finding better ways to rebalance portfolios.
A second approach is to ramp up client communication. Increase the frequency of reviews, call to check in more often, host more breakfasts, and send more newsletters.
The challenge with both these approaches is by focusing your efforts here, you’re generally delivering what clients expect for the fees they pay. Of course you’re going to do a great job of researching investments and building portfolios and of communicating.
Forget the fact that you do a far better job on these than most other advisors. All too often by doing more of the same, clients may feel reassured they’re getting what they pay for; but they don’t feel they’re getting MORE than what they pay for.
And it’s getting more than what they pay for that makes clients feel appreciated and valued. I’m not suggesting for a moment that you should stop doing an outstanding job on delivering value in your day to day process, and in your client communication. In fact these may be a core part of your value proposition in keeping existing clients and in attracting new ones. It’s just that for many clients this isn’t sufficient for them to feel truly valued.
Trap Two: Relying on recognition activity:
A second strategy some advisors use is to invest time and money in activity that makes clients feel recognized and appreciated. There are almost as many different ways to do this as there are advisors; dinners, boat cruises, wine tasting, golf outings, and the list is a long one.
There are a few challenges to this approach. First, these events tend to be costly. Second, given how busy people are, it can be hard to get top clients out to them. Third, while the results can be positive initially, the impact often lessens with repetition.
And finally, unless personalized in some fashion (example, an evening for clients who love wine), the very fact that you do something for a large group can undermine the sense among your clients that this is especially for them. And depending on how cynical the client is, you may even get the sense among some clients that “I’m paying for this.”
That’s not to say that the right recognition activity can’t send a positive signal, because it certainly can. The challenge is that the message may be hard to get through to all your key clients, and also may wear off over time.
An approach to let clients know you care:
The good news is that in my conversations with clients over the years, I have run into many who absolutely believe that their advisor cares about them and their success. When I reflect on those conversations, there are a few recurrent themes.
Firstly, clients who say their advisors care almost always say they really feel listened to. Perhaps the simplest way to let clients know you care is to make drawing them out in conversations your top priority. The more you ask clients to talk about their situation and circumstances and how they feel, the more they see you as truly caring. Basic I know, but something that a remarkable number of advisors seem to miss.
Second, these clients generally like their advisors as people. They don’t see their advisors as obsessed with material success, or fixating on maximizing their financial outcomes. One interesting comment from clients who say their advisors care about them is that surprisingly often they feel that their advisor cares about other people also. They see their advisors as generous contributors to charities and other good works from which they derive no personal gain. If you make giving back to the community a priority, consider finding ways to let your clients know.
Third, not every conversation should be about money. If all of your conversations are about finances, some clients wonder what motivated the call; your interests or theirs. Consider allocating a small portion of your conversations with key clients to things from which you derive no immediate benefit.
Finally, don’t forget the little things. When I talk to clients who say that their advisors truly care, I am astonished how often it’s the little things that make a big impact.
I recall one widow in her 70’s who said what really stood out for her was that whenever she went in for a meeting, her advisor remembered exactly how she likes her tea.
Another advisor talked about ten minutes each morning that has made a big impact. At the start of each day his assistant gives him a list of clients celebrating a birthday. He calls them first thing to say nothing more than “It’s my annual call to be among the first to wish you happy birthday.” This inevitably leads to conversations about their birthday plans and life in general. Even leaving a voice mail sends a positive message.
As you consider how you spend your time in the period ahead, by all means focus on the things that it takes to do a great job and the things you’re paid for. But don’t neglect to consider the other things often unrelated to these, that can make the difference in ensuring that clients truly believing that you care.
Tags: Ask Question, Client Communication, Conferences, Cool Hand Luke, Deliverables, Extent, Failure, Investment Alternatives, Investments, Job, Little Bit, Portfolios, Profits, Ramp, Rebalance, Relationship, Uncertainty, Value Relationships
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Wednesday, November 30th, 2011
The last few weeks have been the most volatile in memory, bringing new meaning to the phrase “bungee markets”.
My recent posts have focused on the need for proactive communication with clients.
In the perfect world, you would have had conservative portfolios with large cash balances going into the last twelve months. Realistically, few advisors can honestly make that claim — but that doesn’t mean you don’t have the opportunity to gain new clients in the current market conditions.
