Growth strategy: Attract your natural market

(May 2008) The most common question I get from financial advisors is “how should I grow my business?”

This is a vital consideration since businesses that aren’t growing are likely losing ground. Future growth is a challenge because many of the traditional techniques advisors know about are less effective today.

Before we determine the best use of your marketing money and effort, it pays to examine the current mindset of your prospective clients. What do they want? What do they need? The answers to these questions are essential. The key to effective marketing is understanding your prospects’ stressors. You can’t remove this stress unless you first understand it.

Surveys I have conducted over the past two years show a number of wants or desires clients have in common.

Expertise: Clients want to feel that you, their advisor, can provide the expertise needed to meet their current and evolving circumstances.

Personal touch: Many clients today feel as though they are only one among many. You probably know the feeling yourself. They don’t expect to feel as though they are your only client, but to attract clients over other advisors, you need to proactively maintain a standard of personal contact.

Understanding: Clients want to be listened to and understood. They want the opportunity to speak and ask questions. Clients often complain that their advisors were born with two mouths and no ears.

Language: Language can alienate clients. It is essential that you speak to them in a language they understand.

Objectivity: Advisors often confuse objectivity and independence. Clients want a sense that your recommendations are based on what is best for them.

Based on this, a number of client needs can be derived from their list of stated desires:

Predictability: Comfort comes with consistency and familiarity. To foster trust, your clients need your service to be reliable and predictable.

Coordination: They want you to be an expert, but clients don’t expect you to be an expert in all disciplines. They need a financial advisor who simplifies their overall plan but who augments their expertise with the expertise of other professionals. In fact they prefer if their advisor is not a “jack of all trades.”

Intellectual framework: I have never heard a client say, “I love it when my advisor continually changes his mind.” They don’t always say it, but there is no question they want to know how and why you do what you do.

Discipline: Clients need you to manage their money with discipline. It is quite common that clients want you to change your mind (especially in volatile markets), but inherently they know the relationship should be managed with a governing philosophy.

Upon examination of these determined client needs and wants, what approach do you feel is best for the future of your business? Should you work on your internal processes with like-minded prospects or market externally for strangers?

Unless you haven’t built critical mass — a sufficient base of clients and assets — the answer seems obvious. Why spend money and effort on strangers when you can expedite success by leveraging the goodwill you have already established with existing clients?

The days of target marketing for financial advisors are over. Advisors should identify the common characteristics of their best clients. Think of this as your natural market, and use these characteristics to create a client profile. Your success stories include clues that should help with this.

When I was a practising advisor, my natural market seemed to be “broken wing” clients. This group included widows, widowers, accident victims, divorcees and shocked retirement package recipients. I can’t really explain why, but I suspect that in some way, I provided more than just financial advice. Is it any wonder that my extravagant marketing campaign for dentists fell flat on its face?

The future growth of your business depends on your ability to identify your natural market and become a relationship marketer.

Where should you start?

Start by throwing away the idea that any prospect with lots of money can be a great client. If you’ve been in this industry for a while, you will almost certainly agree.

Second, review your client list by name only. Don’t run off the traditional client list by assets. Highlight the names of clients that resonate — those you enjoy working with. These should be the clients who “get it.”

Once this task is complete, boil the list of highlighted names down to 20 or 30 of your favourite households. In each case, ask yourself why each name resonates with you. I suspect that these answers will not come easily.

The best way to get these answers is to ask. There are two approaches: you can talk directly to each client (face to face), or you can get them all together as a group. If you decide on the group format, consider using a facilitator.

Here are some key points to discuss:

• You have identified them as top clients, based purely on the quality of your relationships with them.

• You are in a planning phase to determine the future of your business. You thought you should consult your most valuable clients for feedback.

• Discuss the needs and wants described in this column; ask if they can suggest any additions to this list and get their feedback about your ability to meet these needs.

• Explain that you want to grow your business but that you don’t want to become like the country doctor who has 1,000 families and a six-month waiting list.

• Tell them you want to spend more time with them and with new clients like them. Show them your ideal client profile, explaining your preference for doing business with like-minded people — you do not want to do business with everyone.

• Ask for their input: “If you were me, what strategies would you use to find more people like you?”

• Listen to their answers.

They will surprise you with some great ideas. Many will include ways to introduce you to their friends and family members. It is important to stress that you want to work only with those who value advice.

Your best clients are so because you have built trust and maintained it over time by addressing their needs. At the same time, keep in mind that these clients have another need — you! If you are too successful, they could fear you will no longer be able to meet their needs. Selfishly, they want you to be successful but not at the expense of their relationship with you.

The law of reciprocity, though, suggests that if you help someone, they in turn want to help you. Practise this law. Making it part of your strategy is an effective, efficient and fun way to make advocates of your best clients.

Shawn O’Brien is vice-president, Atlantic Canada, at Connor Clark and Lunn. For more information, contact Shawn at sobrien@cclgroup.com.