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Every advisor wants clients to be 100% satisfied, especially those top clients who drive profitability. It takes three things to ensure that your very best clients feel well served. Regrettably, most advisors do a mediocre job on the first two and an abysmal job on the third.
The good news is that there is help at hand, with the airline industry providing a roadmap of how to treat your most important clients. This is perhaps the only area where airlines can be a useful role model for customer service, as legacy airlines have been justifiably excoriated for the hellish experience they inflict on run of the mill passengers.
But life for their best customers is a very different story – and one from which advisors can learn.
My articles, Why Top Performing Advisors are Exiting the Business and Today’s #1 Imperative: Differentiate or Die, argued that only those advisors willing to embrace fundamental change would flourish. When it comes to managing the experience that your clients have in working with you and your team, you need to get three things right:
- Use the right criteria to identify clients who deserve priority – most advisors do a poor job on this.
- Group those clients into the right categories for special treatment – the typical advisor does a poor job here as well.
- Dramatically differentiate the experience that top clients have working with you – on which the majority of advisors do an abysmal job.
Step one: Identify your best clients
It’s long been standard practice to segment top clients. The difficulty is that most advisors use crude measures to assess client value, looking exclusively at assets or income generated on accounts.
To get this right, you need to take a much more nuanced view on what determines a client’s value. Here are some of the things that make a client valuable beyond assets and income generated:
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- To what extent have they moved to a fee-based platform?
- Is their account growing, flat or shrinking?
- Are they under 55 or over 75?
- Are they connected to other accounts of friends and family members?
- What’s your relationship with the client’s heirs?
- Does this client have a financial plan in place? Is it with you?
- Have they provided referrals who fit your client profile?
- How demanding are they in terms of time?
- Are they a compliance risk?
- Do they fit within a defined client niche on which you focus?
- Are they connected to potential new clients?
- Are they pleasant to work with – when you meet with them, do you walk away energized or drained?
At the end of this article is a matrix that provides more information on these criteria and lists possible scoring values as a starting point. Pick four to six criteria that are a fit for the way you work and select a point value for each from 1 to 10. When you apply that to your client base, each client will end up with a point value that accurately represents their importance. This is the first step to ensuring that your most valuable clients get the treatment they deserve.
Step two: Group clients into categories
To make it logistically feasible to differentiate treatment for your clients, you need to group them into categories – if you have 30 high-value clients, it’s tough to have 30 entirely different approaches to delivering value. Yes, there will always be some customization, but you want to start with a common service proposition for clients that represent roughly the same value.
Historically, most advisors have segmented clients into three categories – some refer to these as A, B and C clients, other times they’re called gold, silver and bronze. The difficulty is that lumping your top-third of clients into one category doesn’t do your most important clients justice – after all, you don’t want to treat your #6 client and your #60 client the same way.
Consider dividing clients into five categories:
Step three: Differentiate the experience for top clients
In thinking about how to treat clients, start by establishing a baseline of communication, advice and service that you will feel good about delivering to everyone. If a client doesn’t merit the investment of time and energy to deliver those minimum thresholds, they shouldn’t be a client.
Once you’ve got that baseline in place, your next step is to dramatically differentiate the experience for your most important clients. The operative word here is “dramatically.” The problem isn’t that you don’t treat your top clients better than average clients – after all you meet with them more often, call them regularly, you invite them to lunch and any service issues are dealt with promptly. The issue is that even doing all these things, the experience for top clients doesn’t look all that different compared to what average clients receive.
Contrast that with how legacy airlines treat their very best passengers. Ever since the introduction of frequent flyer programs in the 1980s, airlines have had separate check in lines for frequent flyers, lounges in which they can wait, upgrade certificates and the opportunity to pre-board flights.
But recently, United, American and Delta dramatically upped the stakes if you qualify as one of their very best customers. A New York Times article described some of the perks if you qualify for United’s ”global services” status:
- Automatic upgrades and by-invitation VIP lounges
- Concierges at major airports to help stickhandle any issues that might arise
- Shuttles directly from lounges to their plane
- For passengers who are delayed, flights can be held
Say what you will about the atrocious fashion in which United deals with its average passengers; it treats its best passengers exceptionally well.
When it comes to your best clients, you need to adopt a similar mindset. In the past year I’ve had half a dozen advisors describe client recognition events, perhaps a holiday brunch or wine tasting, that they considered successful because they had 100 clients in the room. When I asked how many of their top 20 clients had made it out, after a pause the normal answer was one or two.
