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September 01, 2007 at 04:00 AM
2008 ISN’T AS far away as it seems–especially if, like many advisors, you’re beginning to think about your business plan for next year. How many new clients will you bring in? How much will you pay your support staff? Then there’s an often-overlooked question that could have an even larger impact on your bottom line: how will you keep current clients and staffers from leaving?
I’ve read that the cost of replacing customers can be five to 10 times as much as it would cost to retain them, and that you can easily spend one-third of a skilled employee’s annual salary trying to find a replacement. With that in mind, consider how these ideas for strengthening relationships might help you sustain the loyalty of your clients and fellow workers.
Q: I’ve just gone through my third new hire in three years. All these junior planners have had great credentials, and made a good impression in quarterly client meetings. But when they resigned, they all complained about too much busy work and not enough face time with our most important clients. What’s going on here?
A: The feedback you’ve been getting indicates that your new employees needed and wanted to feel more valued, more intellectually and emotionally stimulated, and more in the loop. Although you may not have been ready or willing for them to take on any of your most valuable clients, there are probably ways you can more fully engage other new hires in the future.
For example, you may need to take more time to learn about the hopes and expectations they bring to their work. Maybe you should be mentoring them more actively. Do you have group meetings where their input is appreciated, or individual meetings to track how things are going? Should you be trusting them with more challenging tasks, so they feel their skills are growing and developing under your tutelage? Are you giving them enough praise when they do great work?
Be sure to ask departing staffers for suggestions about what you could be doing differently. By requesting their comments in a thoughtful and non-defensive way, you may end up with a slew of new ideas about how to establish better connections with new employees (and old-timers as well, I wager).
Openness to change may seem like a risk, but I hope you’ll consider taking these steps. They could help close the distance between your expectations and those of your new hires.
Q: I’ve recently lost a couple of good clients to a competitor whose experience, products, and pricing are similar to mine. As far as I can see, the only difference is that he’s a good schmoozer who often invites his clients to lunch or a game of golf. Don’t people value an advisor who tries to keep the relationship on a professional level, as I do?
A: An extroverted people person (or, as you say, a good schmoozer) can attract a certain kind of client–as your frustrating and ego-bruising experience shows. However, for every client who wants to be engaged on a personal level with their financial advisor, I believe there are others who prefer more distance in their relationship.
To find out which kind of connection a new client wants, discuss this issue in your first meeting. What do they expect of you and your interactions with them? Do they want to keep the relationship strictly business, or would they value such extras as golf outings or appreciation dinners?
The other question is how much you’re willing to stretch your habitual mode of serving clients. Explore your own nature, your desires, fears, and resistances to decide which “schmoozy” activities would still meet your definition of professionalism and which would make you too uncomfortable. I believe that many successful financial professionals have learned how to strike a good balance between professionalism and more personal involvement.
If you just can’t see yourself inviting clients to lunch or competing with them in a round of golf, you may need to accept that you’ll seek a clientele who want a strictly business relationship with no frills or perks. Not that there’s anything wrong with that! You’ll just need to become more at peace with the notion that there are others who prefer a closer, more sociable connection.
Q: Even though I’ve always thought of myself as a good boss, I’m at the end of my rope with our newest employees. They want to immediately make as much money as I do, and show little respect for our firm’s culture of hard work. I’m ready to can them all and hire some grayhairs with a decent work ethic! How can I get them to accept my guidance instead of constantly challenging me?
A: If you’ve concluded that all young people are slackers, I suspect you’ll end up having a pleasant, comfortable company of older employees–who will all retire when you do, leaving your company unstaffed.
Let’s not throw out the baby with the bathwater. I recommend that you take more time to interview prospective hires. Ask these young folks about their past experience with teachers and coaches. Do they value working with older mentors? Do they have experience in working hard to make gradual progress toward a goal?
What they say, and how they say it, can help you choose new employees you enjoy mentoring and working with. In fact, these younger folks may even be able to teach you a few new tricks.