Earlier this week, I got a call from an advisor who had diligently contacted clients over the summer — since last spring he’s made face to face and telephone meetings with all his key clients a priority. He’s also sent out letters and emails, organized two conference calls and hosted luncheon and evening sessions for clients.
His question: In addition to focusing on talking to key clients through the market turmoil, what can he do to attract new clients?
History shows more clients move in bad markets rather than good ones. If you’re in a situation similar to this advisor, where you’ve done most of the right things over the past while, you have a unique opportunity to capitalize on the time you’ve invested by leveraging your client communication to talk to prospects.
Clearly, your primary focus these days should be on existing clients. That said, once you’ve done a solid job with the people you’re working with right now, the best use of the last hour or two in a week won’t necessarily be more contact to existing clients.
Instead, direct that time against prospects — we know that many clients aren’t satisfied with the contact from their advisors through recent market events. In light of that, consider two strategies — one focused on existing clients, the second on communicating directly with prospects.
Referrals continue to be key in attracting new clients. At the end of a conversation with clients, you could say: “Given the challenging markets over the last while, talking to clients like you has been my first priority. How do you feel about the level of communication you’ve received from me over the past while?”
Assuming you get a positive response continue: “I’m glad you feel good about the contact, even if markets haven’t been cooperating through this. Of late, there has been lots of media coverage about investors who haven’t heard from their advisors and are thinking about making a change as a result. Given the work I’ve done, I’m hoping to have the opportunity to talk to some of those people.”
How you continue at that point depends on what you’ve done to stay in front of clients — for example:
“Can you think of one or two friends or colleagues at work who might be interested in receiving the last market commentary I sent you?”
“Are there one or two people you work with who might be interested in coming along to the luncheon session at my office you’re going to be attending next week?”
“Can you think of one of your friends who might be interested in listening to the conference call we conducted last week”
“Do you know one person in particular who might be interested in talking to me, perhaps someone who has complained to you about lack of contact from their advisor?”
Or if you’re looking for a more low key approach, simply say:
“Based on the team I have in place, over the next year I have capacity for ten to fifteen additional clients. Should you be talking to a friend or colleague in the next while who is unhappy with their advisor and thinking about making a change, I would be happy to sit down with them and discuss their situation.”
While less likely to prompt an immediate response, at least this conversation plants a seed in your client’s mind.
Note that having these conversations entails additional minutes at the end of a meeting — you can get a big return for a small investment of time.
While it’s certainly possible to initiate a conversation with a prospective client from a standing start, the odds of success are much better if you’ve built credibility and familiarity with a prospect over the past months or years.
If you’re talked to someone in the past, now is the time to capitalize on the things you’ve done to provide direction and guidance to clients over the recent while.
Call up prospects you’ve been cultivating and say something like:
“In light of recent market events, I’m calling to see if you’re interested in sitting down for 20 to 30 minutes to do two things.
First, I’d like to quickly take you through the advice I’ve given to clients over the past while through meetings, phone calls and my written market reviews (adding in anything else you’ve done).
And second, if you’re interested, I’d be happy to talk about your own situation and perhaps provide you with a second opinion on how your portfolio is positioned given the current market circumstances and prospects for the period ahead.”
Even if the prospect doesn’t want to meet, you can still advance your cause by offering access to the material you’ve provided to your clients.
Not every prospective client will have a positive response to this overture and those who do respond positively may take a while to become clients — but by having these conversations you will plant seeds that will pay dividends in future.
Tags: Cash Balances, Client Communication, Current Conditions, Current Market, Evening Sessions, Face To Face, Job, Last Spring, Luncheon, Market Turmoil, Memory, Perfect World, Phrase, Portfolios, Priority, Prospects, Referrals, Twelve Months, Woes
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Wednesday, November 30th, 2011
The Benefits Of Being In The Learning Mode: Can you hear your clients?
by Stephen Wershing
If you want greater share of wallet and more referrals, periodically you need to be listening and acting on feedback. When it is time to receive that feedback, it is critical that you be in the “learning mode”. When I facilitate client advisory boards, I coach advisors to have a Zen mind. I encourage them to be in the state of openness. It is a little like practicing a form of meditation called mindfulness – accept ideas as they arrive, examine them without judgment, perhaps set them aside for further consideration, and move onto the next suggestion.
