Practice Management: The Loyalty Equation
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The chicken or egg – which came first?
That old saw (paraphrased, of course) applies equally well to investment
management consultants. Which comes first? The clients or the practice?
Your immediate reflex may be to say . . . the clients. And of course, if you
don’t have clients, you don’t have a practice. But without a well-run practice,
you may find yourself scrambling to keep clients or replace those you’ve lost
with new ones. Then again, if you are committed to “best practices” in how you
run your business, clients must come first. The clients and the practice are
The right strategies will inspire loyalty in your clients. Loyalty as a
client retention practice cannot succeed unless you manage your practice to
accomplish it day to day, month to month, year to year.
Build a business model that supports your clients’ needs. When
you make a commitment to building an advisory business, it means you have
decided to focus less on the daily management of investment decisions and more
on the relationships you have with your clients. That means your workday should
Answer these three questions:
- Are you spending hours on the phone talking to clients about their
- Do you have 300+ client relationships?
- Were you surprised to learn that your biggest client’s mother needs
If you answered yes to these questions, then your business model is probably
A loyal person is someone who is “unswerving in allegiance,” and to win and
hold somebody’s unswerving allegiance, you need to deliver advice and service to
a client, the way that client wants it delivered.
Here are some ideas on how you can manage your practice to inspire loyalty in
your best clients.
- Less is more. When you have fewer households in your client base,
you can concentrate on your best clients, devoting the time and attention to
them that they deserve – and probably expect. Determine how many clients you
can support the way you want. Calculate the assets a client must have for you
to give them the right level of attention without worrying if you’re making a
- Allocate time. It takes years to really get to know a client. Your
first meeting is a great “get-to-know-you” session, and it does help you lay
the proper foundation for a strong relationship, but the longer you know
clients, the better you understand them. Over time, you can learn what’s
really important to them and what they need from you. Block out time to
concentrate on the clients you want to keep and replicate. Schedule it on your
calendar and keep those “appointments.” And if you are distracted by the
hustle and bustle of your office, work elsewhere – at home, for example.
- Develop empathy. Time in a relationship is important. However,
making an emotional connection may be even more crucial. Like everyone else,
your clients think about you with their right brain as well as with their
left. The left side of their brain deals the facts and figures. It wants to
know what you are doing with their money and why. The right side of their
brain has to do with their emotions, and the emotional component is critical.
That’s why successful advisors work hard to turn their best clients into
friends. That database you have is valuable, but leverage it. Don’t just send
a birthday card to your top clients. Give ’em a call. Take them out to lunch.
Drop by to say hello.
- Keep your promises. Do whatever you have to do to keep your
commitments. After all, we expect our friends to keep their promises –
especially friends who are taking care of our money. So create principles and
standards by which you and your team will work. Write them down. Share them
with your clients. Make sure your team participates in their development and
understands the importance of adhering to them.
- Cater to your clients. The key word here is “cater.” Lip service is
often given to the principle of being attentive to client needs. The word
“cater” accurately describes the way you should operate your business. It goes
beyond the idea of attentiveness into the realm of outstanding, single-minded
service. Give your clients what they want from you. Some, for example, want
bimonthly calls about their investment progress; others only want to hear from
you once a quarter.
- Stay one step ahead. “How extraordinary,” your clients might say if
you knew what they needed before they did. It’s not so hard – as long as you
are as loyal to your clients as you want them to be to you. Think about the
challenges your clients are facing. Not just the investment challenges but
also those related to who they are as individuals, their stage of life, the
businesses they’re in, and the families they have. You and your team should
always be looking for ways in which to help them in every area of their lives.
Do this for a while and it will become second nature, as natural to how you
run your business as anything else you do.
- Show up. In the end, you need to “be there.” Loyal clients can
sustain dips in the value of their portfolio, but they have to see that you
are part of their lives and that is more than being just a phone call away.
Structure your routine so that you can meet with your best clients on their
own turf. Socialize with them and get to know their families. Pay visits to
their homes, and make a point of being there for the important occasions in
their lives – the good times and the bad.
Copyright © 2007 Rose Communications, Inc.
About the Author
Eve B. Rose, ABC, CIMA® is a writer and editor with
more than 25 years of experience in marketing and organizational communications.
In addition to marketing brochures and other collateral, she writes white
papers, shareholder report commentaries, newsletter and magazine articles, and
management communications – among other things. To learn more about Eve and her
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Article Published/Sorted/Amended on Scopulus 2007-12-01 01:35:51 in Business Articles