Less is more (Part 2 of 2): Making right sizing work for you

(September 2005)In part one, I made the case for right sizing your practice and outlined the Triple A approach to determining which your clients are really your ideal clients. To read Part 1, please click here.

Let prospective clients convince you there is a good fit

Once an advisor has created an ideal client profile, he or she must stick to it. When meeting with prospective clients, we suggest that advisors use the Triple A approach as an actual talking point in their initial meetings. List it on your meeting agenda and explain why it makes you unique. Here is a sample script:

"I’ve made the commitment to be a specialist rather than a generalist and as a result I am very selective about the clients I work with. Unlike some advisors who are trying to build a big business and attempt to be all things to all people, I prefer to be all things to some people. I know my capacity and if I go beyond that level, it will dilute the service I provide and I can’t allow that to happen. While some advisors are concerned about making a sale, I’m concerned with fit based on the lifetime of the relationship. It is for that reason I have an ideal client profile and I stick to it ardently."

At that point, write out the three A’s and explain each one. You will find prospective clients will try to convince you that they meet your profile rather than you having to convince them that they should do business with you.

With existing clients, I suggest that you decide who among them meets your profile or at least has the ability to over a reasonable period of time. Once you’ve established that list work hard to competitor proof and convert them to advocate status.

The moment of truth

For those who don’t meet your profile, you have an important choice to make. This is where many advisors make a serious error in judgment. Some advisors simply can’t bring themselves to let go. They say things like, "some of these people have been with me since day one," or "some of these people are like family to me" or "I can’t just give this revenue away." The bottom line is this, you live by the rules you set. You can make exceptions but be practical and try to step beyond emotion and sentiment.

You’re not firing them, you’re disassociating respectfully

The next step in the right sizing process is to call or write to the clients that do not meet your profile. When speaking to each client, it is essential that you take the high road in every instance. Many advisors make the mistake of saying they need to "fire some clients." If you have too many clients, you’re doing them a disservice by keeping them. For the clients with whom you have poor chemistry or for those that have a high hassle factor, be a pro and bow out gracefully.

"Up until recently I’ve been trying to be all things to all people and over time have found myself becoming a generalist. As a result we’ve been bursting at the seams and in the process I’ve started to see things fall through the cracks. Going forward, I’ve decided to become a specialist who strives to be all things to some people. I know my capacity and in order to elevate my level of service I have to make some changes to my practice. Part of that includes using an ideal client profile to determine the type of client which is the best fit for my team and I (At this point outline the Triple A approach).

"Based on this profile and our history together, I feel that going forward there probably isn’t a good fit. However, I have identified an advisor who I feel would be a better fit for you."

(For a downloadable template letter that delivers the same message please click here.)

You’ll be amazed at what this will reveal. Either the client will agree and move on effortlessly or they will become defensive and ultimately fight to stay on board with you. They’ll say things like:

"It never occurred to me that I should empower you fully. I can move everything to you," or "I didn’t know you were accepting new clients but I can start referring people to you."

You can decide to conditionally keep the client on board and give them the benefit of the doubt if they respect the rules of engagement. Many will elevate from customer to client and then to advocate status simply because you conveyed it to them with clarity.

However, when your instincts tell you that the client is not really going to respond, be a broken record as you respond repeatedly to their attempts to convince you otherwise:

Advisor: "I just don’t think there is a good fit going forward." Client: "But I can change, I didn’t mean to be a pain to your people." Advisor: "I just don’t think there is a good fit, but I’ll introduce you to the other advisor." Client: "But I don’t want to work with anyone else." Advisor: "I appreciate that but based on the direction I’m taking my practice I just don’t think there is a good fit here."

It may be difficult to break these ties initially, but your practice will be better for it in the long run.

Duncan MacPherson is co-founder of Pareto Systems, an industry leading practice management and business development consulting firm. Duncan has played an integral role in the development of the Pareto Platform, a turn-key web-based CRM (Client Relationship Manager) designed to help financial advisors create and stick with a customized professional code-of-conduct. Duncan is also one of the most respected speakers in the financial services industry and over the last 10 years, he has presented keynote addresses to tens of thousands of financial advisors throughout North America. Duncan wrote the best-selling book The Promise of the Future: A Financial Advisor’s Guide to Effective Marketing and he often contributes articles and commentary to industry publications.

(09/15/05)