Of course, to have top clients feel well served, you need to go way beyond where you take them to dinner. Ten examples of standing out in terms of the value you deliver to your best clients:
- Most clients don’t enjoy the drive to meet at your office. For top clients, offer to meet at their business or home.
- Some advisors find creating an investment-policy statement (IPS) for every client too time consuming. Even if you can’t do this for all your clients, you can do this for your most valuable clients.
- Clients with substantial investment portfolios often use multiple advisors. For large clients, one advisor offers to have a member of his team each quarter consolidate all their investment accounts into one spreadsheet. The advisor makes it clear that he never sees these clients’ overall investment pictures unless they first give him permission.
- Another advisor has someone on staff who handles the day-to-day financial affairs of elderly clients, including paying bills. For clients with aging parents, he offers this as an option, waiving the normal cost.
- One advisor gives her top clients the chance to have a late 20s associate on her team work one-on-one with their kids or grandkids. For teens gong to university, the associate will talk about budgeting and use of credit cards. For young adults in their 20s and 30s, the conversation focuses on setting financial goals and establishing a path to hit those goals.
- One successful advisor has found that getting key clients’ accountants to sit in on annual reviews can avoid complications in coordinating investment decisions and tax planning considerations. For his top clients, he offers to pick up their accountant’s hourly fee to sit in on that meeting. Most thank him and don’t take him up on that, but even if he does write a check for $500, that’s money well spent in the message he sends about his commitment to improving the outcome for his most valued clients.
- For his top 20 clients, each December one advisor offers to match a $250 contribution to their favorite charity. Not only has his compliance department told him this is not subject to the normal limitation on client entertainment, but it gives him a sense of which charities are most important to his very best clients. In his year-end email, he then lists the charities he’s supported as a thank you to al clients for the chance to work together.
- One advisor offers quarterly breakfast sessions for all his clients at which representatives from outside money managers discuss their views on the market and how they’re positioning portfolios. He doesn’t invite his top 30 clients to those breakfasts, however, instead inviting them to a private lunch at a local country club – and as a result consistently gets six to eight top clients out to those lunches.
- For years one team of advisors has hosted annual client evenings with outside speakers. They’ve had economists talking about the outlook for the economy, a gerontologist outlining the challenges of aging parents and a sports psychologist discussing lessons from Olympic athletes. To keep costs down, these events start at 7:30 and are promoted as offering dessert and coffee.
But in advance of the evening events, top clients are invited for a private session with the speaker over a light dinner. While some clients stay on for the full session, many leave afterwards, satisfied with the chance to hear from the speaker in a small group.
- Finally, don’t forget the personal touches. If a top client is coming into the office for a meeting, give your receptionist a heads up so that your best clients can be greeted by name and offered their favorite beverage without having to ask.
An example of how airlines treat top flyers
Some years ago, I had a first-hand experience with how airlines treat their very best customers. I was spending much of my life in the air and, as a result, for several years I qualified for super-elite status with Air Canada, the primary airline that serves Toronto, where I have lived for many years.
On one occasion, I was on an overnight flight to London, using points to book an upgrade to business class. As I walked off the flight there was a guy in his 30s waiting, dressed in a red blazer.
“Mr. Richards?” he asked.
When I confirmed that I was indeed Dan Richards, he went on: “My name is Patrick, I’m the Air Canada concierge in London. I wanted to greet you this morning. I’d be happy to show you a short cut to customs and then if you have time escort you to our lounge, where you could shower and have breakfast.”
As we were walking to the lounge, he asked if there were any other ways he could help me. As it happened, my 13-year old daughter was on a flight that morning to visit a friend and I asked Patrick if it was possible to have a colleague meet her plane to ensure that she connected. “Consider it done,” said Patrick. “I’ll contact the concierge there right now and make sure someone meets your daughter.”
I thanked Patrick and then as a final question, asked him how he had recognized me as I exited my flight.
He smiled in response. “For our most valued customers, we have a short physical description on their profile and for you it was easy.” Then as he looked at my balding frame he delivered the punch line: “All your profile said was ‘Looks like George Clooney.’”
Template for identifying your top clients
Here is a starting point to use in putting together the scoring grid to identify the value of every client, with the goal of ending up with an accurate picture of your most valuable 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.
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