The following is based on one of Norm Trainor’s clients. All of the names and telling details have been changed.
Successful businesses build strong and enduring brands. The strength of the brand contributes to the sustainability of the business and, in the same way, successful advisors can create a sustainable practice through building their brand.
This was a lesson Jay needed to learn. When we first started working together, Jay shared his frustrations about the ups and downs of his business. In his 12 years as an advisor, he had experienced many successes. Yet, in the last 5 years, his income fluctuated from a high of $475,000 to a low of $195,000, making it difficult to predict his income from one year to the next.
The solution to this problem was actually quite simple. His practice required a brand makeover. Jay’s success was based largely on his sales ability: He was very good at making sales but not particularly interested in what happened after the sale. The economics of his practice were geared to getting new clients and as a result, his brand equity was tied to his capabilities as a salesperson.
In his book, Married to the Brand, William J. McEwen points out that in building a brand, the objective is to create a brand marriage. Great brands are built on the number of brand marriages between consumers and the business, not the number of “one time” sales. A brand marriage is based on an ongoing connection between the client and the business, which creates an emotional and tangible bond.
In a similar manner, the sale of a financial product creates a bonded relationship because it is often based on the promise of future delivery of value. Financial products are intangible by nature and it is the commitment of the advisor and his or her team to maintaining the relationship after the sale that fosters a personal and emotional connection and makes the benefits tangible to clients.
While the return on an investment product is important, consumer research teaches us that the relationship between the client and the advisory firm is the linchpin that sustains and expands the equity for the client and the advisor. The natural result of relationships, whether in marriage or business, is toward erosion of sensitivity and engagement. If you want to maintain a relationship you have to work at it.
Armed with this understanding, Jay restructured the economics of his practice to create brand marriages with his best clients. He set out to build his reputation based on after-sale service. His strategy for growing his practice shifted from making sales to managing client relationships. Rather than trying to get prospects and clients to want what he has, he set out to have what they want. This required an interest-based approach in his dealings with people.
Successful relationships are based on commonality of interests. The first step for Jay was to survey his clients to determine what was important to them. Then, he became a student of people, particularly his clients and potential clients. He stopped selling and started helping his clients to buy. This dramatically changed the way he was perceived and he became much more referable.
As a result of his increased confidence in building and maintaining relationships, Jay began to proactively seek out introductions, recommendations and referrals from his clients and network. His revenue grew dramatically, particularly through more sales to existing clients. The irony is that when he focused on relationships rather than sales, the number and size of his sales more than doubled. He is now building a sustainable business.
Norm Trainor is the founder of The Covenant Group, a company specializing in practice development for advisors. For further information, visit his Web site at www.covenantgroup.com.