Maybe not.
Don't Rush to Go "the Extra Mile" in Client Service, Just Yet...
While I would be the first to say that an area of opportunity for professional services firms to excel in comparison to their competitors is in “providing service”…the answer to getting to more clients on the “satisfied” side of the customer-experience (or service) line is not necessarily by putting more effort or resources into delivering more WOW factor to them.To explain what I mean by this we need to step back and think about what this whole “service” thing is about. As a profession we have our own interpretation of what “service” means, often dictated by policymakers, regulators and institutions. How we use the word inside the business and what we mean by it is quite often very different to the expectations of the fee-paying-customer.To the average customer the service concept is simple: “service” means that in return for consideration (or payment) they will receive benefits, or assistance, in a particular area. They pay you and you do something for them in return.To professional services firms, it often means something different. It is more often than not thought of as as the process or methods we use in simply delivering technical expertise, or perhaps how we maintain ongoing communications with customers who have transacted with our firm in the past.There is potentially a fairly large disconnect here. A customer might (quite rightly) perceive that your firms ongoing service will consist of support and assistance which is proactive in nature and focused on delivering ongoing assistance & advice, or value. To the advisory firm it is often simply about making sure the job was done correctly and then staying in touch until more of the job needs doing. That is, for the advisory firm – influenced more by regulatory requirements perhaps than customer expectations – “service” is interpreted as a process of providing evidential documentation and a regular stream of messages urging clients to be proactive in identifying if their circumstances have changed.That difference in interpretation and expectations goes a long way towards explaining why professionals feel that they are providing excellent service, yet the clients rate it as something substantially less than “excellent”.Looking beyond the varying expectations of what “service” is, we then have the commercial impact. Whatever is required in meeting the reasonable service expectations of our clients has an impact upon the profitability of our business, and the ease with which we can leverage growth. More service costs more, right? More cost equals less profitability, right?Perhaps not.
It has been tested repeatedly over the years, and countless studies highlight the correlation between:
- service we provide
- client satisfaction
- referrals and word-of-mouth prospects
- There is no doubt that there is a direct relationship between our clients being satisfied and their loyalty to us or our business. There is equally no doubt that if we establish the right level of satisfaction and loyalty then a greater number and quality of introductions to other future prospective clients follows.
When we get right down to it, we would have to accept that as “service providers” our interpretation of what service is or means doesn’t actually matter. if the clients who are paying the fees and putting food on our table feel anything less than “satisfied”, then we have missed an enormous opportunity and we must look to ourselves to fix it.The wrong type of service – no matter how well it may have been delivered – does not guarantee client satisfaction. And there is the link between service adding to profitability or detracting from it.Sending quarterly reports on protfolio performance on a monthly basis instead of quarterly may seem to the adviser, regulators and institutions as an elevation of service. It certainly adds to the firms cost and detracts from profitability.To most consumers however this is most likely to become an annoyance, resulting in them valuing your service offering less.However, the fix may simply be about managing expectations better.That disconnect in what the respective parties believe to be “good service” which leads to dissatisfaction is a reflection of the mismatch between customer expectations and our own of what “good service” is. It is not about how well we provide service therefore, but about what constitutes “service”. Our service delivery might actually be executed at precisely the standard that we set out to achieve, but if we didn’t all agree on what the service is (as opposed to our ongoing technical or regulatory obligations) then there is room for dissatisfaction.This is the primary area to look at in lifting satisfaction levels with clients…the stuff beyond our actual expertise. Before racing off to invest in more corporate gifts or run another client appreciation evening though, think strategically. Have we put in place a mechanism for managing the clients expectations to begin with? Have we educated them on what they can expect in the way of valuable assistance, or what that even means? Have we separated the functional advice obligations which are perhaps not terribly highly valued by the customer, from those functions we might provide which could be valued by them?If we have not done that, then it doesn’t matter how we try to address service levels, as the client expectations will continue to evolve and lift with each improvement we introduce as no parameters have been set for what is a reasonable and valuable level of professional service. The first step to lifting service levels is therefore to define what the acceptable professional standard is, and the second step is to figure out how the clients understanding of those standards can be managed most efficiently. That is then simply the baseline for retaining the client perhaps. The “perhaps” is because if all a professional services firm does in the way of service is provide the minimal regulatory requirements, then that is no valued service at all. You just commoditised your offering as every competitor is delivering that as well, at the very least..So when thinking about how to elevate service levels in order to create more valuable client relationships (and a more valuable business) I would suggest that one needs to first separate out those things which are simply functional requirements of our advisory role and focus upon ensuring maximum efficiency is obtained in the delivery of those ongoing “services”. Then make sure clients expectations of what a “good service” would be is clearly understood.Then you can begin to think about how you can go the extra mile and deliver a WOW factor…
Related: New Thinking In Professional Development For Financial Advisers