Research shows that clients who are engaged are more loyal, more profitable and more likely to provide referrals than other clients.
To engage your clients, you must focus on what’s important to them and deliver on that, says Julie Littlechild, president of Advisor Impact Inc., with offices in Toronto and New York. “A happy by-product of that is that those relationships are more profitable.”
An engaged client is satisfied with your services and loyal to your business — and actively provides referrals, according to the 2010 report Economics of Loyalty: Anatomy of the Referral, conducted by Advisor Impact, Charles Schwab Advisor Services and researchers at Texas Tech University.
That report segments clients into four groups: disgruntled, complacent, content and engaged. Of those groups, engaged clients represent the smallest portion — 24% — yet they provide the majority of referrals.
Follow this advice to increase client engagement and strengthen your business:
> Identify your ideal client
It’s easiest to engage clients when they’re the right fit for your business. To find your best market, Littlechild recommends, list your 10 most successful client relationships. Remember to look beyond revenue to the qualities that make you enjoy working with those clients.
Afterwards, use the characteristics of those accounts to shape your discovery questions. Those questions will identify whether the prospect is a good fit and increase the chance of a successful relationship.
> Provide relevant information
To help build trust, arrange frequent and informative meetings with your clients.
Engaged clients expect to see their advisors more often throughout the year than do other groups, Littlechild says. These meetings should be both frequent and relevant to clients. For example, you can explain economic news beyond the client’s portfolio or emphasize the importance of long-term investing during these meetings. Doing so will build your clients’ confidence in you and enable you to better serve your clients.
“It’s about having a deeper and more meaningful conversation with your clients,” Littlechild says.
> Ask for comments
Make your clients feel that they have a stake in your business by asking for feedback.
Littlechild recommends surveying clients to discover what information and resources interest them. For the best results, survey your clients formally every year or every two years in addition to occasionally asking for feedback during meetings.
Client input helps you refine your practice standards and can move clients from feeling satisfied to being engaged, Littlechild says, and that increases the potential for referrals.
> Trim your book of business
To increase the proportion of engaged clients you serve, it may be best to trim your book.
By handing off expensive, time-consuming relationships to other advisors for whom they might be better suited, you increase the profitability of your practice.
IE