Airlines like American, Delta and United are unlikely role models for customer service. In fact, along with cable and phone companies, the industry consistently antagonizes its customers. (Check out this hilarious video-gone-viral, United Breaks Guitars.) Yet there is one area in which these airlines excel and from which advisors can learn – and that’s how they treat their very best customers.
Making top customers feel special
Everyone is familiar with the Pareto Principle, more commonly known as the 80-20 rule: For most businesses, 80% of revenue comes from 20% of customers. But few advisors are familiar with a growing body of research showing that profit skews even more dramatically than sales. Research by Columbia professor Larry Seiden suggests that for many businesses, the 20% most-profitable customers account for 100% of profitability. At the same time, the 20% least-profitable customers can actually cost businesses 100% of their total profits – an insight that has led companies like Fidelity and Best Buy to take dramatic steps to deal with unprofitable customers.
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Most advisors recognize that they should give their largest clients special treatment. Depending on the advisor, he or she may:
- Offer to meet with those clients more often
- Return those clients’ messages first
- Develop more detailed financial plans for large clients
- Meet at the time and location that suits those clients, rather than asking them to come to the advisor’s office during regular business hours
- Invite them to lunch after meetings
For most top clients, this experience feels only slightly different than what an average client receives. Contrast that with what United, American and Delta offer their top customers:
- A dedicated phone line answered by its best-trained staff to take reservations and deal with any issues
- Special check-in lines and priority boarding onto flights
- Fast-tracking through the security screening process
- A lounge with complimentary drinks and snacks in which to wait for flights
- Priority when it comes to upgrades and booking free flights using frequent flyer miles
- Concierges at major airports to greet top passengers and ease any issues
And for United’s very top passengers, the airline offers its secretive Global Services Program that will hold connecting flights and zip passengers directly to planes waiting on the runway.
This kind of special treatment for top customers isn’t unique to airlines. Hotel chains like Starwood, Marriott and Four Seasons track customer preferences and have special lounges, concierges and dedicated phone lines to treat their best customers in a way that makes them feel special and ensures their loyalty. It’s little wonder that frequent flyers work incredibly hard to ensure that each year they requalify for the top levels of loyalty programs at their favorite hotels and airlines.
Ditch process and scalability
Some advisors might respond that these kinds of programs aren’t broadly scalable and don’t lend themselves to an automated process that can be applied across their client base.
That is exactly the point.
By all means, focus on consistent, repeatable processes for the majority of your clients. But for the top 5%, look for things that clients will find of exceptional value and recognize as specially targeted for them, precisely because they aren’t scalable. Some examples:
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Better advice: Just as United doesn’t get its priority passengers from point A to B any faster, most advisors don’t set out to give their top clients great advice and everyone else advice that’s only okay.
But advisors can do things to create more positive outcomes for top clients. Some advisors will go the extra mile in having an employee work one-on-one with top clients to track spending for financial plans.
I’ve written about advisors who work with top clients to create cash flow forecasts for retirees and to consolidate all of their account information on one spreadsheet.
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Better service: One advisor who runs a billion-dollar practice asked his top assistant to take on the role of “client concierge” for his top 20 clients. This assistant sits in on meetings and phone calls with these client, She gives these clients her cell phone number and makes it clear that she’s available evenings and weekends, should they ever need to reach her. The advisor pays the assistant a bonus for making herself available in this fashion, even though clients very rarely call her. In that respect, this is a high-value low-cost initiative – the offer makes a big impact on clients but isn’t broadly used (although there was one memorable 2 a.m. call from a client asking for the name of a lawyer, because the client’s son was being held in jail.)
Another advisor positions herself as a “connector” for all her clients, offering to introduce them to a full range of professionals and tradespeople with whom other clients have had a good experience. While she doesn’t try to negotiate discounts on price, she makes it clear to the people to whom she makes referrals that she expects her clients to get priority attention. For her top clients, however, she’ll go above and beyond. She will ask people in her network who attended elite universities to meet with children of top clients applying to those schools. She has had her assistant spend Saturday morning on the phone with a client who was throwing a wedding that afternoon and had just heard that the photographer had broken his leg.
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Addressing hot buttons with parents and children: Few things stress clients more than
issues with their parents and their kids – and some advisors recognize this by helping address these
hot-button issues.
One advisor offers to handle bill payment for the parents of his top clients. This same advisor has
relationships with a consultant who has set up a practice to help seniors transiton from living
independently to a retirement or nursing home.
Another has one of his associates in her 20s offer to meet with the children of top clients when
they’re going off to college to talk about things like budgeting and managing credit cards. When it
comes time for these kids to buy their first cars or houses, she’ll sit down to discuss what they can
afford and sometimes will accompany them to the car dealership to help negotiate the price or the bank to
talk about the terms of their loan.
Along the same lines, another advisor meets with the university-age children of top clients to talk about
their career interests and sets up summer job interviews with companies that other clients run, on the
understanding that she will reciprocate in helping secure summer employment for their kids and grandkids.
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Client entertainment and recognition: Most successful advisors recognize the power of
well-run events to stay top-of-mind and solidify client bonds. But some advisors tailor events for their
very best clients to make a special impact.
One advisor invites clients to semi-annual evening talks from experts on financial and non-financial issues.
For most clients, the evening begins with dessert and coffee at 7:30 before the talk begins at 8 – but
his top clients get invited to a private reception with the speaker, with wine and hors d’oeuvres and
a signed copy of the speaker’s book.
Another hosts intimate evenings for three to five top client couples in private rooms at local restaurants,
accompanied by wine tasting and a short visit from the chef — again, with a signed copy of the
chef’s book.
A third advisor invites 20 select clients, their spouses and their accountants to an annual morning at the
Four Seasons Hotel in his city. Starting with breakfast at 8:30 a.m. and ending with lunch, he brings in
speakers from his firm and outside experts to talk about the pressing issues of the day.
Last year, I wrote about the most memorable
client thank-you ever, in which an advisor arranged for his largest client to have the opportunity to conduct a
local symphony orchestra.
Every advisor will take a different route to recognize top clients – the examples above are simply examples.
But the next time you meet with your team, why not take 20 minutes to circulate this article and do some
brainstorming about what you can do to recognize your very top clients? Your best clients may not represent 100% of
your profitability, but given that pricing for large accounts typically generates profits that are well above the
norm, consider whether you too shouldn’t invest the time and effort to lock in the loyalty of your most
important clients.
Dan Richards conducts programs to help advisors gain and retain
clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his
written commentaries, go to www.danrichards.com or
here for his videos.
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