Getting into and staying in the learning mode is hard. As humans, we have a reflexive tendency to respond to questions with answers. Compounding that, we are in the business of providing answers. It is our job to share our expertise and tell people what to do. There are times, however, when we need to switch roles and get feedback on what we’re doing. If we want to improve our practices, we need our clients’ guidance. And in that situation, answering does not help. What do you learn when you answer? Nothing. How do you get better when you answer? You don’t.
Always seek value in these interactions. Ask what can I learn from this client? What can I learn from this situation? Look for questions to ask. If you are asked a question, try following the answer with another question. If possible, ask a question instead of answering. Here are some examples:
Before I answer that, what about this is important to you?
What would it mean to you if I could do that?
What would you say is the biggest concern you have that is prompting that question? (Which is a less threatening way of asking “why do you ask?”).
The need to discuss this was highlighted by a conversation I had with an advisor yesterday. We were discussing the agenda for his first client advisory board meeting. He said “I’m not sure what to put on the agenda, I don’t know what they want to hear about.” My response was that a meeting like this was not about what they wanted to hear, it is about what they have to say.
There is a time to answer. When it is a time to listen and the clients turn to speak, the longer you can stay in the learning mode, the more your clients will tell you how to do more business with them and how you can attract more clients like them.
Tags: Advisory Board, Advisory Boards, Agenda, Board Meeting, Coach, Guidance, Job, Judgment, Meditation, Openness, Providing Answers, Questions With Answers, Referrals, Share Of Wallet, Suggestion, Tendency, Zen Mind
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Wednesday, August 24th, 2011
At a recent workshop, I was asked about whether advisors are more likely to get a response from prospects by leaving a voice mail or by sending an email.
There are merits to both. Email is easy to send and easy for prospects to respond to … but also easy to ignore. Voice mail does a better job of seizing the listener’s attention (at least until he presses the delete button), but takes longer to deliver your message and is more intrusive as a result.
Rather than speculating, I asked a Toronto based advisor who prospects extensively among business owners to conduct a simple, three week experiment.
Vmail or email?
This advisor calls business owners from 7:30 to 11 every morning. His call focuses on the tax saving opportunities of individual pension plans (IPPs).
Over the past couple of years, he has developed a list of one thousand business owners who he has talked to briefly, who were not interested in meeting but agreed that he could email them information on IPPs and stay in touch.
Much of his current focus is circling back with these prospects that he has spoken with previously, offering a commentary from accounting firm PWC on new developments on IPPs arising from the last budget. When he gets voice mail, he leaves a short message reminding prospects of their last conversation and offers to send them the report.
When prospects call back, he tries to get them to agree to a 20 minute meeting at their office to review the commentary. If they are still resistant, he says he will email them the report and concludes by saying that he would like to stay in touch.
In week one, this advisor continued to leave voice mails and tracked the response rate. 11% of business owners for whom he left messages called him back. (Remember that he had spoken to them previously and they had agreed that he could send them information on IPPs and stay in touch.)
In week two, instead of calling and leaving a voice mail, this advisor sent an email. Only 8% of those emails were returned.
In week three, he left a very short message along the lines of:
It’s Dan Richards. We spoke last fall about the tax savings for business owners from individual pension plans. I have a report from PWC outlining changes in the last budget. I will send you details by email. Look forward to connecting.
He then sent the prospect an email providing a bit more information on the commentary, and asking them to let him know if they would like to receive an update on IPPs.
In this third week, he got return calls or emails from 14% of the prospects.
This is an example of field experiments, in which rather than speculating on what will work best, you conduct a controlled experiment. In this case, the answer is quite clear. When it comes to getting prospects to respond, your best odds are with neither voice mail nor email alone but rather a combination of the two.
As you think about your own challenges, consider whether there is examples like this one in which you can identify, test and measure the results from different tactics, with a view to running your business more efficiently.
Tags: Accounting Firm, Briefly, Budget, Business Owners, Easy Mail, Emai, Email, Job, Leaves, Listener, Merits, New Developments, Prospects, Pwc, Response Rate, Short Message, Vmail, Voice Mail, Voice Mails
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Wednesday, July 13th, 2011
Every advisor recognizes that a reasonably optimistic outlook is among the most important traits we can bring to the job, the necessary first step that makes everything else we do possible.These days, we need to put explicit strategies in place to stay motivated — for most of us, motivation doesn’t happen unless we make it happen.
