If you're not highly focused on improving your level of client satisfaction, you should be. This is true regardless of whether your clients aren't thrilled with you or they think you are the greatest gift in their lives. The fact is, your clients' overall level of happiness with you is central to your ability to fend off competitors and grow your business rapidly.
Client satisfaction is very much on the minds of many advisors. In my firm's recent advisor survey, we learned that 71.4% of RIAs are "very or extremely concerned" about boosting client satisfaction. In fact, this concern was one of the most important ones cited by RIAs in our research - the only two concerns deemed more important were delivering high-quality products and services, and significantly growing assets. (See the chart on the next page.)
There are, of course, numerous reasons for making client satisfaction a priority. We've long known, for example, that satisfaction breeds deep loyalty in clients. That loyalty, in turn, provides you with very tangible business benefits: Highly loyal clients gave their advisors far more assets on average than clients who were less satisfied, researchers have found. And the most loyal clients made nearly 12 introductions a year, on average, to new prospective clients, while less-satisfied clients made just 2.1 introductions on average.
WHAT MATTERS MOST
Even though we find that while many advisors are concerned with boosting satisfaction among their clients, they often don't know what to do to make it happen. To ensure thoroughly satisfied clients, first understand exactly what clients really need. The base of any great advisor-client relationship is the level of relationship satisfaction a client feels. The way clients feel about their overall relationship with you is more important than even the level of satisfaction they feel about your service and your investment performance.
In general, if clients are unhappy with short-term investment performance but pleased with their relationship with you, they'll likely remain with you. A strong relationship will likewise help smooth out administrative bumps.
Relationship satisfaction requires strong, ongoing personal interactions between you and your clients. There are several drivers of high levels of client relationship satisfaction:
1. Hustle. The key to high marks here is reliability. When you make a promise, keep it, and keep it on time. Set a goal of providing perfect service, with plenty of attention to details. Researchers have found that nearly two-thirds of very satisfied clients see their advisors as being perfectionists, compared with less than 7% of very dissatisfied clients.
2. Avoid surprises. While clients dislike service failures, they dislike unpleasant surprises even more, making it your job to prevent them as much as possible. To rate well with clients in this area, actively solicit opinions and perceptions - including negative ones - from your clients. While more than half (55.3%) of very satisfied clients felt their advisors wanted to hear their complaints and feedback, a mere 6.5% of very dissatisfied clients felt this way.
Not only will this help you spot and head off major problems, it will clearly demonstrate your concern about service to your clients. In addition, whenever an external disaster occurs, you will do well to get in touch immediately with clients.
3. Warmth. Good manners are not enough: Virtually all clients, satisfied and dissatisfied, believe their advisors are generally courteous. Affluent clients are looking for true emotional warmth. When asked if their advisors are warm, 64.3% of highly satisfied clients said yes, while only one-quarter of dissatisfied clients had this response. Keep this in mind as you make your hiring decisions. If your staff needs help in this area (or you do), consider classes to help improve interpersonal skills.
4. Active communication. Your clients want to be kept informed not just about their portfolios and financial progress, but also about important changes at your firm and with your staff. Don't let your clients hear about personnel changes from competing advisors - this is the type of negative surprise you want to avoid.
Very satisfied clients scored their advisors well in this area, with 77.9% believing their advisors provide information in a timely manner; 75.3% acknowledge their advisors' efforts to give regular briefings. As can be expected, very dissatisfied clients scored their advisors poorly, with just 19.4% feeling that they received timely information.
Given how important it is to affluent clients to be kept up to date, it would be wise to incorporate tools into your client database that help you flag any relevant situations and issues.
5. Listening skills. Affluent clients want advisors who pay attention. Listening skills are therefore another important element in client satisfaction. Too often, advisors believe they must educate their clients, as opposed to listening to their needs, fears and wants. Your goal, as always, should be to learn more about your affluent clients, and listening is the way that you will do that. A significantly greater number of satisfied clients believed their advisors spent enough time listening. That said, customize your approach based on your client base - some of whom will prefer short, task-oriented meetings and others who may prefer drawn-out conversations where a range of financial and non-financial matters are discussed.
6. Client focus. Affluent clients generally care about having you focus on their needs. You have to be able to convey the sense to each client that you are striving to understand his or her unique needs and provide individual solutions. Specifically, 75.7% of satisfied clients felt their advisors made a significant effort to understand their unique needs, compared with only 25.8% of dissatisfied clients.
Your approach to being client-centric will depend largely on the types of clients you serve. For example, if you work with family steward types who care primarily about taking care of their loved ones, you'll want to make sure to bring up key family members in your discussions (perhaps even getting them involved in your client meetings, where appropriate), and remember family occasions such as birthdays.
NOT ABOUT SKILLS
Interestingly, your competence is not a huge factor in determining client satisfaction - because clients assume their advisors are competent. Even clients who are very dissatisfied with their advisors are still likely to rate them high in the area of competence. This doesn't mean you shouldn't justify your clients' view of your competence, of course. Most of the items you create through your credibility marketing efforts - including articles, research papers and books - will all serve to reinforce your affluent clients' belief in your competence as a wealth manager.
In the end, we all know it's much smarter to keep your ideal clients satisfied and loyal than to be forced to constantly attract new business. By taking the right steps to ensure a highly satisfied client base, you will position your practice for stronger growth - and get more enjoyment from the work.
John J. Bowen Jr., a Financial Planning columnist, is founder and CEO of CEG Worldwide of San Martin, Calif., a global training, research and consulting firm for advisors.