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?

Need vs. Value

You have to be careful providing people what they need. At a certain point, meeting needs requires a certain level of you imposing your thoughts on another person.  Sometimes this works, such as when a person actually has a need that they are completely unaware of, like the need for life insurance. But many times, you make judgments about where they are and where they should go, and how they should get there. Best case is you are perceived as mildly helpful. Worst case, you are seen as arrogant. more about you that them.

On the other hand, focusing your effort of discovering what they value puts you in their world, and follows the path of least resistance to get them to a better place for them. I’ve seen the interaction between and advisor who values a simple and straight-forward approach with a wholesaler who believes everyone has to look at the complexity and learn certain things before acting. Clash of value and need, and never ends pretty.

Take a look at how you approach people you are trying to help. think about what they might need, find out what they value, and close the gap between them.

Sour Grapes

We all know the fable from Aesop. Crow has grapes. Fox wants grapes. Crow won’t give them over, no matter how fox uses his guile to get them. Fox declares the grapes are sour and leaves (probably muttering things under his breath).

I remember this as a cautionary tale from the crow’s perspective – that people tend to diminish the value of something you have that they can’t (this interpretation has been supported by every elementary school teacher I had).

I’ve realised this is too simple. We need to see it from the perspective of the fox, and become better by doing so.

The fox felt he wanted the grapes, and that entitled him to them. When he didn’t get them, he diminished their value in his mind, and tried to do so in the mind of the crow as well. He settled on cynicism. What if he thought of it in a different way?

What if the fox asked the crow how he might find grapes like those that he could reach? What if he tried to figure out some type of trade with the crow for something the bird would value? what if he simply accepted that the grapes were not his to have, and he focussed his attention and energy pursuing something that he was more likely the obtain?

As an advisor, what do you do when a sale does not happen, or a very valuable prospect does not want to do business with you? Do you essentially call ‘sour grapes’?

Ephemeral and permanent

What do you spend your time on? 

Do you spend your time focused on things that will change in the next year, month, day or shorter? Things like the market, the news, opinions of industry pundits and the momentary fears these things create in both you and your clients? 

Or do you focus on the things that will not change over a lifetime or beyond? Things like eventuality of birth, work, retirement and death and the needs these create? Processes that recognize the ephemera and keep short-term fears from guiding decisions, like diversification, rebalancing, and buying the right type and amount of insurance as early as you can? 

One choice leads to fear and uncertainty. The other leads to hope and calm for you and your clients. 

Choose wisely. 

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.