In a crowded planning market, the only thing that sets you apart is how your clients perceive you, and your services. So it pays to make sure they have a good experience. Leyla Banaei explains.
One of the most significant events of the past year was the release of the Ripoll report, which came out with 11 recommendations for reforming the industry. As a profession, we are all trying extremely hard to understand the implications of the findings and how to actually implement them in our day-to-day business. The current hot discussions and debates all focus on: how we will now adapt to our new environment; transitioning to a fee-for-service model; maintaining our profitability (by reducing our cost to serve); the pricing model that will apply; the cost of our advice, and how we will need to convince clients to pay for it.
But nowhere in these discussions – that take place daily, online and offline, in our industry – has there been a focus on the client, or much thought given to how we can improve the “end-to-end” financial planning experience of the client. There is no need to over-complicate things. If we examine the recommendations of the Ripoll report closely and observe it purely through the lens of our clients (and not the regulators, product providers or industry associations, nor even our own judgment as advisers), we will find that it is quite simple. The overall recommendations all come down to protecting the client but, most importantly, creating a positive, reliable and trustworthy end-to-end experience for the client in the financial planning process. Research by BRW magazine shows that the most successful businesses are those that have a clearly defined client target market and design their processes and services around the needs of those clients, by giving them a holistic, end-to-end experience.
These businesses seem to thrive in both good and bad times. So what is the answer for us, and our industry? How do we apply these recommendations practically? Some say it’s not a simple answer and you cannot take a “cookie-cutter” approach to conducting a successful financial planning business. However, no matter what type of financial planning business you run, the answer is in designing your services to completely focus on your clients and their needs. It is about designing your services to satisfy these clients’ needs, but also to make them feel that they are being looked after above and beyond their expectations. It is all about mapping, improving and delivering valuable experiences to your client in their financial advice journey with you, whether it is wealth creation or wealth protection, retirement planning or just ensuring that their finances are in order. It is the “feeling” that they are left with after interacting with you that they will remember, and that is the most important thing.
Client Experience Management (CEM) is the term often used to describe this process of “engagement” in business practices that are based on the client’s holistic experience; practices that go beyond transactional client service and focus on building a loyal client base, with an emphasis on understanding and optimising the end-to-end client experience. CEM is concerned with all your client interactions, not just those that lend themselves to the advice process. It deals with the client’s perception of value, which has both functional (“Did it do what it was supposed to do?”) and emotional (“Did I enjoy this experience?”) components. Some CEM proponents, most notably CEM author and professor Bernd Schmitt, go so far as to say that products and services can be turned into experiences. Applying this to the financial planning process, you can see that by engaging your clients emotionally in the process, by giving them an endto- end experience, you can achieve client satisfaction and client loyalty and therefore a successful practice in any economic cycle.
It’s possible that if the industry had been offering an end-to-end service, based on clients’ needs, before the global financial crisis hit, then none of the investigations and inquiries into the industry would have been necessary. By applying CEM principles, you will be able to see the client from the “right brain” perspective – that is, perceptions, feelings and interactions that are harder to quantify but are so valuable, nonetheless. Instead of just looking at how valuable the client is to your financial planning practice, CEM will help you to inspect your advice and services and their value to the client from the client’s point of view, and how important this is in the client’s eyes. If you want to thrive in this new landscape and forge ahead, you must start to design your business around your client’s needs and the holistic end-toend experience they have with you and your business. It is not as complicated as it is hyped up to be, and what it takes is simply connecting with your clients on a deeper level – a more “human” experiential level, as the foundation of this new era.
