In this month’s column, we will introduce the concept of Loyal Client Advocates. One of our coaching observations is that high-performing advisors reject the general concept that every single client is a ripe target for referrals. Many top advisors think more strategically about who they want to connect with and by what means.
Our research indicates that the typical financial advisor has clients that can be grouped into four client segments:
Loyal Client Advocates have such a strong relationship with the business of their own financial advisor that they think and behave more like owners or partners. They are extremely influential in providing new client introductions (i.e. referrals) and wouldn’t even consider using an alternative advisor. They account for about 3% of all clients.
Engaged Clients, 17% of the total, are engaged with their financial advisor and very satisfied, but are not quite at the apex of client satisfaction.
What Your Peers Are Reading
Questionable Clients are the largest group at 72%. They are not bad clients, but they certainly are not fully committed either. Most importantly, although they are not actively looking elsewhere, they would consider switching allegiances to another advisor if something better comes along.
At-Risk Clients are the 8% who are actively looking for an alternative financial advisor. The reasons for their dissatisfaction can be varied: an awful client experience or maybe the clients’ requirements just don’t fit with what the financial advisor is delivering, or possibly there is a serious personality disconnect between the advisor and client.
Why Loyal Client Advocates?
The value of new client introductions by Loyal Client Advocates may seem self-evident for those of you who have been in the business for any length of time. Yet, it might be helpful to review these benefits here:
o The ‘sales cycle’ is shorter.
o The closing ratio is higher.
o Clients are more likely to match your ideal client persona.
o Clients are more profitable.
o Clients prefer to meet by way of introductions.