This book was gifted to me a while ago and as you can see by the dog ears, it is by far one of my favourites.It's called 'Priceless: The Myth of Fair Value' by William Poundstone.I've read it many, many times and I think right here and now given everything that's going on the industry, it's worth revisiting some of the concepts.Now, the concept I want to share with you today is probably one of the key ones to understanding how clients think about your services when it comes to whether they should continue with you or whether they should leave.
You need to know this in order to make sure you can retain clients as effectively as possible.
The big secret here is....This idea of loss versus gain.The reality is we as human beings, are far more attuned to the risk of loss.How does this manifests itself in your world?Well, let's say you're coming up for renewal discussion with a client.You have this idea about talking about all the things that you're going to do the next year, all the services you're going to deliver.Don't get me wrong, this is a good conversation to be having.But, understand that the number one thing that is going to stop clients or keep clients from continuing to work with you is their focus on -"What will I lose?"
Specifically, if they choose not to work with you anymore they stand to lose : The fact that you probably know more about their financial affairs than anyone else. They'll have to start again from scratch Maybe they'll lose access to certain reporting you did. They'll lose the ability to phone up and ask questions.
They'll lose all that financial his gory of where their situation is and how they've done it, and they'll have to find somebody else to start again.You with me? Now, this is key because ...If clients are thinking about disengaging, they are now mindful of having to make a decision.This is the point in time that you will have to make clear to them, all of the things that they will have to do themselves or no longer have you there to do for them if they disengage your services.If you combine this process with a really great review experience where you talk about the future and you give them clarity, I am pretty sure that every single one of you out there will have far fewer issues when the 12 month renewal comes up.The take home is ...When it comes to human beings, we value loss a lot more.So when you're having retention conversations with clients understand that although it's about showing them the way forward, owning the future and knowing the next step, it is equally as important to make sure they know all the things they will lose if they make a decision to take it on themselves or disengage.Hope this is helpful.Related: The 5 Most Common Pricing Mistakes Advisors Make