A good start is taking the five basic steps in the Client Experience Management framework and applying them to your business. This framework provides analysis, strategy and implementation of the CEM process for your business:
1. Identify your core client or client groups (target market).
2. Understand the advice needs of this group, and how they wish to experience your service.
3. Create a clear message to communicate your value, and design a process to meet their experience.
4. Implement your end-to-end client experience program across your business.
5. Engage in continuous innovation.
Implementing a CEM System is all about going beyond having clients that are just satisfied and building a loyal client base that advocates you and your business. We need to continuously track key client feedback about their experience with us – including overall client satisfaction, client suggestions and requests, and even client complaints. These measures provide advisers with critical information on how well individuals in the business – including themselves – are performing, with respect to client-focussed performance. In turn, these measures should be compared against the number of new clients engaged, total client defections, retentions and client referrals. These measures will assist to continually improve operational and service standards within a financial planning practice in a client-focussed manner, with the client as the core of your business, and not products.
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1. Identify your core client and their needs
A strong end-to-end client experience starts with knowing who your ideal clients are, and understanding their needs. This includes not only understanding their demographics, their profession, their day-to-day
fears and frustrations, and their goals and aspirations, but how they want to be treated and what they expect from their experience with you. Designing your end-to-end client experience to assist them in achieving better outcomes in their day-today life can be done by segmenting your existing client base, and focussing on the client experiences sought by each client group, rather than by funds under advice or how long they’ve been a client of your firm. Client surveys should focus on experience expectations, and not necessarily on your past. Understanding what your clients expect in future is much more important in designing a client experience program than looking back or focussing on your perceived shortcomings.
2. Understand how they wish to experience your advice
The foundation for a client experience that will satisfy your existing clients and prospects is understanding your core clients’ advice needs. If you can understand these, and through your advice ease the stress and pressure of everyday life for them, by taking a more holistic approach to their life, you have achieved true client experience management. Understanding and mapping your clients’ needs takes consistent effort and commitment. No two clients’ risk profiles are the same. Clients’ expectations for service vary. Just like we track our clients risk profiles, we must also track our clients’ expectations and attitudes. Regular feedback through surveys or informal interviews should cover the clients’ satisfaction with following:
- frequency of client contact;
- financial planning advice, and recommendations;
- timeliness of service delivery;
- awareness of products and services, and their benefits;
- level of professionalism experienced;
- overall perception of value received .
3. Create a clear link
Your tangible services (such as investment advice, superannuation and retirement advice) must match the outcomes and experiences your specific client group is seeking. Your clients need to understand how your business is different from others. If they can’t tell (through the experience you provide them), they will compare you on the only thing they can measure: price. If one of the first questions you hear is, “How much?”, then you’ve got a problem. When you can find a way to clearly differentiate your business through client experience, then you’ve not only got a competitive advantage, you’ve got the recipe for creating life-long loyal clients, which will translate into a successful business. And this difference comes down to the client experience. Start by asking yourself why this particular core group of clients will use your business. What outcomes are these clients seeking by having you as their adviser? What experiences can you give them based on your skills, resources and services you can provide? And are these experiences in line with what the clients’ expectations are, as articulated by the client? You must know exactly what experience it is that you want to provide to each client segment, and you must have a clearly defined process for delivering this seamlessly in all areas of your business that “touch” the client.
4. Implement the client experience process
Clients must have confidence that you will deliver on the promises made to them through your branding, reputation and the outcomes you produce. You need to deliver this at every “touch” point with your customer. Any time they experience your business – whether it is by dealing with your support staff in person or on the phone, your website, communications by mail or electronically, your brochures, client reviews or any point of contact with you and your business – the client experience needs to be consistently repeated. This is like making regular deposits into your clients’ “emotional bank account” by making them feel good and delivering to their expectations and beyond at every point of contact they have with your business. It takes a while to build up a large credit balance in the emotional bank account, which allows us to make the occasional slip. But if you have only made withdrawals, your ability to develop a relationship based on positive client experience, and hence trust, is unlikely.
5. Engage in continuous innovation
There are more and more financial planners providing similar services and advice every day. A key question to ask yourself and your team is, how does your client experience make you different from all the other planning businesses? How can you continue to differentiate yourself by shifting the focus away from tangible services that any financial planner can provide, and on to your clients’ experiences? The key result of an effective client experience program is to have your clients remember favourably the experience they had with your people and business among all the other contact and marketing moments they have every day.
