We have a challenging year ahead of us. retaining clients will be critical for advisors who lack experience at running a business. The word "business" is the operative word. Above all, advisors must understand that their practice is a business like any other and should be operated as such. This is why an excerpt from How to Talk to Customers, by Dianne Berenbaum and Tom Larkin, caught my attention. The authors cite a study by the Rockefeller Corp. that listed six reasons why people stop doing business with a company:

• Death: 1% of lost clients
• A move or relocation: 2% of lost clients
• A relationship with a salesperson: 4%
• Price and other relevant costs: 11%
• Dissatisfaction with the product: 14%
• Indifferent attitude from someone representing the company: 68%

Please note that last item. How a company feels about its customers and how it treats them is critical to that company's success. Your clients are customers, just like people who patronize Home Depot or The Gap. You must nurture them through outstanding personalized service and a caring attitude, or they may go elsewhere. The good news is that client retention is largely within your control—if you make the effort.

All Service Is Personal

I'm going to relate a personal story about service. As you read, think about how your clients would feel if you treated them the way Starbucks treats my wife Lydia. Lydia is a Starbucks fanatic. Her drink of choice is green iced tea with three packets of Equal sweetener. Recently, I went to get Lydia her tea fix. As I paid, the employee asked if the tea was for Lydia. Astonished, I said yes; and then, the employee asked if my wife would like a fourth Equal on the side.

As a Starbucks client, my wife spends less than $10 a week. Yet the workers know her and understand what she wants. This is what we all seek when we go to the hardware store, the office supply store—and to a financial advisor.

Hiding from Clients

That 68% figure in the Rockefeller study is a showstopper. It means that people who were doing business with a firm walked away because they no longer felt appreciated or important.

This will be a problem for advisors over the next 12 to 24 months. As the markets sink, many advisors pull back when it comes to communication and service. Inexperienced advisors will be especially likely to make this blunder. They will avoid clients because of fear—if they talk to clients, they will hear how frustrated, angry and worried clients really are.

Pulling back in this fashion comes when clients need more communication, hand-holding and service than ever. The clients' perception will be that the advisor is indifferent. Given that kind of attitude, clients will look for solutions elsewhere.

If Starbucks can give my wife white-glove treatment, surely you can do the same for your clients. You already know them on a more intimate level.

Move Service Front and Center

For each person in your office, make topnotch service a priority. There are no exceptions. Look for innovative ways to provide exceptional service. Take tax preparation, for example. Be creative; when you send your next mailer to clients, use a colorful envelope—it will stand out and not get thrown away. Include a checklist of deductions that many people miss. Put text on the back of the envelope that asks, "How does federal stimulus legislation affect your tax deductions?" Get the client thinking and open the lines of communication.

People lost a lot of wealth last year, but that is no excuse for losing clients this year. Set aside a day with your team to design an exceptional service system. Establish standards that will help you deliver stellar service every day.

Martin R. Baird is chief executive officer of Robinson & Associates, a consulting firm that helps advisors measure and manage the quality of client service. He may be reached at mbaird@raresults.com.