The people who are living in that fictional Lake Wobegon are not doing that well. In fact, the stark truth is that all of us generally think that we are doing a whole lot better than we really are--a situation I call the Lake Wobegon effect.
Frankly, we have all been spoiled recently. Who spoiled us? Starbucks for one. Why do we spend three or four dollars at Starbucks for a simple cup of coffee? It's because of the experience. The main question that advisers should be asking themselves today is, "How can I give my clients a Starbucks--and not a Lake Wobegon--experience?"
Starbucks has done something that few other companies in the marketplace have been able to accomplish. Senior managers there thought about the experience that their clients would want to have, and then they delivered it. In the process, they have taken a commodity, something that costs about 50 cents, sold it for $3.50, and made us crave it.
This is exactly the same experience that financial advisers should be creating in their own businesses. Clients who are wildly happy with their experience not only will stick with you, they will send you many referrals.
It also makes the selling process that much easier. If your prospects are finding their expectations met at every step of the relationship, then your closing ratios will increase dramatically, and the sales process will become painless. I call it the "No-Sell Sale." There really is no selling involved--you just systematically deliver exactly what your client wants at every stage. The net result of this approach is a lifetime relationship with a happy, satisfied client.
More than two years ago, the president of H&R Block Financial Advisors, Brian Nygaard, called us. His problem: his company bought a discount brokerage firm a few years before, and it was having a difficult time making the transition to a full-service financial services firm that meshed with Block's existing tax base. He wanted the firm to move from doing transactions over the phone to face-to-face consultations.
Nygaard said to me, "I am concerned about the client experience. What does the client really expect from us?" The question was simple but profound at the same time. What he really was asking me was, "How do our clients want to feel, experience, and act because they are doing business with us?"
One thing Nygaard knew for sure, the resulting model had to be consistent across the entire country. H&R Block has approximately 100,000 tax pros and 1,500 financial advisers--and they all have to be on the same page, delivering the same message to their many clients.
Part of our engagement was to create the Client Experience Model for H&R Block Financial Advisors, a program it has just started rolling out to 10 markets nationally. Creating the Starbucks experience is not always fast--this process has a lot of moving parts, and it can take a long time to execute.
In its most basic premise, however, it is incredibly simple. What do you want your clients to experience by being in a relationship with you? If your clients are having Starbucks-like experiences that rate an eight, nine, or 10 at every stage, it is highly likely that you will not only make the initial sale, you will create a raving fan who refers more clients.
If the experience is only a mediocre Lake Wobegon five, six, or seven, it will be that much harder for you to close the sale and even more difficult to generate referrals. If your clients are experiencing a two, three, or four, you could be looking at extremely unhappy investors who in the best case will leave you and in the worst case will be looking for an attorney to make them feel better.
Here are the steps that we take to help broker-dealers and advisory clients create the ideal client experience for their investors. I like to call these steps the secret decoder ring, because once you have the ring, you can look at all of your client touch points and determine if you are creating the experience you want your clients to have.
Meet with your staff and co-workers and brainstorm on these questions:
What do your clients want in their relationship with you? It is likely to be a lot like the experience of being in a Starbucks--a consistent, predictable, comfortable, warm, secure, friendly, and safe relationship that helps to bring them a sense of peace and tranquility about their financial future.
Start by making a detailed list of the most common attributes your clients desire, because you will use this list to evaluate your entire service continuum. This is the secret decoder ring for your advisory practice. Once you have identified the secret decoder ring, use it to evaluate all aspects of your firm.
How do client touch points compare with the ideal client experience? Make a list of all of the major touch points that your clients have with your advisory firm in chronological order. Next, evaluate each of these points from the perspective of the client with your secret decoder ring.
The list of touch points could look something like this:
- A marketing presentation made in a seminar or brochure;
- An initial meeting in your office;
- Follow-up meetings;
- Client appreciation events;
- Quarterly reviews; and Service requests.
At each specific touch point, think about what a client would want at that stage in his or her relationship with you. It may be helpful for you to walk everyone in your firm, even the receptionist and the file clerks, physically through the office, covering each touch point in your process, with that secret decoder ring. Make sure that they are thinking like a client would be.
