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Are You Making These Mistakes With Your Clients?

We all have the best of intentions in our interactions with our “customers” … but sometimes life gets away from us. And we forget that the customer should be the focus of our business. Here are some common mistakes in the advisory business that I’ve seen firsthand or heard from financial advisors:

Mistake #1: Not building long-term relationships.

Over the course of 20 or 30 years, your fee-based clients not only will provide you with tens of thousands of dollars in fee income, but, if you serve them well, will introduce you to likeminded clients with assets—becoming wonderful advocates for your practice.

Marketers always say that bad news travels faster than good news, and that’s true of word of mouth marketing. One bad review from an unhappy client (even a small one—as minnow accounts often have friends or relatives who are bigger fish) can have a lasting negative effect on your reputation. If you’re not thinking long-term, you could fall into bad-review mode. And that’s not good. (That’s why you should choose your clients carefully—and then dazzle them with your performance.)

You can’t just concern yourself only with making an immediate sale or bringing on a new client. You need each new client to stick with you for the long-run, and become a “raving fan of your business. You must know your clients’ preferences, regularly seek their feedback and commit yourself to keeping them happy for the long-term.

Mistake #2: Not articulating the “why” behind your business.

We often assume that others know how valuable our work or skill is, but they don’t—unless we regularly remind them. In the case of advisory clients, they see they’re paying a 1% fee every quarter, but may not see their positive Sharpe ratio, or how well they’re performing compared to relevant benchmarks. (And why that stuff matters!) They might not see how you’ve optimized their distribution strategy to maximize their Social Security disbursements over their retirement. Or how you regularly review their insurance policies for cost-efficiency and to make sure they’re properly protected—that there will be no financial surprises on the horizon in the event of catastrophe.

Clients need to continually understand why what you do for them matters—what they’re paying you for. They need to know that you’re structuring their portfolio for taxes and risk. They need to feel that benefit. And you will need to repeat things so they’re never forgotten. At every review session, make sure you’re gently but consistently reminding them why your service is so valuable. This will go far in creating and sustaining a long-term relationship.

Mistake #3: Not delivering exceptional service—or not providing a memorable experience

We can often fall into a humdrum routine of “going through the motions” in our business life. But like in showbiz, the audience can tell when your heart’s not in it. Exceptional service –delivered with heart – cements relationships. Promptly returning phone calls, following up in a timely way on emails, being genuinely enthusiastic when you speak to your client—these are little things, but make big impressions.

My longtime CPA, for instance, always sounds like I’m his favorite client when we’re on the phone, and he’s thrilled to talk with me. (I’m sure I must be his favorite client!)

Obviously, it’s vital to have systems in place to ensure good service happens regularly. But as with my CPA, systems alone can’t deliver that memorable experience—you need to make an appropriate emotional connection with your clients.

I had the experience recently at the dentist’s office (we’re new clients) and it was a very large office, with dozens of staff, and they were very organized, and quite courteous, handling dozens of patients—but it struck me as a bit of a “dental factory” or a cattle call. I felt like I could wander around in there in get lost.

Most clients want to feel like your team is their team, that you know who they are as individual clients, and that they know who you are. (Not like they just wandered in off the street and your team is running them through the process randomly—like everybody else.)

Make sure you introduce clients individually to any team members who will be assisting them, and let clients know why this person is skilled and competent to take good care of them. This is especially important if the client initially built the relationship with you. They should feel like an individual, not a cog in a machine. Also, train your team members to cement relationships for the long-run, to connect emotionally with clients.

Or your mistakes might just end up losing you the client!

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