The ONE Thing That Could Lose More Than 50% of Your Clients
For just about any practitioner to lose 56% of their clients in a year would be a disaster. It is enough to jeopardise a practice entirely of course, but even in a best case scenario it will hurt horribly, and for quite a long time.
It is a very real possibility too, especially if you are dealing at the top end of the market, because there is one area where they have a rapidly shifting expectation. The high net worth or affluent who are most discerning and who have the most options are ready to walk away if expectations are not met, and their expectations in digital engagement are very high.
The 56% I am referring to is the result of some research done by Capgemini and summarised in their World Wealth Report 2016. While the report is itself a wealth of useful information for practitioners there were 2 numbers which kept standing out: 56%, and 100%.
The first (56%) was the proportion of clients who say they will leave their wealth management adviser/firm if they become digitally dissatisfied.
The second is a more alarming number: 100% of those who say they will leave do actually leave.
For those practitioners who may be reading thus far and who are not in the wealth management space…hang in there, because I believe this applies to your clients just as much as any financial planners’. The thing we should remember about the High Net Worth clients who are far more likely to engage a holistic planner on a pure fee basis is that they are the “early adopters”. They are the leading edge that the rest of consumer-land seeks to emulate and follow. More often than not what we see the affluent clients do becomes the very behaviour that most other clients who are not quite so well off end up doing in time too.
So we should be worried, regardless of our advice discipline or current business model about ensuring that our clients do not become "digitally dissatisfied".
What is “digitally dissatisfied” though? It is the client-driven demand for technology to add speed and convenience to their professional relationships. It is more than a nice facebook page. It is state of the art (fast!) equipment and software that enables them to access information, you, your firm and anything else which is part of the service package. Fast, convenient, able to be accessed from multiple portable devices on their part….and secure.
Fail to deliver in any of these areas and those high end consumers today become “digitally dissatisfied”. And 56% of them said if that happened they would leave their advisory firm. 100% of those who said they would, have done so.
This can happen to any practitioner too in the next couple of years, even if wealth management services to the High Net Worth are not the target market. Think of this segment of the consumers who seek professional advice as a “leading indicator” of future consumer preferences. They will be followed by others who don’t have the same wealth, but who do have the same lifestyle, net worth and service expectations.
These people expect professional practices to be connected and savvy users of technology. That means things move at light speed, and our service or advice is constantly accessible via whatever equipment and whatever platform is leading edge.
Be warned: Digital Dissatisfaction on the part of your target market or existing clients could be disastrous.
Why Lasting Change Is Hard
Before we had any children, my wife and I lived in the heart of Dallas. One day, on our way back to our house, we were driving down Skillman Avenue when we were caught in a sudden torrential downpour.
The rain was coming down incredibly hard, which wouldn’t have been a problem if the storm drains were equipped to handle that much water. Instead, the road itself filled with water faster than we could have anticipated. Quickly, the water rose up the side of our car. Trying not to panic, we realized that we could not continue and would need to turn around and get to higher ground.
Water rising up the side of your car door is the kind of roadblock you might not expect to encounter, but when you do, it’s formidable. We couldn’t drive through it or even around it. We had to deal with it quickly or face serious consequences.
When we’re trying to implement change in our own lives, it’s important to identify and plan for common roadblocks to lasting change.
The first and, in my opinion, most important roadblock to lasting change is not addressing the real issue.
Let’s say you wake up in the middle of the night with a sore throat. You’re annoyed by feeling sick but your throat really hurts, so you get up and spray a little Chloraseptic in your mouth and drift off to sleep. When you wake up the next day, you still have a sore throat, so you pop in a cough drop and go about your day.
The change you’re making – using a numbing agent – might work if you’ve only got a cold, but if it’s strep throat, you’re not addressing the real problem. Only an antibiotic will cure what ails you, even if Chloraseptic will keep the pain at bay for a while.
Just like how more information is needed to diagnose your sore throat than one feeling, problems you encounter in your life or business require diagnostics, too. Figuring out the real problem – not just your most apparent needs – requires some introspection and a little bit of time.
Here are eight questions to ask when you need to discover the root cause, courtesy of MindTools.com:
- What do you see happening?
- What are the specific symptoms?
- What proof do you have that the problem exists?
- How long has the problem existed?
- What is the impact of the problem?
- What sequence of events leads to the problem?
- What conditions allow the problem to occur?
- What other problems surround the occurrence of the central problem?
Once you have your answers to these key questions, you can’t stop there. Your vantage point is skewed from your own perspective. You’re going to want to ask someone else to evaluate the problem at hand with the same questions and then compare your answers.
If you and all of the partners at your firm have similar answers, you’ll know you’re on the right track. If you wind up with wildly different ideas, I suggest seeking the advice of someone outside your organization. Fresh eyes can make all the difference in understanding a problem.
I often talk about being ‘too close’ to understand. You’ve probably heard the illustration about a group of people standing by an elephant with blindfolds on, trying to describe what they’re experiencing. Depending on what part of the elephant you’re next to, you’re going to have different observations.
But someone outside of that elephant’s cage can clearly identify the elephant.
The first key to making a lasting change is to make sure you’ve addressed the real problem and are looking for authentic change.
Next time, we’ll address the second major roadblock to creating last change.
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