Hitting the hot buttons

The recent experience of one advisor, Susan, shows that tailoring your approach to focus on the “hot buttons” for each client and prospect makes your overall communication much more efficient and effective.

About a year ago, after delivering a talk at an industry conference, I was asked by Susan if I had 10 minutes to talk over coffee.

First, she gave me some quick background, describing how she had entered the financial advisory business about 20 years ago after working in a sales role in the high-tech industry. She outlined her success in building her client base and in surrounding herself with a strong team.

Then, Susan got to the issue that was troubling her:

“At a recent planning session with my team, we talked about the erratic response from all the effort we expend on behalf of our clients. We do all the right things. We create a written financial plan, hold annual reviews with clients to update those plans and we are in regular touch with clients on the phone. We send everyone a quarterly newsletter. We do an annual thank-you dinner for all of our clients. We invite our top clients to special outings over the course of the year and send our very best clients a holiday gift.

“Some clients are very appreciative. But many take all of this for granted and we don’t get any real acknowledgement from them. Some clients don’t even respond to calls and emails to set up meetings or invitations for our annual dinner or special events.

“All of this activity puts a lot of strain on my team. I know for a fact that we do a lot more than many other advisors who are just as successful. My team and I feel frustrated by all the things that clients don’t seem to notice or appreciate. I have been questioning whether I should pull back on some of this activity.”

– “What sets your advisor apart?”

After Susan described her issue, we talked about the fact that clients often take appreciation gifts and events for granted and that large-scale events can be a turnoff for top clients. But there was a broader and more fundamental issue at work for Susan and her team: for all their hard work, they had failed to tailor the overall communications strategy to the key drivers for each client.

That situation ties into an initiative I’ve been working on for the past couple of years to better understand what drives satisfaction with advisors. People I meet at the University of Toronto, where I teach, or in social settings sometimes will ask me questions about markets or the advice they’re getting.

Starting a couple of years ago, I began asking these people to tell me more about their experience with their financial advisors, and I also would ask if the person I am talking to would recommend their advisor if asked by a friend.

I also asked this same question in some one-on-one interviews with affluent investors. These interviews were commissioned by a large financial services institution, which gave me permission to incorporate their answers to that question into my project.

The vast majority of people said that they would indeed recommend their advisor to a friend. Then, I asked them how they would answer if their friend next asked, “What one quality makes your advisor special and would make you recommend him or her?”

Each time I have this conversation, I make notes of the answers and later add the responses to a file on my computer in which I record what people have told me.

Over the past two years, I have made more than 200 entries based on the answers to that question. I have seen four patterns emerge regarding what people say are the key things that set their advisors apart:

1. Communication. The consistency and frequency with which clients hear from their advisors, how well their advisor listens and whether the communication is clear and initiated by the advisor.

2. Inspires confidence and creates peace of mind. The extent to which clients trust their advisors, are confident that they’ll reach their goals and experience no stress or anxiety as a result.

3. Investment performance. Clients’ confidence in their advisor’s expertise and investment process, including the ability to manage risk and the extent to which advisors are proactive in seeking out new opportunities.

4. Relationship and exceeding expectations. Clients’ deep bond with their advisors and the extent to which clients feel that their advisors go above and beyond in educating clients and their family and being a resource on a variety of important financial issues.

– Tailoring communication to key drivers

Last month, I received a followup call from Susan, in which she described how our conversation had set her and her team on a different course with some striking results. Susan began by describing how she and her team had put this idea into motion:

“Step 1 was to create a spreadsheet of our clients, from the ones with the largest assets down, with five columns beside the list. We labelled those columns ‘Communication,’ ‘Confidence,’ ‘Investment performance,’ ‘Relationship’ and ‘Other.’

“Then, we started down the list, identifying what, in our experience, were the key one or two drivers for each client. In a few cases we weren’t entirely sure, but most of the time we reached a conclusion fairly quickly. In most cases, all we had to do was to think about the response from clients to the different things we do, and that gave us the answer on the hot buttons for those clients.

“Next, we talked about how to focus communication with each client in a way that reflects the things that motivate each individual. In some cases, we ramped up personal attention and cut out invitations to client events. For another group, from which the response to social events had been exceptionally good, we increased those invitations. And, for others, we shifted our meeting agendas to spend more time talking about market developments and how client portfolios are being managed as a result.”

What if Susan was uncertain about what motivates a client? She addressed this question for me:

“When I’m unsure, I ask clients or prospects if they’ve ever worked with a lawyer, accountant or other professional who was truly outstanding. If a client says ‘Yes,’ I ask him or her to describe what made that professional stand out. If a client or prospect says the trait was regular, proactive, clear communication, that sends me one signal. If the attribute mentioned is the quality of advice the client got and the specific strategies the professional recommended, that sends me an entirely different message.

“And if I hear about the professionalism and confidence the client felt in the advice he or she received, that tells me something else.”

Susan finished by talking about the results of her team’s targeted communication:

“Now, my team and I start each month by going through that spreadsheet and identifying who’s going to do what in reaching out to clients, keeping those clients’ hot buttons in mind. And we do the same thing for each prospect that we’re in touch with, focusing on the hot buttons that each prospect is looking for in an advisor.

“We still do many of the same things we did in the past, as we believe many clients expect these, although in some cases we have explicit conversations with clients about how often they want to hear from us.

“Based on those conversations, in some instances, we’ve increased the amount of contact; in others, we actually cut back. But the biggest difference has been in what we do regarding client recognition and appreciation. For some clients, we’ve pulled the frequency of contact back; in other cases, we’ve increased it.

“We’ve seen two big changes since we began this process. For prospects, we’ve become much more disciplined in delivering a single-minded message that hits their hot buttons. We have seen an acceleration in new clients and think this strategy is a contributor.

“But the biggest change has been that we’re getting much more positive feedback from clients. By tailoring our message, we’re doing a better job of meeting their needs. They’re happier as a result, and so are we.”

The vast majority of people say they would indeed recommend their advisor to a friend

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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