When You Describe Your Differences, Say What Others Say About You

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.

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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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The Behaviour That Erodes Client Confidence

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.”

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Tags: Background, Business Owner, Client Confidence, Contact, Full Attention, Instincts, Investor, Investors, Job, Skype, Successful Business
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How to Ensure Clients “Feel Valued”

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.

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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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Turning Market Woes into Prospecting Opportunities

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.

Exist­ing clients

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.

Prospects

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.

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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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The Benefits Of Being In The Learning Mode: Can You Hear Your Clients?

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.

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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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A Proven Way to Boost Your Response From Prospects

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.

Week One

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.)

Week Two

In week two, instead of call­ing and leav­ing a voice mail, this advi­sor sent an email. Only 8% of those emails were returned.

Week Three

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.

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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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Developing an optimistic outlook

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

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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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Three Strategies to Maximize Client Relationships

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:

1. Opti­miza­tion ver­sus maximization
2. Del­e­gate functions
3. 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​.covenant​group​.com.

Fol­low The Covenant Group at:

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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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7 tips for effective listening: productive listening does not occur naturally

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.

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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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