Recent chaos in world equity and credit markets might make it seem essential that all advisers develop and implement an effective client communication program for their business. But does it?
We all know intuitively that it makes good business sense, on a number of different levels, to regularly “touch” our best, or “A” class, clients. Until now there has been no reliable marketplace data available to actually quantify this benefit.
However, with the release of the Future Ready III* research paper, Business Health has been able to prove a direct correlation between “A” class client contact and practice profitability.
On average, practices that contact their best clients more than 10 times a year (and in this context contact can be written, electronic, telephone, group functions or face to face interviews) generate 79 per cent more profit than practices that touch their best clients fewer than five times a year.
It is also interesting to overlay these profitability findings with the data collected from the 30,000-plus Australian clients who have participated in the Business Health CATScan client satisfaction survey.
There is also a direct link between effective client communication and client referrals. Where advisers scored highly in the “communication” section of the CATScan, almost 95 per cent of their clients indicated they would be willing to refer their adviser to friends, family or associates.
However, while the willingness of clients to refer is an extremely important lead indicator, of greater value to an advisory practice is the number of clients who have actually referred their adviser to someone they know.
Again, the CATScan data clearly showed that the clients of the most effective communicators have actually referred their adviser over 30 per cent more often than the clients of the least effective communicators.
Based on these findings, advisers should review the effectiveness of their client communication programs. There is, indeed, a very real business benefit in getting this right. You should ask your clients what they actually think of the current communication they receive and whether they would, or indeed have, referred you to someone they know.
You may also wish to consider the following tips from Business Health as you look at just how and when you communicate with your clients.
* Since 2002, Business Health has released a series of white papers providing a comprehensive insight into the health of the Australian advisory industry and its preparedness for the future. The third in this series, Future Ready III, is based on the consolidated analysis from Business Health’s HealthCheck data warehouse which now contains information on over 1000 Australian advisory practices.
Business Health’s Five Key Tips to More Effective Client Communication
Recent research in America indicates that high net worth clients expect 18 contacts from their adviser in a year. Business Health’s HealthCheck analysis revealed that 53 per cent of Australian advisers still contact their “A” class clients less than 10 times a year. The key to any effective client communication program is regularity.
Don’t rely on one communication method alone. Your communication program should incorporate a mix of one-on-one contact, group functions, telephone calls and written correspondence. And don’t forget email – the CATScan research shows that more than three- quarters of all clients now have access to email.
Avoid industry jargon and overly technical language. All the great communicators have the ability to relay complex issues in a series of simple easily understood messages.
Make sure your client communication is truly client focussed. The best communicators understand what is important to their clients and tailor their communication accordingly.
While all your clients must be treated fairly, your very best clients
deserve a differentiated service. Make sure your communication program recognises your “A” class clients.