People buy financial advice emotionally and for problems, in contrast to the rational and solution-oriented tactics many advice groups use.
Customer Return managing director Nathan Williams said “people buy emotionally” and in response to problems, in contrast to “most marketing stuff [which] talks solutions”.
“Clients look for problems to solve rather than … the solutions, so list problems and ‘flag a client down’ by specifying their problems,” Williams said.
“Clients stall if there are too many problems, so choose one factor and focus your business around that uniqueness.”
Existing clients could be the best sources of clients, with a recent FPA survey showing 90 per cent of work came from referrals, and the other 10 per cent from public speaking, he told an FPA roundtable in Sydney yesterday.
“When you’re selling the invisible, referrals are key,” he said.
“Referral means some level of implied trust, so successful referrals strengthen client relationships.”
The percentage of people who believed other people versus advertising was 85 per cent to 14 per cent respectively, so referrals were a more profitable way of doing business.
Williams said advisers could leverage their client base for more referrals and ask clients to articulate the firm’s value.
“A lot of businesses are saying the same things, but the reality is that consumers are risk-averse and so they put a lot of store in referrals. What is ‘value’ in clients’ eyes? It’s important to get that client feedback,” he said.
He questioned the value of the net promoter score method, in which – on a scale of one to 10 – clients were asked the likelihood of their recommending the advice group to others.
“The problem is that it’s a question about intent but not about action – up to 90 per cent say they would do it, but in the preceding four months what have they done? Often this score drops down to 10 to 20 per cent,” he said.
Complaints could be very useful for advisers, he said.
“The ‘complaint iceberg’ is counterintuitive – we actually want to get customer complaints. If we know what’s wrong, then we can solve them. When we don’t have any negative feedback, then we’re in a bit of trouble. Complaints can drive more business,” he said.