Let's take the first initial meeting in your office as an example. In working with one of our financial advisory firms, I was having some trouble explaining the concept of the model client experience to the financial advisers and field managers. Finally, I took the managers out into the parking lot and said, "Let's pretend that you are a new prospect and that this is your first visit here. You are standing in the parking lot at this point. How are you feeling about the firm so far? On a scale of one to 10, how would you rate your experience?"
Their answers were insightful. The signage was poor, so it made it difficult to find the firm. They recognized that this would make prospects uncomfortable, because they may not be sure that they are at the right location. A little stress makes the sales process much more difficult. On the other hand, the parking was easy and close to the office. The outside of the building was neat and clean. The overall parking lot score was an eight; so far so good.
What happened after we entered the reception area was a bit more disturbing to them. The company receptionist was AWOL. The space was dark, dingy, and messy. There was no artwork or plants anywhere. The chairs were uncomfortable to sit in, and reading materials were nonexistent. They offered water served in a Styrofoam cup to their prospects.
The advisers and managers gave this part of the experience a score of four. I thought they were too generous--in my mind it was a two. They had just taken their overall score from an eight to a two in less than 50 feet, ultimately making their entire sales process more difficult. All of the other prospect contact points would need to be rated eight or higher, in order to have a good chance at solidifying a relationship with a new prospect and to make up for the bad first impression in the reception area.
We then went through a few other steps--what the office looked like as the prospect walked back to the financial adviser's office, meeting the other staff people, and sitting in the adviser's office. Everyone said the same thing to me. "But Katherine, this is so much better than it used to be!" My response: "That may be true, but does a new prospect know that or even care?" They had not yet gotten used to looking at everything through a client's lens. They were still thinking about the office from the perspective of what suited them personally.
My recommendations about how to improve the reception area? Clean the place up! Change the paint color from insane asylum white to something inviting, rich, and warm, like camel, deep green, or even navy. Order some better quality furniture. Make sure that all of the lighting is bright and cheery. Provide some decent reading material for clients. Once in place, these improvements would push the score to a solid, mediocre, Lake Wobegon five.
If you want to reach a Starbucks nine or 10, on the other hand, then add these extra touches to your reception area:
- Go to Tuesday Morning or Home Depot and get an oriental carpet for the floor. (Cost--about $250.)
- Buy a small toaster oven and refrigerator cookies. Make sure that each client and prospect gets a freshly baked cookie when they arrive. (The toaster oven costs about $60.)
- Also offer cheese and fruit for those on the South Beach Diet.
- Serve bottled water, juice, tea, and fresh coffee in crystal glasses or china cups. These are available at Mikasa for about $3 per glass. Make sure you use a tray and nice napkins.
- Play some soft music. Not elevator music, but soft jazz or classical.
- Teach the receptionist to say, "You must be Ms. (or Mr.) Jones, we have been expecting you."
Note that the expensive part of this process was just getting to Lake Wobegon status. It was the paint and furniture that cost the most money. Going to the next step and creating a full Starbucks experience was not overly expensive; it simply required some thoughtful planning and making sure that everyone in the office understood they were in Starbucks, not Lake Wobegon.
I happened to be in a field office of one of our broker-dealer clients last year during a firm-wide conference call. To free up the advisers, one of the registered sales assistants was answering the phone. It was painful to watch him deal with clients who called in with service issues. He was short-tempered, rude, and far from helpful. You could tell he did not think responding to service requests was part of his job. Clearly, this did not even meet Lake Wobegon standards. So forget about getting any referrals from these clients. They had gotten a level two experience, and after enough of them, they will be looking for another adviser.
Unfortunately, this particular situation could have been resolved easily with little or no cash outlay. By bringing the assistant into the discussions about the model client experience, he would have known that his job was to treat clients well and go beyond the service provided by other firms. Like everyone in the firm, the sales assistant was responsible for making every contact a client has with the firm a Starbucks experience.
Once you have looked at all the client touch points in your office through your secret decoder ring, start to think about ads, marketing materials, seminars, and telephone staff. These, too, will probably need to be reworked to match your model client experience. Over time, you should notice happier clients, easier sales, and a lot more referrals.
Katherine Vessenes, JD, CFP, is a nationally known author and speaker, focusing on sales, marketing, compliance, and practice management issues for broker-dealers and financial advisers. She can be reached at katherine@vestment.net or www.vestment.net.
