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February 01, 2008 at 02:00 AM
In our past two articles, we discussed qualitative research that JPMorgan conducted on both affluent clients and their advisors. The goal of this proprietary research was to thoroughly examine the referral process and determine what was preventing advisors from maximizing referral success. The study revealed that there was no single thing that could maximize success. Rather, it was as individual as each advisor and his or her clients. We showed that maximizing your referrals depends on a unique combination of four elements:
1. Your referral attitude;
2. Your clients’ referral readiness;
3. Quality of your relationships with your clients;
4. Perceived value of services you deliver to your clients.
Since we covered three of these elements in the last two articles, this month we will focus on the quality of client relationships.
All too often, when I speak with advisors about “client relationships,” I hear moans and groans. Underneath those groans may be the unspoken feeling that “people pay me to manage their money, not to date them.”
Granted, your clients are not paying you to build a relationship in the traditional sense; however, there needs to be a level of professional intimacy between you and your clients so that you both may achieve success.
If I haven’t lost you by using the word “intimacy,” congratulations for being open minded and wanting to learn new concepts that can enhance your practice. Often I have seen advisors shut down the second that word is mentioned. However, intimacy is not implying affection, but rather that the views of the advisor and client are aligned. We must be in lockstep with our clients, listening to them to understand their positions and feelings. We’re not talking about major psychoanalysis here and it doesn’t have to be overwhelming–all that is needed is to understand what is important to your clients.
Listening for Signals
The process to accomplish this is as simple as first asking, and then listening to the answer. Listening leads to understanding. If you understand someone else fully, then you know how to get closer to that person and work better together.
At the risk of sounding like your significant other, I’ll point out that too many of us hear but do not truly listen. Hearing is a physical ability while listening is a skill. Effective listening starts with being attentive, not interrupting, not fidgeting and, most important, reserving judgment. To become an effective listener: open your ears, shut your mouth, and open your heart. Showing interest in what your clients are saying can start with taking notes and restating what clients are saying to you.
I would be remiss if I did not add this one last thought on listening: a good listener pays attention to what clients are not saying as well as their spoken words. Look for non-verbal cues, such as facial expressions and posture, to get the full gist of what your client is telling you.
For example, Joe Navarro, a world-renowned expert in non-verbal behavior, states that when you see women playing with their hair or touching their throats and men touching their necks or faces, it generally means they are not comfortable and these non-verbal behaviors are attempts to calm themselves down. When this happens, stop speaking and ask them what they are thinking or if they have any question. It is vital that you find out what is behind the discomfort right away rather than finding out too late–such as when you get their account transfer forms.
So the level of success you’re looking for rests on really listening to clients and letting them know that you value and understand what they are saying.
Besides being a good listener, there are four principles to good relationships:
1. Work on the relationship;
2. Address problems as they arise;
3. Spend enough time together, but don’t overdo it;
4. Laugh often.
I know all this may sound like an episode of “Dr. Phil,” but don’t despair. These four principles can easily be translated into tangible business concepts with which we can be very comfortable.
Work on the Relationship
Relationships are not a one-stage process, but an ongoing effort, based on an accumulation of many little things. The end result is that the clients feel that they are understood and given what they need and want. Too often, we leave this to pure intuition. People are complicated and react to events in different ways, so the more you put a process or science to understanding these differences, the more effective you will be.
To help sharpen your intuition, you might want to refer to the June 2006 Investment Advisor article entitled, “Listening to Margaret Mead: What anthropology can teach you about the affluent.” This article provides a process for identifying your clients’ buying behaviors and tools to help you adapt your service model to their behaviors. Appreciation of clients’ buying behaviors will provide great insight into what motivates them, why they do the things they do. The most successful advisors determine what each client values most and then work to deliver value that exceeds the client’s expectations.
