Nine steps to keeping and growing existing clients.
In our previous column we introduced the "Real Value
Audit" concept to you and outlined the benefits of this process for you
and your clients. We asked the question: "What is the advantage of
delivering high levels of value if your clients ultimately don't
understand or appreciate your value fully?"
The answer was, of course, there IS no advantage.
And so we shared with you our thoughts on how to change your clients'
perceptions of what you do, how you do it and why you do it, i.e.,
several key elements of the Value Ladder. The Real Value Audit is a way
to make sure your clients and you are on the same page regarding the
impact you have had. It goes well beyond the numbers, the figures, the
pie charts, and gets to the fundamental issue of whether you have
addressed their key emotional issues-the challenges, circumstances,
concerns, frustrations, needs, opportunities and problems that keep
them up at night.
To briefly recap: What is a Real Value Audit? It is
a process that you can use for one-on-one meetings, yearly or more
frequently, dedicated solely to candidly discussing how you and your
clients are providing each other with value. A Real Value Audit also is
a "time out" in your relationship. It is a chance to review what may
really be troubling your clients, to make sure that you fully
understand what your client values about your relationship, and that
you articulate the real value you believe you have delivered. We firmly
believe that relationships end-or fail to grow-when the client fails to
appreciate the real value in the relationship.
How Do You Conduct A Real Value Audit?
First, understand that preparing for an audit takes
place all year and here's why: You don't want to enter into a Real
Value Audit with your client "cold," or what we refer to as the
sometimes-fatal mistake of "winging it." Simply having an informal
conversation over the phone or during a brief meeting will not produce
the depth of discussion you need to have with your client. We recommend
that you prepare in much the same manner as you would for a tax audit
(though it will not produce as much anxiety) in that you will keep on
top of the important issues throughout the year.
For example, you need a system in place for keeping
track of additional assets captured, as well as the referrals received
from him or her, and what your success rate is/was in converting them
to clients. Do you know how (and by how much) your client's account
contributed to your gross and net profit? Did you derive an interesting
or creative idea from your client that you were able to pass on to
another?
Here are a few more essential steps to consider for your audit preparation:
Define your metrics for measuring the real value
of a client, both quantitative and qualitative, in a form. Make notes
throughout the year on this form (this will be part of your system).
Your client will be impressed that you monitor such metrics. Clients
need and appreciate those tending their wealth to have a keen eye for
detail.
Be sure to tell your client in advance what you
are proposing to do with the Real Value Audit. No one likes to be put
on the spot. Ask them to prepare about one month in advance for the
meeting and to also make notes and list both benefits and challenges.
If they don't have enough lead time to think about your real value in
advance of the meeting, you run the risk of the client making brash
pronouncements a la "I am receiving less value than I would like," or
"Your value is top-drawer; we don't need to discuss it." Neither
statement is particularly helpful, and the former could be quite
damaging.
Note: It's unrealistic to ask a client to track your
real value to them throughout the year, but certainly you can.
Remember, part of the value to most clients is having the peace of mind
that they do not have to tend their wealth management issues on a daily
basis.
Setting Up The Meeting:
The Top Nine Steps
First, it's important to let your client know that
this is not a meeting during which you will review their portfolio or
to position new investment or financial planning solutions. Rather,
this is a time to assess the real purpose of the
relationship-specifically, to create real value. Here are the top nine
steps to consider:
1. Find a setting that will allow you and your
client to have a frank discussion. You might consider a meeting place
outside of your own office environment, if that's where your meetings
typically take place. Some clients might prefer you to meet them at
their office, their home or a third-party location. The location should
convey that you are creating a "time out" to reflect on value.
2. Meet with all parties involved with the account.
If your account is with a couple invite both individuals, because
having a conversation with one key person will not produce a complete
picture. Similarly, if your relationship is the result of a referral
from a client, consider meeting with the individual who did the
referring. Bill Cates, who is considered a top referral expert in the
industry, has even recommended having initial client meetings at the
office of the person who referred you, i.e. a CPA or estate planning
attorney etc.
3. Dialogue with your client before the meeting. You
might want to call your client and say something like this: "Bob, we've
had what I believe to be a good relationship for a number of years now.
