There are approximately two million active small businesses in Australia (1,927,590* to be exact) and, as we all know, quality financial advice delivered by a professional adviser can add enormous value to the owners of these businesses.
However, as attractive as the self-employed market segment is, research recently released by Business Health and derived from the 40,000 plus Australian clients that have taken their CATScan Client Satisfaction Survey, clearly indicates that, to date, many practices have struggled to satisfy their small business owners.
As the accompanying chart shows, self-employed clients are less satisfied with their adviser’s performance across all nine of the key service delivery areas. Given that the CATScan findings also show that small business owners account for 21 per cent of the average practice client base, this could be of real concern.
If you currently service the small business market or are considering moving into this space, the following insights, derived directly from the CATScan research, might be of value.
Close enough is not good enough
Small business owners generally have less time to devote to their financial affairs and are far more demanding than employee or retiree clients. They have higher expectations and are less tolerant of sub-standard service (as clearly shown in the CATScan chart above).
To be successful in this segment, ensure your back office systems and processes can deliver on time, every time, and your client-facing staff have all of the required skills and present knowledgably and professionally.
Review your solution suite
Self-employed clients usually have a wide range of needs and require advice across a number of different financial areas. Practice principals need to invest heavily in the education/qualification levels of their advisers and continually look to broaden their level of expertise.
Many small business owners can also be quite Web-savvy and they appreciate that an efficient website can save them time and money – an advisory practice with a static “brochure-ware” type of website will not be that appealing.
Broaden your professional network
The needs of most small business owners extend well past the traditional product offerings of most practices. Self-employed clients often value referrals to other professional service providers (for example, accountants, lawyers, general insurance brokers, lending/leasing suppliers, et cetera). A strong alliance/referral network is critical if advisers are planning to successfully target this market.
While it is generally not expected, any referrals you can provide to your small business owners are also much appreciated.
Raise your profile
If your practice has the skills and knowledge to add real value to small business owners, ensure you promote this expertise widely. Put case studies on your website and in your client newsletters. Write a column for your local newspaper.
Contribute articles for your referral partners to use with their self-employed clients and consider running joint seminars. Also make contact with the associations in your area that support small businesses (for example, Chamber of Commerce and local business networking groups). Becoming actively involved in these groups is a quick and cost effective way of lifting your profile.
Seek feedback and ask for referrals
Keep in constant contact with your self employed clients and never just assume you know what they are thinking. If problems do arise, you need to know about them and address any issues quickly. Given that more than half the advisory practices in the country do not formally seek feedback from their clients, many advisers continue to put their relationship with their small business owners (and indeed their other clients) at risk.
And if your self-employed clients are happy with your services, ask for a referral. The CATScan research shows that 86 per cent of all clients are willing to refer their adviser to friends, family or associates, yet only 56 per cent say they actually have. Perhaps they just need to be asked?