You work hard to attract new clients. Yet many marketing and business books say that keeping clients should be job number one for a healthy business. Perhaps this is a sentiment best summed up by author and consultant Richard Buckingham when he said, “Why search for new clients when you have plenty of clients right in front of you?”
And according to the latest AdvisorBenchmarking survey, many RIAs agree. The survey ranked a number of financial measures that advisors use to evaluate the health of their businesses, and 34% indicated ‘client retention’ as their second most important measurement to evaluate the performance of their business–coming in right behind asset under management growth (39%).
The Secret Sauce of Client Retention
Client retention is a tough formula to quantify, but “service” and “meeting client needs” are two of the basic elements. Serving clients well basically means delivering what you promise. While identifying and meeting your clients’ expectations is an absolute must for satisfying them. This includes, but is not limited to, ensuring the timely delivery of financial plans, money management services, advice about insurance, budgeting, cash management, etc. If clients feel their expectations are being met, they will have increased confidence and trust in you. But knowing your clients well isn’t limited to just knowing their investment goals. It’s also essential to identify their investment outlook and knowledge level. Investing the time early on to understand these client expectations will go a long way to building long-term and strong client relationships.
Three things you can do right now to know your clients better and enhance client retention:
1. Understand Your Clients’ Expectations of Current Events