It’s one of the most common questions I am asked, ‘How do I get more new clients’. All business owners like to see client growth. Unfortunately the answer to that is not as simple as flicking an a light switch. Attracting and winning new advice clients to your business requires time and effort. In this blog I want to spend some time helping you think about what’s required to reach your new advice client goals.
You understand your capacity
Every adviser has a capacity limit. To think you don’t in my opinion is a disaster waiting to happen. Things will eventually fall through the cracks and clients will be disappointed. There’s only so much water that can fill a cup before it runs over. So what is your client capacity? How many clients do you have before things go awry?
There will be business owners reading this thinking well my advisers just need a bigger cup. And I don’t think that position is necessarily wrong. The challenge in this instance becomes what can you do to provide your advisers with more time in their budget to give them more capacity? Greater paraplanning, client service and technology support immediately come to mind. Streamlining processes to make them more efficient is also another idea.
Capacity will also be determined by the types of clients your business services. We know not all clients are the same and some use more time and resources depending on their needs.
So how many clients do you have and what is your capacity? That gap is really important. Why? That’s your new client goal.
You have a value proposition and service deliver process that works every time
The FOFA reforms of 2012 mandated a sharper focus on what financial advice providers do for their clients as well as opting in for continued services. The value proposition and subsequent service delivery ensures your clients get the right kind of advice and service for their needs. It also affects adviser capacity.
There’s always some debate as to let clients know they’re a bronze, silver or gold client, if that’s how you choose to segment your clients and value proposition. My own opinion is not to share such labels with clients.
My rationale for this is two-fold. Client’s needs, regardless of what they are, are important to them. As a client, I want the best advice regardless of how simple or complex my needs are. Additionally, I don’t think financial planning is like flying on a plane. While I know there are different service levels including economy, premium, business and first class, I also know what each of these tickets cost. The same can’t be said for financial planning as pricing is largely invisible until the advice needs are determined. When I fly, I might be happy to fly economy interstate knowing that the ticket price for business class is two, three or four times higher.
Having a structured offer helps the adviser determine how best they can meet the needs of the client. It also helps the adviser talk about how they can meet the client’s goals and provide ongoing services.
You know what kind of clients you’re trying to attract
I’ve previously written about financial planners can learn from the milk industry. There’s lots of different types of milk available – full cream, light, added calcium, some with A2, and some that’s not even made from milk, but almonds or soy. These different types of milk wouldn’t exist if there wasn’t someone out there who was continuing to buy them. They all meet different needs.
So what kinds of clients can you best service in your business. Traditionally I think most advisers were just full cream milk businesses (or white sliced bread). They were businesses for everyone, regardless of who the client was or what their needs were, they could help. In more recent times though we’re starting to see that advice firms are thinking more strategically about their reputation and focus more sharply on the kinds of clients they seek to attract.
Specialisations are a great way to attract the right kinds of clients. These include retirement and Centrelink experts, SMSF experts, budgeting and cashflow experts, business owner experts and of course high net worth advisers. How you position yourself requires some creative thinking. What’s going to resonate with your ideal clients? Why not come up with some ideas and ask the ideal clients you already have to see what they think? Market research doesn’t need to be rocket science!
You understand there is a cost and resource requirement to attract new clients
Attracting and winning new clients to your business costs money and effort. If you’re not prepared to use either of these things then attracting and winning new clients to your business is going to be a disappointing ride.
As a business owner the challenge is to attract the right kinds of clients as cost effectively as you can. The metric to measure this is called the client acquisition cost and it’s determined by the cost of your new business development/promotions divided by the number of new clients you attract. For example if you spend $6000 on a campaign and it attracts 10 clients who pay for your services, the client acquisition cost is $600.
Depending on the type of client you’re seeking to attract and the kind of value proposition you offer the client acquisition cost should be considered in your advice and service pricing. Different business development efforts will deliver different outcomes of course. Referrals are typically seen as a cheaper source of new clients while events traditionally have been seen to be more expensive. I’ve always believed in a diversified approach to new business development; don’t put all your eggs in one basket. It also helps average out the costs too as some efforts will be more expensive than others.
So let’s do a quick re-cap
Do you have the right mind set to attract and win new clients?
• Understand your capacity and new client goal
• Have a value proposition and service delivery process that works
• Know what kind of clients you’re seeking to attract, and
• Understand there is a cost and resource requirement?
I hope this article helps get you in the right headspace and remember Rome wasn’t built in a day. If you need marketing support on any of these matters or help to create a business development or marketing plan, let’s talk to see how we might assist.