"The more I get into the space of wealth management, the more I appreciate the awful challenge that you have," author and organizational consultant Joseph Michelli told advisors at an American Bankers Association wealth management conference in Scottsdale, Ariz.
Michelli went on to explain that delivering excellent financial performance is not enough in today's super-competitive environment. Advisors must learn to engage clients in meaningful relationships, build loyalty and grow referrals.
"Relationship is about loyalty and loyalty is about profitability," he said.
Michelli, who has a Ph.D. in psychology, said he has recently been helping his clients deal with the thorny issue of trust in the financial services industry. He spoke just two days after a scathing New York Times op-ed by a former Goldman Sachs executive that claimed the firm's corporate culture put its own interests above those of its clients.
Michelli told advisors that the op-ed implied that "your interests trump the interests of the people you serve." To help advisors counteract this perception and build client loyalty, he said it's essential to spend time developing real relationships with clients.
Using a model developed by Kevin Roberts, CEO of advertising powerhouse Saatchi & Saatchi, Michelli told the audience that brands fall into four categories: low respect/low love (commoditized brands); low respect/high love (faddish brands); high respect/low love (solid brands); and high respect/high love (beloved brands). To become a beloved brand, advisors must consistently demonstrate integrity, intent, capability and results. In other words, advisors' brands must project that they act in congruity with their values, work for the mutual benefit of their clients and themselves, possess the talent, knowledge, skills and personality to warrant trust and demonstrate superior past and present, and thus likely future, performance.
Beloved brands create "Wow" experiences for their customers, he said. "I'm no longer in the business of just delivering satisfaction, I'm in the business of delivering 'Wow,'" he said.
He describe "Wow' as a "a unique, emotionally engaging experience that goes beyond expectations and is readily recounted." Creating these experiences for clients can help advisors gather more assets, obtain more introductions and rescue high-risk clients.
As an example, Michelli recounted his experience as a guest at the Ritz-Carlton Hotel in San Francisco. In his room, the hotel had placed customized stationary with his name and one of his most recognizable quotes, his preferred brand of lite beer and an assortment of small, rectangular cakes that were decorated to look like the covers of his best-selling books.
The key to creating Wow experiences is knowing where to find information about clients and how to use it, he said. Michelli recommended speaking to clients about what they're most passionate about-their occupations, their families and their leisure activities. He also suggested reviewing clients' Facebook pages and setting up Google alerts on high-value clients and their businesses. That way, advisors can congratulate clients on personal and professional milestones. Taking an interest in the charities that clients support is another way to build client loyalty, he said. Michelli called these strategies "high touch, not high cost."