I recently read Mark Cuban's book How To Win at The Sport of Business. In it was a chapter called "Why you should never listen to your customer."
I remember Steve Jobs having the same feeling so I went back through his biography to look for his comments (I love the search feature in my Kindle!). Some people say, Give the customers what they want. But thats not my approach. Our job is to figure out what theyre going to want before they do. ..Thats why I never rely on market research. Our task is to read things that are not yet on the page.
Are they right? Is there any value in getting client feedback? Angie Herbers recently wrote a column in which she counseled that client advisory boards are a bad idea. (You can see my response to her on my blog.)
In short, yes, client feedback is invaluable.
First, Jobs and Cuban were in the technology business. That is a whole different industry with entirely different circumstances involving a totally different level of innovation.
Second, feedback is critical in discovering what clients value about what you do. Jobs and Cuban sold products. A consumer would buy a product or they would not. What you have to offer people is a lot more complex. You do a lot of different things for your clients. There are a lot of aspects to the experience clients have with your business. It is not as black and white as the purchase of an iPod. If you want to increase client loyalty, get people talking more enthusiastically about what you do for them, and generate more referrals, you need their feedback.
Third, asking clients what they don't value about what you do can be as profitable as finding out what they do value.
Fourth, differentiating your practice from other financial advisors is all about tailoring the client experience to your target market. Invest more time on those activities that clients find most valuable about what you do, and eliminate doing things that clients don't value, and you will get them talking about you and referring you more often. Cuban and Jobs did not have the opportunity to provide the kind of tailored experience you can provide. Providing relatively low-cost products to millions of users means customization is impossible from a practical standpoint. The typical advisory practice, however, has between a couple dozen and a couple hundred clients. You can tailor your experience to their preferences. You can even tailor two or three different kinds of experiences if you have several groups of clients with different preferences.
Fifth, innovating in the advisory world is easier than in consumer electronics. Steve Jobs was a pioneer who changed life as we know it and changed a couple industries in the process. It is worth keeping in mind that he also had some spectacular failures. The Lisa and Next Computer come to mind. Unfortunately for Jobs, he had to create a manufacturing process and facility before he could know whether the idea would catch on. You don't have that problem. There is a discipline in entrepreneurship called the Lean startup. To grossly oversimplify the process, it comes down to innovate a little, show it to customers, get some feedback, make some changes, go back to customers, and so on.
You can use a Lean approach in your innovation. When you believe that you are "reading what is not yet on the page" take it to your clients to try it on a small scale and get their feedback. Find a few clients who would be willing to try your new advisory service, mockups and samples of a new report format, doing planning a different way. The primary responsibility for innovation is still on your shoulders but you can involve clients almost every step of the way.
Maybe more powerful than any of the five points I highlighted above is that when you ask clients for feedback their loyalty increases. Littlechild has found that 64% of clients expect to have the opportunity to give feedback. And when you make changes based on that feedback it is an even more powerful driver of loyalty.
Do you have any examples of when client feedback was significant, either in a good or bad way?
Stephen Wershing, CFP®, is the author of Stop Asking for Referrals: A Revolutionary New Strategy for Building a Financial Service Business that Sells Itself