Clients, customers and consumers

Which ones do you have?

Clients are those folks that truly listen to your advice, and act upon it. While they may have moments of doubt caused by external forces (markets, other people’s experiences and stories, the media), they ultimately trust you and will let you keep them from making mistakes due to fear and greed. Only advisors can truly have clients (this extends beyond financial services into any business – my wife just bought a bike from a guy who really is an advisor in the truest sense – and she’ll buy her next one from him as well).

Customers are people who like you and buy from you, but their decision is based more on familiarity or accessibility. You are a comfortable and convenient choice. If you happen to run the only bike shop in town, and people can’t get to another bike shop, they buy from you when they want a bike. Their relationship with you is more fragile that you have with clients. When things become difficult, or a new option enters the market, customers may migrate away from you. Salespeople and craftsmen have customers.

Consumers have no loyalty other than maximizing benefit at a low price. They identify what they need, and shop for the lowest price (something the internet makes really easy).  As long as you maintain value at a low-cost, you are OK. Once either factor changes, consumers go elsewhere. This is the world of dollar stores. No room for advise here – it costs too much. This is the domain of order-takers and self-serve options.

Clients are rare and worth their weight in gold. Customers are good, but take a lot of work to maintain. Consumers are plentiful, but you will need to be a discounter who is not much more than a prospecting machine to grow your income at all.

Who do you want to do business with, and what are you doing to attract them?

Referable, introduce-able, remarkable

As advisors, you likely seek to add new clients to your practice.

It is great to get referrals. Clients who are willing to share the names of friends and colleagues who may find value in what you do is great. But it still results in making a contact that is only one step above a cold call. (‘Bob speaks highly of you, and thought we should chat’ – some call this a ‘warm call’. I consider it ‘tepid’ at best.)

Better is the introduction, where a client is physically there when you meet the potential client. This is great when it happens spontaneously at a party or event, but many times it still requires you to prompt the introduction.

Best is when a client talks about you to other people in a way that makes potential clients want to contact you. How do you get to this point? If you want people to remark about you and what you do, you need to be remarkable.

Do things for your clients that go above and beyond, that show you are someone who cares about clients beyond the premiums they pay or the contributions they make to their accounts. Give your clients a compelling story to tell others, and they will.

Who represents your brand?

As an advisor, you have a brand. A brand is simply just the images and emotions people have when they think about you and your practice. Some work hard to project a unique brand image, others borrow a brand from the company they work for. While you may think that you are the personification of your brand, you are not. A brand is really represented by whoever is speaking to and influencing your next new client.

For a manufacturer, that’s you – the advisor. You are the key influencer on the clients who buy their products. The best companies out there (in and out of the financial industry) are aware of this, and ensure they work with advisors who share their ideals and viewpoints, and align everything they do – from product offering to support to recognition – in helping those advisors represent their brand effectively. An advisor who can do this, who is authentic to the brand is worth their weight in gold.  On the flip side, an advisor who is not aligned to the brand can cause more damage to the brand than anyone who works in head office.

The same logic applies to your clients.  A great client who speaks passionately and openly about the value you have brought to them and their family represents your brand well. A client who complains openly, or even just agrees with other advisor’s clients about cost, or returns or lack of service damages your brand. More often than not, these complaints come from clients that you took on that didn’t appreciate what you represent in the first place (you know who they are  - the ones you really don’t like working with now). It is better to find clients who will represent your brand (you) well, align everything you do – from planning services to product selection to cost structure – to help these great clients represent your brand to your next great client, and the next.

The wrong way to prospect

As an advisor, you have two jobs: provide financial advice, and find people who are willing to pay you for that advice. Many advisors see the ‘finding people’ part as a numbers game (which is not their fault – everyone from Nick Murray to Granham espouses this sawhorse). Need a new client? Call/approach/ get introduced to enough prospects, and by virtue of probability, some of them will become clients. (Which, by the way, is the same logic those people who send you spam e-mails use…)

But as your practice grows, things change. You find out that you do your best work with and for specific clients, who likely look a lot alike. And now you have a big whack of clients who you should not be working with. So you ‘fire’ them, or hire someone else to service them, or (shudder) you ‘quiet file’ them, and keep receiving trailers for no service.

 What I suggest is stop playing the numbers game. Stop asking, “How can I talk to enough people to get a new client”. Rather, ask yourself, “How can I better define and communicate my value so the right clients are organically attracted to what I offer.”