This case study is based on the situation of a client of the Covenant Group. Names and details have been changed to preserve privacy.



“How do you know?” I asked. Roberta Quentin had just told me that a key part of her value proposition was the high level of service she provided — something that she was confident her clients very much appreciated.

We had talked about how a promise of good service is no longer a differentiator in the marketplace. People have come to expect good service and, in fact, it is only when their expectations are not met that they begin to form opinions about service. So, when Roberta suggested that her clients were very satisfied with the service level she provided, I had to ask how she knew that was the case.

“I know because they tell me so,” Roberta responded. “And a couple of years ago, I sent everyone a formal survey; the comments were, overall, very positive.”

“Good for you, “I offered. “Client satisfaction surveys are a key tool used by top advisors to keep their fingers on the pulse of their businesses. Perhaps it is time for another one. But before we talk about that, tell me some more about what your clients actually say to you with respect to the level of service they are getting.”

“Well, they don’t come right out all the time and say, ‘Wow, what great service!’ — although that does happen occasionally,” Roberta answered. “It’s more of a general sense that they are happy. I don’t lose very many clients, so they must be satisfied.”

“Let me feed some of your own words back to you,” I said. “Do you want your clients to feel ‘wowed’ by your service or ‘satisfied’?”

“Wowed would be better, of course,” Roberta replied. “But what exactly does that mean?”

“That’s precisely my question,” I said. “In my experience, people are ‘wowed’ when their expectations are substantially exceeded. So, what expectations do your clients have around the level of service they can expect from you?”

“Well, they expect us to be available, responsive, accurate, professional…”

“All good words,” I interrupted, “but what do they mean to me as a client? When you say something like ‘available,’ how do you define ‘being available’? Is it 24/7, nine to five, Monday through Friday? Or something else? How responsive are you: immediately; within an hour, a day, a week? How do I determine whether or not you are ‘accurate’ and what are the ‘professional’ standards by which you operate?

“I am not suggesting in any way that you don’t deliver on all these things,” I continued. “But if you want to exceed people’s expectations, shouldn’t they have a good idea of what those expectations should be?”

“Yes, I guess they should,” Roberta conceded. “I haven’t thought about defining my service that specifically, but I can see the advantage. How do other advisors with whom you have worked approach this?”

“Through a service-level agreement,” I answered. “They determine what they feel is an appropriate level of service to provide to their clients. Then they articulate that standard and communicate it, often in written form, to their clients.”

Covenant Group’s advice to these clients, I told Roberta, is to use the same client segmentation they use for marketing — A, B, C, D, etc., or however they segment their client base — and craft a service standard for each segment. Higher-value clients receive higher-intensity service; less active clients still receive good service, but delivered with less intensity and, most often, with less personal involvement on the part of the advisor.

I described, as an example, an advi-sor, Jim, with whom I work. He tells his top clients what to expect by saying something like this:

“As one of my top clients, I want you to know how much I value our relationship and how important it is to me to ensure that we meet your expectations with the level of support and service we provide to you. So, here is our promise.

“My cellphone is always on, even outside normal business hours. So, if you have an urgent matter and can’t contact me at the office, feel free to call my cellphone. The number is on my business card.

“My team knows that you are one of our best clients and, as such, will endeavour to respond to any service or information request you have immediately. In the event my team is unable to handle your need on the spot, they are committed to a same-day or next-morning turnaround.

@page_break@“In our role as your investment advisors, we are constantly alert for anything that might have an impact on your portfolio or strategy. When the market surprises us, as it inevitably will from time to time, or some other relevant event occurs, we will contact you to discuss its implications for you and to suggest any action that may be required.

“On a more general basis, you will receive our weekly market update e-mail, as well as your monthly statements. Whenever we receive a commentary from one of our investment managers or analysts, we will forward a copy to you.

“Throughout the year, we hold a number of client events — some social and some educational. You will receive invitations to them all and we hope you attend as many as you can.

“Feel free, by the way, to invite your spouse or anyone else whom you feel might be interested in what we have going on.

“Most important, you and I will meet face to face at least twice per year for a formal review of our work together. Even though we will likely be in contact more frequently, approximately every six months, we will sit down for an hour or so to ensure we are both working with the same set of assumptions and to assess our progress toward your long-term goals.

“That is our commitment to you. Is there anything else that you would expect from us?

“If not, then I ask that, in return, you make a commitment to us — to keep us informed of any changes in your personal situation, plans or preferences, and to participate actively in our relationship. Does that make sense to you?” Jim then concludes.

“Wow,” Roberta reacted, “that is impressive. It certainly sets the standard and expectations. Obviously, he doesn’t make that commitment to all clients — only the top ones, right?”

“That’s correct,” I answered. “But he has a similar talk for each client segment. The ‘offer,’ so to speak, is different for each according to the service level Jim has decided he wants to provide. The key is that when he describes it, each client believes he or she is getting A-level service.”

I also pointed out that Jim had integrated some marketing into his service plan. First, he sets himself up to obtain personal introductions from his top clients to people like themselves by encouraging them to invite friends or family to his client events. Then, when the invitations go out, he formalizes that process even further.

Second, he arranges for semi-annual face-to-face reviews, which means he has created the opportunity to speak to his best clients twice a year about how they can help him build his business. That is bound to lead to new high-value clients.

“I like it, “ Roberta said excitedly. “How do you recommend I get started?”

“Why not begin with the client survey you mentioned earlier?” I suggested. “It’s been at least two years since you did one. Why not craft the questions in a way that gets at what your clients want from you?”

I suggested the questions to clients cover the following topics:

> What is your preference with respect to contact — e-mail, regular mail, telephone, in person, Web-based seminars, etc.?

> What information do you want to receive and how often?

> What do you consider to be a reasonable response time for a service request?

> How do you currently rate me (as your advisor) on the service that I provide?

> What additional services or products would you like to know more about?

“You’ll learn enough to be able to decide appropriate levels of service for each client segment,” I said, “and how to match your resources with their expectations.

“And here is a final tip: at the end of your survey, ask two additional questions. The first: ‘If someone was to ask for a reference, would you be willing to provide one?’ The second: ‘If someone were to ask you to recommend a financial advisor, would you be willing to introduce me?’

“These questions serve two purposes,” I said. “They tell you right away what your clients think of you, and they are a great lead-in for seeking introductions and referrals the next time you sit down with the client.”

“Excellent!” Roberta said, “I can’t wait to get started.” IE