Scaling services to different clients

Financial advisors and other service professionals commonly rank clients using an A-B-C-D system. “A” clients are best, whereas “D” are those who represent limited revenue or referral opportunities, waste your time, or rue the day you entered the profession.

I recommend using a precious metals model, such as the one presented in Table 16-1, simply because I don’t like the idea of giving clients a “C” or a “D” as if they’re average or below average clients. After all, if a client found out he was given a “D,” he would understandably be upset. With the precious metals model, a client would be less likely to be upset finding out that he was in the bronze bracket. He would probably even expect it given his level of engagement. (The platinum metals model also supports the whole financial motif.)

In Table 16-1, the column on the left lists the services and perks, while subsequent columns present the various service levels: Platinum, Gold, Silver, and Bronze.

All clients deserve quality service, but that service doesn’t need to come from you as financial advisor or firm owner. It can come from an associate or assistant. For example, I spend most of my time working with clients in the Platinum and Gold brackets, whereas associates at my firm spend more of their time servicing clients in the Silver and Bronze brackets. Clients can move up or down in the brackets. For example, if one of our associates uncovers a diamond in the rough, he escalates it to my attention for collaboration.

A unique service item is our charity support benefit, which ties the values of our firm to that of our clients. We make charitable contributions to the different nonprofits that our clients support. The contributions come from a pool of funds allocated to the client tier. The more engagement and understanding we have from our clients of what causes they care about, the more gifts we’re able to make.

If you’re running your practice as a lone wolf, you have only your own time to leverage when conducting client service work. Although this approach is common practice, it’s a highly inefficient and costly use of your time and expertise as a financial advisor. Consider allocating specific upgraded client service work (in-person check-in or checkup) to a full-time associate (recommended) or a part-time assistant. Only developing a service offering for your Platinum clients is good enough to gain some strategic efficiency. At least you won’t be running around like a chicken with its head cut off, trying to deliver great service to all clients all the time.

Giving your best clients concierge care

You’ve probably heard of white glove or concierge services, usually in reference to service at a luxury hotel or a fine dining establishment, but financial advisors should also deliver this level of service to their Platinum clients. Your concierge care needs to include higher levels of service in the following areas:

• Time: The most valuable commodity anyone has is time, so the most valuable component in your concierge care offering is the quality time you spend with clients. Whether it’s reviewing a client’s portfolio in a face-to-face quarterly meeting, discussing the family’s estate plan, or sharing a leisurely meal, the interaction demonstrates your time commitment to your best clients.
• Attention: The close attention you pay to all aspects of a client’s financial planning and management shows that you care. Listening attentively to their concerns and proactively addressing issues instead of waiting for clients to call are both ways to pay increased attention to your best clients’ financial matters.
• Appreciation: Taking your client out to lunch or dinner, sending handwritten birthday and holiday cards, checking in with clients regularly, and giving tokens of your appreciation, such as an annual gift basket, are all ways to show your appreciation to clients.
• Problem-solving: When clients come to you with problems you can’t solve in your capacity as their financial advisor, consider making a referral to someone who can help. Through your interactions with people in a wide variety of professions, you probably have clients who’ve encountered and overcome a similar challenge or are experts who can help.

The challenge with promising a higher level of service is that you had better deliver; otherwise, the empty promise will backfire. Instead of developing deeper client relationships, you’ll send your clients running into the arms of another financial advisor.

Considering demographics

Demographics are statistical data relating to the clientele you serve. Table 16-2 provides some general guidelines for scoring clients in five different categories: annual revenue, marital status, profession, net worth, and multiple solution sets. In the sections that follow, I describe each category.

Feel free to adjust the numbers to more accurately reflect the demographics of your targeted clientele.

Weighing psychographics

Scoring clients psychographically enables you to size them up based on their attitudes, values, the expanse of their social and professional networks, and their willingness to refer people they know to you. Table 16-3 provides some general guidelines for scoring clients in five psychographic categories. In the sections that follow, I describe each category.

