When you want to grow your business, your immediate thought might be to increase your client base. However, it’s important to understand that not every person you meet would be an appropriate addition to your practice.
Certain individuals simply won’t be a good fit. The consequences of taking them on as clients can actually harm your business, by consuming a significant amount of energy and resources that cannot be justified by their assets. And working with a client who is not a good fit is also unfair to the client, who could be receiving better service elsewhere.
Sara Gilbert, founder of Strategist in Montreal, suggests three examples of the types of prospects to avoid — and possible exceptions to the rule:
> Prospects who are not in your target market
You should have an ideal-client profile, which allows you to build your business based on the needs of a group with common characteristics.
If you take on a client outside of this market solely based on the client’s sizeable assets, you might end up paying in other ways. Having to learn more about the needs and required services for these unfamiliar clients, for example, could drain your time and may distract you from providing excellent service to your established clients.
Exceptions include taking on a client in order to strengthen an existing client relationship. For example, you might take on the adult child of a top client as a service to that client.
Or, you might take on a client at the request of a valued centre of influence.
> Prospects who require you that change your business model
Avoid prospects whose expectations of the relationship are significantly different from what you provide — even if that prospect fits your ideal-client profile in other ways, Gilbert says.
For example, you are a discretionary portfolio manager who works with established lawyers. Your prospect fits this profile but he wants to be hands-on in the investing process and expects frequent updates on changes to his portfolio. If fulfilling those requests is inconsistent with your way of doing business, that person is probably not a good fit for you.
There is an exception to this rule, says Gilbert: “Take someone if it’s a client who is taking you to where you want to be.”
In other words, if the client requires a change in your business that you have been planning to make, then bring him on! This new client will provide a taste of what making that change will be like.
> Prospects whose personalities conflict with yours
If a prospect fits your client profile but is so different from you in personality that you dread communicating with him or her, this person is not for you, Gilbert says.
Look for your “natural market,” Gilbert says, people you feel comfortable talking to.
For example, if you’re an advisor who prefers relaxed, unhurried meetings consisting of in-depth discussions about the financial plan, you won’t enjoy working with someone who keeps checking his watch and frequently mentions his busy schedule.
Personality conflicts can also harm the potential to grow your business. Even if you retain this client, you won’t be encouraged to enhance your service to him or her, Gilbert says, which will make referrals unlikely.