Business Management Challenges

“Effective leadership is putting first things first. Effective management is discipline, carrying it out.”

Peter Drucker

Is this your challenge?

Financial and wealth management practitioners worry about how effective their business is running.  Ultimately, these worries come to rest on the relative engagement of the client base, a direct outcome of client service.  If clients are engaged, then growth is enabled.

An investor expects his or her investments to grow in value. A company’s investments in plant and equipment are expected to make the company more profitable. Assets are valuable when acquired, with the potential for increased worth over time.

Whether an asset increases in value is a function of monitoring for an investor (e.g. selling after reaching a target gain) and maintenance for a company. An asset that loses value, an analyst would say, is usually linked to failed process or neglect.

A leader of a professional services firm has a proprietary asset in its client base. However, even for name brand firms, it’s common for client interactions to creep toward transactions instead of value-adding relationships. The excitement of new clients, with their new issues and challenges, invigorates a firm far more than attending to a long-standing client that faithfully remains “on the books.”

On the other hand, word-of-mouth testimonials the client gives to his or her network (often without the practitioner even knowing it) ultimately lead the firm to rising profitability along with a substantial reputation. A client loyalty program serves the same purpose for the client-base-as-asset principle as investment monitoring or equipment maintenance. The good news is such a program costs little in out-of-pocket cash and is highly manageable if done with consistent diligence.

Loyalty originates from two pathways: 1) “the client is the center” even after the actual revenue-producing event and 2) the practitioner’s willingness to engage in active listening in all client interactions.

“Get client referrals” is a frequent suggestion for any professional services firm struggling to fill a sales funnel. But clients are increasingly wary of giving names to a practitioner for fear that something at the firm unbeknownst to the client will reach out and bite the friends/family members/colleagues the practitioner contacts.