The Magic Question For Growing Your Business

Wednesday, January 25th, 2012

Here’s a sim­ple idea to help you build a great business:

• Every time you need to make a deci­sion about your busi­ness, ask your­self “How will this impact client satisfaction?
• Every time you spend money for your prac­tice, ask your­self “How will this impact client satisfaction?
• Every time you make a staffing change, ask your­self “How will this impact client satisfaction?
• After a client meet­ing or inter­ac­tion, ask your­self, “What did I do in today’s meet­ing to improve client sat­is­fac­tion for this client?” and “What should I do in our next meet­ing to improve client satisfaction?”
• Every time you are pre­sented with a client com­plaint, ask your­self the ques­tion “Did I seize the oppor­tu­nity to turn this client com­plaint into an oppor­tu­nity to improve client satisfaction?”
• At the end of the day before you go home, ask your­self, “What did I do today to improve client satisfaction?”

Fred Reich­held is a thought-leader in the areas of client loy­alty and sat­is­fac­tion. In his book, The Ulti­mate Ques­tion (“How likely is it that you would rec­om­mend us to a friend or col­league?) states that if you can increase your Net Pro­moter Score ((Per­cent­age Pro­mot­ers (9 or 10 scores) – Per­cent­age Detrac­tors (0 – 6 scores)) by 12%, you can dou­ble the growth rate of your business.

If you refer to our blog enti­tled What’s the Com­pound Growth Rate of Your Busi­ness and What’s That Cost­ing You? and use the embed­ded spread­sheet, you can cal­cu­late that a $50 mil­lion busi­ness at a com­pound growth rate of 10% will grow to approx­i­mately $130 mil­lion AUM over the next 10 years. At a 20% com­pound growth rate, it will grow to $310 mil­lion AUM. If you were to sell your busi­ness at the end of 10 years, the dif­fer­ence in total pre-tax income is just over $6 million.

By focus­ing on your processes for improv­ing client sat­is­fac­tion instead of results, like rev­enue or assets under man­age­ment, you will achieve greater results.  Focus on the process and let the results take care of themselves.

What’s the first step in achiev­ing and main­tain­ing sus­tain­able growth of 20%? Increase client satisfaction.

About Bob Simpson

Syn­chronic­ity Per­for­mance Con­sult­ing has been coach­ing finan­cial advi­sors since 1998.

Bob Simp­son, pres­i­dent and founder of Syn­chronic­ity has been involved, directly or indi­rectly in the finan­cial ser­vices indus­try since 1981. He has been a very suc­cess­ful finan­cial advi­sor with Nes­bitt Thom­son Inc., a major Cana­dian finan­cial insti­tu­tion. Between 1981 and 1989, he built a busi­ness with more than $120 mil­lion in assets under man­age­ment and was one of the first Cana­dian advi­sors to build a team.

You can fol­low Bob Simp­son via:

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Tags: 10 Years, 50 Million, 6 Million, Ask Question, Assets Under Management, Aum, Client Loyalty, Client Satisfaction, Colleague, Compound Growth Rate, Detractors, Focus, Fred Reichheld, Interaction, Magic, Net Promoter Score, Promoters, Satisfaction Client, Spreadsheet, Thought Leader
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