Convey your value

– Why you’re not communicating your value

Of course, first of all, communicating your value requires that you have clear value to communicate. So, actually delivering compelling value is the first step. But just delivering superior value isn’t enough.

Below are four ways that advisors – even those who deliver good value – struggle to get their message across:

1. Fixating on things that clients take for granted

I recently talked to an advisor who used a template from a fund company to develop a long list of things that he does for clients. He posted this list on his website and shares it with clients in meetings. Among the items on the list are: returning phone calls, sending out duplicates of tax information and mailing out monthly statements.

All three of these and many other items on the list are things that clients take for granted, which, by definition, means that they don’t perceive these services as being valuable. This perception is like a restaurant telling you that part of the value it provides to justify its prices is clean cutlery, heating in winter and air conditioning in summer. There’s a cost to all of these, and the restaurant owner may see providing them as delivering value; but, to customers, these kinds of things are the cost of being in the restaurant business. By fixating on minutiae that clients take for granted, you undermine the more meaningful services you do provide to your clients.

2. Focusing on your process rather than client outcomes

Look at a typical advisor website and you’ll often see a graphic outlining the multi-step process that he or she uses to help clients achieve their goals. In past articles, I have explained why making your process the primary focus of communication is a mistake. What motivates clients is how they will be better off working with you. They are interested in your process only to the extent that it supports the outcomes that you claim to deliver.

3. Referring to outcomes in general rather than in specific terms

Even when focusing on outcomes, some advisors fall into the trap of using very general terms. “Reducing risk” and “saving taxes” both are hot buttons for clients and prospects. But to motivate clients and prospects, you have to dig deeper and provide more details on the outcomes that you deliver.

4. Being the same rather than different

The final trap relates to lack of differentiation. In a previous column, I described a conversation with an entrepreneur who had sold his business and interviewed three potential advisors to work with. This entrepreneur was impressed by them all, but was also struck by the sameness of many of the things the advisors talked about. The client ultimately selected the one advisor who differentiated herself by getting into specifics of how she had helped other clients in situations similar to his.

– Employing case studies

One way in which the winning advisor in the example above told her story was by using a relevant case study. The very best case studies have a consistent format and can be helpful when dealing with prospective clients who are trying to make a decision on the right advisor.

First, you start with the case study’s original scenario and the problem that client was dealing with that you had to solve. Then, you get into the specific actions that you and the client in your case study took to address the problem. (Here is where you can go into a little more detail on exactly what you did.) Finally, you get into the outcomes – what happened as a result of the actions you took and how the client is better off as a result.

The best case studies deal with issues that are similar to the those that the prospective client is dealing with. In the example above, the advisor used a case study featuring a business owner. She introduced it by saying: “Here’s an example of someone I helped whose situation has some similarity to yours. The specifics will vary, of course, but this might be helpful in giving you a sense of my approach.”

If you like the idea of using case studies to demonstrate the outcomes you can create, you might consider developing several case studies that reflect the various kinds of clients you deal with, So, for example, you might have one case study featuring a couple in the early stages of retirement planning, another dealing with a client who is just retiring and perhaps a third that focuses on a widow or a woman who is getting divorced after a long marriage.

– Getting your story across

In light of the importance of getting clients to perceive your value, here’s another approach that you might consider to tell your story. I was struck by how two successful American advisors take slightly different approaches to this challenge.

In an article in a U.S. publication that targets advisors, award-winning New Jersey-based advisor Debra Taylor outlined how she and one of her team members had prepared a one-page chart that summarizes all the things that Taylor and her team do to make clients better off. Taylor uses this chart with clients to identify issues that should be covered in client meetings. Taylor explains in her article how this chart has helped to engage clients and get them talking about important issues.

Headed “Your financial future,” Taylor’s chart lists 51 specific activities in seven categories. Those categories are:

• investment planning
• estate planning and charitable giving
• retirement planning
• risk management and insurance
• cash flow and budget
• assistance to loved ones
• income tax planning
   

What makes this chart work is that the activities are very specific, with each one intended to be the starting point for a conversation. For example, under “estate planning and charitable giving,” the following items are listed:

• wills
• power of attorney
• living will
• health-care proxy
• trusts
• irrevocable life insurance trusts
• estate taxes
• guardians for minor children
• charitable giving and trusts
   

The second article came from Michael Kitces, whose blog on financial planning issues is a must-read for many advisors. Kitces talks about the challenges of letting prospective clients know what you do to justify your fee, borrowing a solution from a prominent advisor coach. Here’s an excerpt from Kitces’ blog:

“In a recent blog post for ThinkAdvisor, practice-management consultant Angie Herbers made the case for creating an annual ‘client service calendar’ to show all of the work that is done for [existing and prospective] clients throughout the year. While the goal is not to make a list of absolutely every possible task that may be done, the purpose is to illustrate at least the key work and deliverables being prepared for the client throughout the year.”

The client service calendar might include items related to investments, such as a portfolio review and rebalancing analysis; financial planning activities, such as updated retirement projections, insurance and estate reviews, and end-of-year tax planning; reports and educational materials, such as quarterly performance reports, newsletters and annual reviews; and client events, such as client-appreciation events and educational seminars.

This tool is produced in the form of a full-year calendar, with one column for each month. Here’s what might appear under January:

• annual performance report/review
• capital gains tax reporting summary
• internal portfolio review and rebalancing analysis
• internal investment committee meeting
   

There is no single solution to communicating your value. Every advisor needs to find the route that works for him or her. But as you think about this challenge, consider whether adapting one of the approaches described above can help you to address this critically important issue for your business.

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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