Business Skills for Professional Advisers
1 Business Skills
In his Annual Report, Neville Eisenberg Chair of the Managing Partners Global Group mentioned four key indicators for the Managing Partners of his Group.
Business Skills
Innovation
Productivity, and
Levelling Up
Over the next few weeks, I will address each indicator from a Client Mapping perspective.
This week, I want to talk about Business Skills.
Client Mapping is the award-winning methodology I devised based on solid psychological research, which can be used strategically to win good-quality business. Still, it can also increase cash flow, improve client retention, encourage loyalty, repeat business and client referrals.
Although it may seem ridiculous to a bystander, most professional advisers focus on their professional skills, whether accounting, investment management or the law and their professional network, rather than their clients.
Research into accounting firms in Australia some years ago found that most accountants viewed their clients as a ‘necessary nuisance’.
Given that all professionals will have a copy of their clients' passports for their anti-money laundering obligations, how many professional advisers send their clients a birthday greeting card when their passport clearly shows their birthdate?
In one firm I worked in, it had an up-to-date list of all professional connections, but not an updated list of its clients!
When asked, most professionals confess to having their bills paid late when paid at the client's discretion, and in some cases, an average of 200 ‘lock up’ days. These professionals accept this situation as normal and do not ask their clients for feedback about their service. I surveyed clients as to why they paid late, and in most cases, the clients did not know what the professionals had done for them.
I also asked these clients whether they had sufficient feedback during the service; 100% said they were not satisfied with the feedback given, and if it was given regularly, they did not understand what had been sent. The clients also said they would be prepared to pay more for the time professionals spent on feedback. I shared this research with a group of professional advisers and followed up three months later. Not one professional adviser had increased the feedback or style of communication with their clients!
I took one client to a lawyer for a service I was not able to provide, I sat with the client as the lawyer took him through the service he was to provide for him. When asked what the client had understood from the meeting, my client said he had not understood a word of what he had been told.
Most professionals believe that their service is a ‘distressed’ sale, meaning the client needs it but does not like paying for it. However, this is primarily because it is not communicated to the client as a benefit, only a fact with negative outcomes if not followed.
Professional advisers need to know the fundamental difference between facts and benefits. Facts engage the ‘left brain’ and alert the client to be rational, which usually results in a negative outcome; however, benefits engage the right brain, which generally results in a positive outcome or a ‘no-brainer’.
We may think that decisions are made using the left brain, but research reveals this is not true.
A fact is ‘we have offices in 25 countries’, a benefit is ‘we manage your money so you can sleep at night’.
Another interesting aspect is that fear is not a motivator. Research was done into taking a tetanus jab on a university campus, splitting the students into groups who received different levels of information about the dangers of not taking a tetanus vaccine. The level of fear in the message did not affect the students' vaccine uptake.
However, familiarity and peer pressure did prove to be great motivators. When the students knew that the vaccine was being administered in the university medical centre, the vaccine uptake increased. The uptake increased dramatically when told that 80% of the teaching staff had taken the vaccine.
When preparing a letter of engagement or a covering letter to a client, how often do you mention the benefit of the service to the client? For example, my area of expertise is death and taxes. It would be easy to say, ‘everyone will die one day - be prepared,’ but this is factual and negative, so it will not motivate the client to realise the benefit of writing a Will. However, a more inspirational message would be ‘make sure your loved ones remember you fondly by keeping your financial affairs in order’.
It is also essential to know the difference between facts and education. Education is what the client wants to know more about. Facts are what you want to tell them.
For example, a fact could be adjusting your investment portfolio to take into account your ‘risk tolerance’, whereas education could be the ‘Five things you need to know before a liquidity event’.
If you cannot immediately think of a benefit about your service, then brainstorm it with colleagues. You can then test the outcomes of your brainstorm by asking your clients for feedback and what benefits your service gave them. Negative client feedback should be addressed and the positive feedback carefully noted and used in future client engagements.
The added advantage of positive feedback is in ‘social proofing’. People make decisions in times of uncertainty, such as the choice between two equally qualified professionals on social proofing. They will choose the professional with the most ‘social proofing’. When a menu indicated the ‘chef’s favourite’, the increased take-up of the dish was minimal. However, if the menu stated that a dish was the ‘customers’ favourite’, the uptake shot up by 30%. Other examples of social proofing for professional advisers are awards and speaking engagements.
All social proofing by independent neutral parties should be prominently displayed on email signatures, LinkedIn profiles, podcast recordings, office receptions, articles, etc.
Professional advisers who pay attention to the concerns and behaviours of their clients will earn their respect, bills will be paid on time, they will provide repeat business, and are likely to pay more for the services you provide when they know what the benefits are to them.
Remember, it is not often about the cost of the service but how the service makes them feel. Stella Artois increased sales dramatically with the slogan ‘Reassuringly expensive!’