We also need to tap into new research on ways to keep an optimistic frame of mind — an example of this research was the topic of my June column in Investment Executive, featuring the work of Dr. Martin Seligman, who ten years ago authored a book called Learned Optimism: How to change your mind and your life.
Seligman’s research has shown that optimism isn’t just something that we’re born with — rather we can develop the skill of maintaining a positive point of view even in the face of difficult circumstances.
Underpinning his theory of “learned optimism” is the notion that each of us develops either a pessimistic or an optimistic outlook. This outlook is not set in stone — rather it can be changed.
This arises from Seligman’s analysis of people’s “explanatory style” — how we explain negative events to ourselves. When something negative happens, as it inevitably will at some point, how we respond is a function of the extent to which we view the event on three key dimensions.
Permanent - Pessimists believe negative events will be permanent, while optimists believe that they will be temporary.
Pervasive — Pessimists believe negative events are universal, affecting everything they do. Optimists believe them to be specific and limited to individual circumstances.
Personal — Pessimists believe they are entirely responsible for negative events. Optimists tend to assign at least part of the responsibility to events beyond their control.
Seligman has isolated optimistic behavior as one of the defining characteristics of successful people. Using various techniques he’s developed, he predicted elections by analyzing each candidate’s explanatory style — generally, the most optimistic candidates win. (Ronald Reagan is a classic example of this.)
If you can make your explanatory style more optimistic, you’ll create more positive energy and hope for yourself, no matter how difficult or negative the circumstances with which you must deal. And by presenting a more optimistic outlook, you’ll be someone that existing and prospective clients are attracted to and feel better working with.
At the core of learned optimism is one powerful principle:
Your thoughts influence your feelings and your actions — and you can choose your thoughts.
To read more about exactly how to make this happen, go to Investment Executive
01 Jun 2009
Tags: Characteristics Of Successful People, Circumstances, Dr Martin Seligman, Explanatory Style, Extent, Frame Of Mind, Investment Executive, Job, Learned Optimism, Motivation, Notion, Optimistic Frame, Optimistic Outlook, Optimists, Pessimists, Point Of View, Set In Stone
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Wednesday, May 18th, 2011
As a financial advisor, your ability to grow is largely dependent on the amount of time you’re able to spend developing relationships. The key is to delegate most of the tasks related to an advisory practice to others, so that you are able to devote your time to attracting and retaining clients.
There are three management strategies when delegating tasks that allow you maximum your time with clients and potential clients:
- Optimization versus maximization
- Delegate functions
- Assign tasks by addressing Context, Purpose, Quantity, Quality, Time and Resources (CP-QQT/R)
In this article, we will look at the first of these strategies in more detail.
1) Optimization vs. Maximization
When dealing with your clients, you may get bogged down in trying to service all of them equally. With this approach, a maximization strategy, you’ll run out of time and energy fast.
To grow your business it’s important to implement an optimization strategy. Although client service is crucial to the success of your business, you need to optimize your service plan, that is, provide the most value you can to your highest value clients, and spend less effort on the others.
Why it is Important to Optimize, not Maximize
One of the advisors whom I coach had been in the business for ten years and has built a thriving practice. Like many advisors, Jeff started out marketing himself to people he already knew who were within five years of either side of his age—his natural market.
Jeff did such a great job serving those initial clients that many of them referred him to the friends or business associates they thought would benefit from his services. When I met Jeff, he was firmly established in the business making over $200,000.00 a year. Unfortunately, Jeff had a serious problem.
In our first meeting, he looked harried. As he rushed in he was flipping his cell phone closed and trying to straighten his wind-blown hair with his other hand. He was sorry he was a few minutes late, but he was just run off his feet trying to get from one client to the next. In fact, that’s why he had made time to see me. He had heard from a friend about the work I do and realized he could use my help.
