Did you know that acquiring a new customer is five times as expensive as retaining an existing customer? How about that increasing customer retention by 5% increases revenue 25-95%? With those statistics, it's surprising that 44% of companies have a greater focus on customer acquisition vs 18% that focus on retention.
Competition is stiff in our industry, everyone is competing for the same dollars. Think about how fickle we are, people will drive 10 miles to save an extra penny on gas, go to the next town to Costco to save $2 on roasted chicken......amazing roasted chicken (I'll own up to that one). Why wouldn't they do the same with financial advisors? What can you do to build loyalty so existing clients don't jump on the next robo fad or go to Joe Schmo down the road who will manage their money for .25% less?
This is why building relationships is so critical. Here are 8 ways to build solid relationships and client loyalty.
1. Listen More, Talk Less....Know Your Client
People looooooooove to talk about themselves. Your client has a story, know it well, by letting them tell it. Asking questions and sitting back to listen is therapeutic. Whether it's an hour long meeting with someone retiring or a quick 10-minute phone call with a CEO, learn to get to know them well. In addition to understanding why they came to see you and what they're looking to accomplish, ask about them personally. Simple things like: What got you into your line of work? How did you get to where you are today? Why did you choose that company? What do next steps look like for you? What were some of the struggles along the way? What would you do differently? Why? Why? Why? Their personality comes through and you're winning.
2. .........and Let them Know You
Clients want to know you're human, they may not want to hear about your kid's soccer game but they do want to relate to you. Be a story-teller, I can't stress that enough. Some of the best relationships I built with clients were with people that knew the struggles I was dealing with potty training kids. For others it was simple things relating to career progression, staying motivated, getting to the gym, family issues. Tell your stories. Why are you an advisor? Why did you choose this company? What would YOU do different? People don't always remember everything you tell them, but they will remember how you make them feel.
3. Build Trust & Communicate
Relationships almost always fail without trust, and the best way to build trust is communicating. Communication is EVERYTHING and everyone has a different communication style. Being able to read clients quickly and adapt to their communication style will not only score you points with them, it will allow you to be more efficient. Mirror their voice tone and body language, ask things like "So if I'm understanding correctly, what you're saying is...," use the power of silence, be positive. All great ways to effectively communicate.
4. Get to Know the People Around Them
One of the biggest things that worked for me with clients was getting to know the people around them well. Spouse, kids, aunts, uncles, co-workers, the neighbor that gives them back stock advice. Anyone that is important to them and they respect, give them a call or have them come in. The more people you can get in front of the better. It's good for both business and relationship development. I'll never forget the first time I had a client pass away. It was sad and I really felt for her family. We were close and I had developed a great rapport with her oldest daughter who was the trustee on her accounts. I was able to not only continue that relationship but her daughter ended up transferring her accounts over as well. There's an incredible wealth transfer that is taking place and if their kids or family know you are someone they can trust, odds are those assets will stay in place or at least have a better shot of staying there.
5. Be the Expert They Need
Not everyone needs a QTIP trust or tax-efficient S&P 500 SMA. They may just want to know if they should contribute a Roth this year. No concern is too small, know your stuff. Be the expert.
6. Ask for Feedback.......and Listen to it.
Imagine if everyone asked for feedback and would take it to heart. The doctor, barber, your real estate agent, spouse. Without getting into the whole 'does this make me look fat' thing, I'll jump into the client side. Honest, candid feedback is a critical tool to improve relationships with your clients, but only if you listen to it and implement it. If they know they can talk to you openly and honestly about things both good and bad This was something I always brought up quickly. "Your trust is very important to me and I want to make sure I'm living up to your expectations. I want to ask you for candid feedback to make sure I'm doing that, and please be honest. Sound good?"
7. Always Be Reliable
Answer your phone, call people back. I won multiple relationships simply because they knew I would call them back. Most people are reasonable, they know you can't ALWAYS answer the phone. But don't keep them waiting days either. Delegate where possible, but make sure their concerns get resolved or it could end up being a black mark on the relationship. 'Remember that one time you didn't call me back?' Nope. Because it never happened.
8. Know Your Value Prop and Deliver it Effectively to Your Clients
What makes you different than other advisors? What value do you provide? Why should I pay you the fees you're asking for? Personally, I always felt an effective value prop was among my biggest assets as an advisor. I would tailor it to my client or prospect as well, this allows you to let them hear why you're a good fit for them specifically, assuming you are. Coming up with a solid value proposition is paramount to connecting with your clients. More importantly, delivering on your value prop will make it 1000x easier to send their friends and colleagues to you.
9. Keep.It.Simple
Nothing turns people off more than talking over them. Speak in terms a 6-year old would understand. This is something we can all appreciate, I'm sure we've all been there. I had an experience awhile back going to see a doctor about a bad knee I've had for years and honestly I didn't understand a single word he said. I was nervous to begin with because he looked at least 10 years younger than me and I'm not even that old. Finally I told him 'Listen Doc I appreciate the info but you're going to have to dumb it down a shade, I'm not at your level.' He smiled and explained it to me in a way I finally understood. He took the feedback, implemented it, and now every time I see him he talks to me in normal-people-speak. I'll never go anywhere else.
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