I think it would be appropriate for us to pause at this moment, to look
at why we started the relationship, what our goals have been, and
importantly, what has been the real value you have received."
4. Have a system for capturing the information. Once
the meeting is in progress, will you need flipcharts? Should you record
the discussion to ensure you hear the key points from your client(s)?
Will your assistant be present to make notes and capture key thoughts
or ideas? On the other hand, you and your client may be more
comfortable having a paperless, low-technology discussion. You may want
to respectfully ask your client which method they prefer.
5. During the meeting, refer to Real Value
benchmarks. Ask your client to reflect on, and share with you, the
services she has received throughout the year that rate among the best
in the year's experience. What were the services and what was the real
value that individual received? Did she mention you? If not, you may
wish to have a candid conversation on how your services can better
emulate those that the client cited as the best of the year. Listen
closely. You can learn a lot about what the client truly needs.
Get the point across that you are attempting to
deliver even more value. You might say something like: "We have been
going through introspection to revisit ways to bring more value to
valued clients like yourself. I want to be sure that I am totally
up-to-date on your needs and goals. Revisiting your future thoughts
(vision) about your life, and the integration of your wealth management
challenges are important to cover. My firm has given broader
capabilities to me and I would like to make sure that you are aware of
the additional value that I might provide, and that your future needs
are being attended, whether through my efforts or those of others. You
need be protected."
6. Remember to visit/revisit the key emotional
issues. Our clients tell us that valuable conversations are shared by
simply asking the client: "What is keeping you up at night? What
challenges, circumstances, concerns, frustrations, needs, opportunities
and problems are you feeling?" Then just sit back and listen. Prepare a
sheet of these seven emotional issues to refer to. Whenever you hear
one of these issues, "A challenge we face ...," your body should twitch
like Kramer on Seinfeld. Real value occurs when you address your
client's key emotional issues. If you previously have gone through this
exercise with your client, have his or her prior answers on hand. If
appropriate, consider walking your client through some of the issues
you are currently facing in your practice.
7. Finish on a high note. Be sure to let the client
know you will move forward with renewed confidence and passion as a
result of your Real Value Audit meeting. You may want to consider
asking such questions as: "Are we on the same page with regard to
financial, emotional, lifestyle issues? Are there any other
expectations that I should be sensitive to, i.e. return expectations,
tax sensitivities, charitable opportunities, legacy planning or other
issues that we should discuss in our next meeting? What should we be
saying at this time next year about the real value that you have
received in working with me?"
Now you can request a value commitment. Before you
adjourn your Real Value Audit meeting, discuss the various areas that
you each will be responsible for in the upcoming year. Last, and most
important, express your appreciation and gratitude for their business
and their referrals, and for the opportunity of managing their wealth,
and of having a candid and robust conversation with each other about
value.
8. Review your findings. Try to evaluate the results
of your meeting right away, while they are fresh in your mind. Ask
yourself these questions: "How well are both you and your client
aligned in your thinking? Is there a major gap in the real value
delivered and received? Do you have a "value balance?"
9. Send a Real Value Audit summary to client. As the
last step in the process, you are ready to summarize the key discussion
points in a Real Value Audit report and send it back to the client. The
client will enjoy, a week or so later, revisiting your conversation.
(We all know that very few services do a good job at following up.) By
sending a Real Value Audit report, you are showing how well you
listened. Moreover, you are ensuring that your client appreciates that
the meeting was not simply a relationship management exercise but a
serious, consultative dialogue to confirm that real value is being
exchanged. Consider how few providers truly audit the value they offer.
This is truly Ritz Carlton service that you can provide.
In Closing
Remember, a grave mistake many financial advisors
make is to assume that their clients really understand the real value
being delivered. Another bad assumption that can hurt a relationship is
that the advisor completely understands what it is that the client
values about the relationship. Without fail, clients mention aspects
that they appreciate that the advisor may not even be aware he or she
delivers. The Real Value Audit is "insurance" that your client and you
have aligned vision on the value of the relationship.
Leo Pusateri is president of Pusateri
Consulting and Training LLC in Buffalo, N.Y., and is author of Mirror
Mirror on the Wall Am I the Most Valued of Them All?