In our first coaching session, Jeff painted a picture of his life for me. He worked five and a half days a week, and, some days it seemed to Jeff that he lived in his office. He made hurried phone calls, dictated letters to his assistant, and even wolfed down his lunch as he dealt with one service issue or call after another. His days were packed solid with client calls and service meetings, and it was difficult for him to spend more than 10 or 12 hours a week on sales to existing clients or meetings with prospective clients. His business was not growing and he was going crazy.
I suggested to Jeff that he relax and take time to work ON his business. He needed to take a step back, examine why his business had become so labour intensive, and start thinking about how to correct the problem before he burned out and started losing clients.
I then asked him to walk me through his current situation. He told me he had 300 clients, mostly middle income families, and a handful of very high-net-worth clients that he acquired by targeting the medical market. Those cardiologists, oncologists and plastic surgeons brought in more than 40% of his annual revenue even though they were less than 10% of his client base. He wished he had a few more of these clients.
Unfortunately, marketing was the last thing he had much time for recently. He was far too busy trying to serve all of his clients to pay much attention to filling his pipeline. Plus, he was sure that, even if he did acquire new clients, he wouldn’t be able to offer them the level of service he wanted.
I suspected we were reaching the crux of Jeff’s problem. I asked him to describe for me how much contact he had with his clients, and what he did for them. Jeff told me he wanted to impress each of his clients, not just with his ability to solve their problems, but also with his eagerness to help. As a result, each client received letters and calls on a monthly basis. He met with each of them at least annually, and, in some cases, quarterly. And, he had a personal rule that he would respond to any and all client inquiries within three hours during the business day. He had even begun a personalized quarterly newsletter for his clients.
Jeff believed this level of service set him apart from other advisors. All of his clients deserved the same red carpet treatment—not just the doctors who provided the majority of his revenue. Unfortunately, the service was killing him.
Obviously, Jeff had reached his ceiling of complexity. The sad truth I had to explain to him was that the business model he was following, although generating revenue, was not a good long-term strategy. By offering identical levels of service to all his clients, regardless of their value to him, he had been unintentionally following the same strategy as a not-for-profit business.
As I explained, he had been following a maximization strategy, instead of an optimization strategy. Jeff did not understand what you have to do to run a profitable business. And the results, as he was finding out, could be disastrous.
Jeff was a little shocked by what I told him. He’d never imagined he might be running a charity. But, as I explained, maximization is a not-for-profit strategy. In this strategy your aim is to maximize the benefit for all recipients. This was exactly what he was doing. For instance, if someone ran a charity devoted to ending world hunger, they would not be trying to end hunger in one person or one family, but for everyone, everywhere—just as Jeff tried to serve all his clients equally.
Optimization, on the other hand, means using the resources at your disposal to their greatest advantage or profit. For instance, in business, optimization often requires that you segment your clientele. Instead of providing a uniformly high level of service to all clients, and running the risk of burning yourself out, you strive to provide excellent service to your highest value clients and service consistent with the economic value of lower value clients. In order to reclaim his life, and then grow his business profitably, Jeff needed to completely re-tool his approach.
Over the next year, Jeff went through our Business Builder program. Although the course covered all areas of his business, he faced two specific challenges: segmenting his client base and developing a service plan. Once he had solved those problems he could market himself more aggressively and in a more targeted fashion to the medical market.
To start, Jeff identified his Ideal Client Profile and the 20 current clients or centres of influence most important to him. He analyzed his network and target markets.
Then he divided his clients into segments based on their value to his business. He created a service plan based on the optimization strategy he was now employing. He would offer his premium level of service only to his Top 20 and A clients. The other segments received fewer letters, calls and meetings according to their value.
Over a period of months Jeff learned to delegate service requests to his assistant in order to focus his efforts on the people most valuable to his business. He had to stop trying to serve everyone, and focus on serving his most profitable relationships. Only then could he free up time, energy and creativity to attract more high-value clients in the medical market.
One year later, Jeff and I met to review his progress. In the previous six months his non-recurring revenue increased 80% over the same period the year before. Doctors now made up 30% of his clients and that number is steadily rising. He projected that, in the next year, he would more than double his income. The best news for Jeff was that he no longer runs ragged—he’d stopped working weekends and nights, and was regaining his peace of mind.
Norm Trainor is the founder of The Covenant Group, a company specializing in practice development for advisors. For further information, visit his Web site at www.covenantgroup.com.