Assigning clients to service level brackets

Table 16-4 shows the total score ranges that apply to each service level bracket. After tallying a client’s score, simply use this table to find out which service level the client qualifies for.

Don’t be surprised if a client you considered Silver is actually Platinum. Clients I naturally assumed were at least Gold sometimes showed up as Silver, and some Silver clients turned out to be Platinum. The weightings for each factor are all equal, so strengths in some areas can make up for weaknesses in other areas. For example, a client who may not be a big direct revenue generator for you, could still be a Platinum-tiered client, deserving that elevated service level because he scores highly in other critical areas, such as being a connector and disciple to your efforts.

Hosting special events

Consider hosting a special event once a year that’s open to all clients and their families and friends. You provide the food, soft drinks, and entertainment. Make the event a no-sales zone, so clients and prospects and their families and friends can focus on getting to know you on a personal level. Dress casually, and leave the business agenda at the office. The most business-y thing you can do at the event is to have people sign a registry to provide their contact information (with your promise not to share that information). You may even want to have a prize drawing to make the registration more festive.

After the event, send follow-up cards to all clients and anyone who registered at the event. Make the card consistent in appearance and tone with the original invitation. Thank the recipients for coming and invite them to schedule an office visit at a later date, so you can find out how to add value to their financial lives.

Inviting clients to breakfast or lunch

Working lunches or business lunches (or breakfasts) are wonderful ways to meet with prospective or existing clients. Reserve dinners for only your top-tier client relationships. Follow these guidelines for taking a client or a prospect to lunch:

• Ask questions and listen. Use this time together to find out more about your client’s mindset and concerns instead of flooding his brains with information that’ll only spoil the meal.
• Don’t use printed materials at the table. Trying to show illustrations, graphs, tables, and other material ends up being clumsy and awkward, especially when the server comes by to take orders, deliver food, and the like.

• If you must use materials, prepare a folder ahead of time containing the items you want to share but hold onto it until you’re done eating and the table is cleared. During your mealtime conversation, convey the gist of whatever you’re meeting to tell the client about. After the table is cleared, share the folder and let your client know that you’ll follow up to schedule time to review the enclosed items and answer any questions he may have before moving forward. The meal conversation conveys the general concept, and the folder provides the details.

  Don’t order dessert, because it prolongs the process of sharing some closing discussion items in printed form.

• Allow only one lunch per prospective client. Don’t get into the habit of spending money taking the same person out to lunch time and again, hoping for business to materialize. The point of the lunch meeting is to connect away from an office environment and have more of a discussion and conversation, during which you find out more about the client’s needs and desired outcomes. You don’t need more than one meeting to achieve this objective.
• Allow only one lunch per existing client per year. If this client is segmented into a dinner-eligible client, then you can justify two or even three lunches per year in place of an annual dinner.

The big trend lately is to dress down in a business setting, but I still wear a suit and tie every day and to every client meeting for two reasons: First, putting on a suit and tie functions like putting on my armor. It prepares me mentally for the day ahead and the challenges I’ll face whether from the market or from my clients’ concerns, worries, or rejections. Second, business attire signifies to your client or prospect that you’re a professional. Wearing jeans and a blazer, though it’s acceptable (and here in SoCal seems to be a uniform), doesn’t bring the same gravitas to your meetings or interactions. Business attire still carries a visual cue that important and critical work is in the works, whether you’re in the office or at a formal or semiformal social function such as a dinner or event.

Recognizing the need to budget your time

As is the situation in my practice, my best clients spend time with me personally. Conducting regular in-person portfolio and financial planning meetings, usually over lunch, works best. In my commuting situation, one client lunch a day means I’m away from the office for more than three or four hours: 1.5 hours for lunch plus 1.5 to 2.5 hours in round-trip travel in Southern California traffic. This time expense is all the more reason to reserve it for those Platinum clients who value your advice and share you regularly with others.