Lessons from Air Canada

At the same time, the 20% least profitable customers can actually cost a businesses 100% of its total profit – an insight that has led companies such as FMR LLC (a.k.a. Fidelity Investments) and Best Buy Co. Inc. to take dramatic steps to deal with unprofitable customers.

Most advisors recognize that they should give their largest clients special treatment. Depending upon your service model, you may:

– offer to meet with top 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 into your office during regular business hours;

– invite these clients to lunch after meetings.

For most top clients, this experience feels only slightly different from what an average client receives. Contrast that treatment policy with what Air Canada offers its most frequent flyers:

– 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;

– fast-tracking through the security screening process;

– a separate departure lounge, with complimentary drinks and snacks;

– 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.

Special treatment for top customers doesn’t end there. For United Airlines’ very top passengers, that airline offers its secretive Global Services Program, which will hold connecting flights and zip passengers directly to planes waiting on a runway.

Hotel chains such as Starwood, Marriott and Four Seasons track client 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 they qualify each year for the top levels of loyalty programs with their favourite airlines and hotels.

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 an advisor’s client base. But that is exactly the point. By all means, focus on consistent, repeatable processes for the majority of your clients. But for the top 5% or 10%, look for things that these clients will find to be of exceptional value and recognize as being specially targeted toward them, precisely because they aren’t scalable.

Here are some examples:

– Better advice

Just as Air Canada doesn’t get its priority passengers from Point A to B through the air any faster, most advisors don’t set out to give their top clients great advice and everyone else advice that’s only OK.

But you can do things to create more positive outcomes for your 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. And I’ve written about advisors who work with top clients to create cash-flow forecasts for retirees or consolidate all of their account information on one spreadsheet.

– Better service

One American advisor who runs a billion-dollar practice has 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 clients. She gives them her cellphone number and makes it clear that she’s available evenings and weekends, should they ever need to reach her.

The advisor pays this assistant a bonus for making herself available in this fashion, even though clients rarely call the assistant. 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; the client’s son was being held in jail and the client couldn’t reach his usual lawyer.)

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 good experiences. Although this advisor 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 this advisor’s top clients, however, she goes above and beyond. She asks people in her network who attended elite universities to meet with children of top clients applying to those schools. This advisor once had her assistants spend Saturday morning on the phone looking for a wedding photographer for that afternoon; the photographer who had been hired to photograph the wedding of a client’s daughter had broken his leg.

– Dealing with clients’ families

Some advisors recognize that few things stress out clients more than issues with their parents and their children.

One advisor offers to have a staff member handle bill payment for the parents of his top clients. This advisor has relationships with a consultant who has set up a practice to help seniors make the transition from living independently to a retirement or nursing home.

Another advisor has an associate, who is in her 20s, offer to meet with the children of top clients when they’re going off to college to talk about things such as budgeting and managing credit cards. When it comes time for these kids to buy their first car or house, this associate discusses what these young people can afford and sometimes accompanies them to a car dealership to help to negotiate the price or to the bank to talk about the terms of a loan.

Along the same lines, another advisor meets with the university-age children of top clients to talk about their career interests. This advisor sets up summer-job interviews with companies run by other clients.

– Client appreciation

Most successful advisors recognize the power of well-run events to stay top of mind and solidify client bonds. Some advisors tailor events for their very best clients in order to make a special impact.

One advisor invites his clients to semi-annual evening talks from experts on financial and non-financial issues. For most clients, such an evening begins with dessert and coffee at 7:30 p.m. before the talk begins at 8 p.m. The advisor’s 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 advisor hosts intimate evenings for three to five top client couples in private rooms at local restaurants, accompanied by a wine tasting and a short visit from the chef – again, with a signed copy of the chef’s book.

A third advisor invites 20 top 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, this advisor brings in speakers from his firm and outside experts to talk about the pressing issues of the day.

And for a really exceptional example of recognizing a high-value client, I wrote last year about the most memorable client thank-you ever, in which an advisor arranged for his No. 1 client to conduct a local symphony orchestra.

Every advisor will take a different route to recognize top clients – above are just a few examples. But the next time you meet with your team, why not take 20 minutes to brainstorm 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 should invest the time and effort to lock in the loyalty of your most important and profitable clients.

Dan Richards is CEO of Clientinsights (www.clientinsights.ca) in Toronto. For more of Dan’s columns and informative videos, visit www.investmentexecutive.com.

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