Tags: Amount Of Time, Business Associates, Business Service, Cell Phone, Client Relationships, Coach, Delegate Functions, Few Minutes, First Meeting, Friends, Job, Management Strategies, Marketing, Norm Trainor, Optimization Service, Optimization Strategy, People, Quality Time, Success, Value Clients
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Wednesday, June 16th, 2010
7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice — Back To Basics — effective listening is a crucial skill for internal auditors
This article is a guest contribution Tom Lewis and Gerald Graham, Institute of Internal Auditors.
TO BE SUCCESSFUL AT THEIR job, internal auditors must be able to write, speak, and listen effectively. Of these three skills, effective listening may be the most crucial because auditors are required to do it so often. Unfortunately, listening also may be the most difficult skill to master.
Effective listening is challenging, in part, because people often are more focused on what they’re saying than on what they’re hearing in return. According to a recent study by the Harvard Business Review, people think the voice mail they send is more important than the voice mail they receive. Generally, senders think that their message is more helpful and urgent than do the people who receive it.
Additionally, listening is difficult because people don’t work as hard at it as they should. Listening seems to occur so naturally that putting a lot of effort into it doesn’t seem necessary. However, hard work and effort is exactly what effective listening requires.
Internal auditors must listen to explanations, rationales, and defenses of financial practices and procedures. They are constantly communicating with fellow employees whose backgrounds range from accounting to finance to marketing to information systems. In addition, explanations by fellow employees of any “unusual” practices often pose a significant challenge to an internal auditor’s listening skills. Auditors can use the following techniques to improve these skills.
1. CONCENTRATE ON WHAT OTHERS ARE SAYING. When listening to someone, do you often find yourself thinking about a job or task that is nearing deadline or an important family matter? In the middle of a conversation, do you sometimes realize that you haven’t heard a word the other person has said? Most individuals speak at the rate of 175 to 200 words per minute. However, research suggests that we are very capable of listening and processing words at the rate of 600 to 1,000 words per minute. An internal auditor’s job today is very fast and complex, and because the brain does not use all of its capacity when listening, an auditor’s mind may drift to thinking of further questions or explanations rather than listening to the message at hand. This unused brainpower can be a barrier to effective listening, causing the auditor to miss or misinterpret what others are saying. It is important for internal auditors to actively concentrate on what others are saying so that effective communication can occur.
2. SEND THE NONVERBAL MESSAGE THAT YOU ARE LISTENING. When someone is talking to you, do you maintain eye contact with that person? Do you show the speaker you are listening by nodding your head? Does your body language transmit the message that you are listening? Are you leaning forward and not using your hands to play with things? Most communication experts agree that nonverbal messages can be three times as powerful as verbal messages. Effective communication becomes difficult anytime you send a nonverbal message that you’re not really listening.
3. AVOID EARLY EVALUATIONS. When listening, do you often make immediate judgments about what the speaker is saying? Do you assume or guess what the speaker is going to say next? Do you sometimes discover later that you failed to interpret correctly what the speaker was telling you? Because a listener can listen at a faster rate than most speakers talk, there is a tendency to evaluate too quickly. That tendency is perhaps the greatest barrier to effective listening. It is especially important to avoid early evaluations when listening to a person with whom you disagree. When listeners begin to disagree with a sender’s message, they tend to misinterpret the remaining information and distort its intended meaning so that it is consistent with their own beliefs.
4. AVOID GETTING DEFENSIVE. Do you ever take what another person says personally when what her or she is saying is not meant to be personal? Do you ever become angry at what another person says? Careful listening does not mean that you will always agree with the other party’s point of view, but it does mean that you will try to listen to what the other person is saying without becoming overly defensive. Too much time spent explaining, elaborating, and defending your decision or position is a sure sign that you are not listening. This is because your role has changed from one of listening to a role of convincing others they are wrong. After listening to a position or suggestion with which you disagree, simply respond with something like, “I understand your point. We just disagree on this one.” Effective listeners can listen calmly to another person even when that person is offering unjust criticism.
Tags: Accounting, Back To Basics, Effective Listening, Explanations, Family Matter, Fellow Employees, Financial Practices, Harvard Business Review, Information Systems, Institute Of Internal Auditors, Internal Auditor, Job, Listening Skills, Marketing, Rationales, Voice Mail
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