Communicating effectively with your clients requires that you meet them regularly, says Ray Henderson.
How often do you contact your clients? Chances are good that you’re not contacting them enough. Only 50 per cent of financial advisers in Australia contact their top clients more than 10 times per year.
Intuitively, we all know that it makes good business sense to regularly “touch” our best clients. However, according to our recent HealthCheck results, advisers who contact their best clients more than 10 times per year are, on average, 287 per cent more profitable. It is essential that all advisers develop and implement an effective client communication program – especially when it involves “A” clients.
As the following table clearly shows, there is a direct correlation between “A” client contact and practice profitability. The profitability of practices that contact their best clients fewer than five times a year is a fraction of the profitability of those practices that contact their best clients more than 10 times a year.
It is also interesting to overlay these productivity findings with the data collected from the more than 50,000 clients in the Business Health CATScan client satisfaction survey. As you can see from the following chart, there is a direct link between effective client communication and client referrals.
Advisers who scored highly in the communication section of the CATScan could see that 95 per cent of their clients 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 more than 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.
Answering five simple questions (see box) is a simple way to assess the effectiveness of your current communication process.
If you scored a total of:
5 points or less: Consider reviewing your current communication plan and ensuring that communication is frequent, consistent, varied, differentiated to various client segments and specific to client needs.
6-8 points: You are doing some things well but some fine-tuning may be needed.
9 or 10 points: Well done! But remember a successful communication process needs to be reviewed on a regular basis in response to client needs.
Ray Henderson is a partner and director of Business Health – www.businesshealth.com.au
