For most people, financial planning is difficult and complex, which is why they seek out professionals for assistance. Yet while the outcomes of working with a financial planner are positive, the actual experience of going through the planning process is not always pleasant. As one focus group researcher put it, “The financial planning experience is a blend of a dental exam, math class and marriage therapy.” The challenge for growing a financial planning practice continues to become more difficult given an increasing number of financial planning practitioners competing for business, with less and less differentiation from one firm and advisor to the next.
By contrast, the Build-A-Bear Workshop provides an entirely different experience. Build-A-Bear differentiates itself not by the product it sells—teddy bears, a product long since commoditized—but by the experience that customers engage in to get the teddy bear. Children visiting Build-A-Bear literally build the bear from scratch. The entire process turns from a few minutes at a cash register or website into a multi-hour interactive experience. The children have a much deeper buy-in to what they get (as their tagline notes, Build-A-Bear is not where teddy bears are bought, but “Where Best Friends Are Made”), and customers spend twice as much or more to get the same commoditized product at the end.
That raises the question: What if the client financial planning experience was more like a Build-A-Bear experience, where your clients happily pay twice as much for your services and want to spend hours going through the process and the experience of it?
The Build-A-Bear Workshop Experience
The Build-A-Bear Workshop is essentially a store for teddy bears, but what makes it unique (and successful—the company was founded 15 years ago and is now earning approximately $400 million in revenue per year, selling teddy bears in more than 400 stores in over a dozen countries) is that you don’t just buy a teddy bear, you have a teddy-bear-buying experience, from selecting its fur to sewing in its heart, choosing its clothing and accessories, and giving it a name.
Unfortunately, for several years the Build-A-Bear Workshop stock (BBW) has been languishing, generally blamed on overly aggressive expansion after its early successful years, being hammered by the economic recession and weak same-store sales (after all, once you build your best friend, there’s not a lot of reason to go back anytime soon). Nonetheless, the fact remains that the company sells a relatively old and commoditized product at a significant markup, and in a process that not only takes hours to complete, but is prized because it takes hours to complete.
In other words, Build-A-Bear is unique because it was able to turn a low-price, commoditized product purchase into a higher-priced, multi-hour teddy bear experience.
Today’s Financial Planning Experience
While financial advice isn’t exactly a commoditized product like a teddy bear, it’s hard to say much positive about the financial planning experience, either. Yes, the outcomes of the financial planning process are good, delivering both psychological value and, according to recent research, some real financial value, too. But that’s the outcome at the end of the process, not the client’s experience of the process itself.
So what about the experience? At a recent presentation for the FPA Retreat conference, Dr. David Lazenby perhaps summarized it best, based on recent research he had conducted with focus groups of actual financial planning clients. Their conclusion: “The financial planning experience is a combination of a dental exam, math class and marriage therapy.” Ouch.
While such a characterization of the financial planning experience sounds quite harsh, upon further reflection it appears to be sadly accurate. After all, financial planning does involve taking people through a process where they are scrutinized regularly (and often feel guilty about what they know they should be doing but aren’t). It requires people to deal with more math than they may have faced since high school or college (but with higher stakes, as flunking here means failing to understand your financial future). Furthermore, with couples, it often puts clients in the awkward position of being forced to discuss, and sometimes compromise on, long-term goals and current trade-offs that they never considered before.
Simply put, while the outcome of financial planning may be positive, it’s hard to say much positive about the typical experience of going through it.