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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