Every year at the end of our mystery-shopping program, we contact the individuals and couples who began a relationship with a financial adviser and ask them a series of questions about how satisfied they are; if they would recommend the adviser to someone else; and what else they would buy from the adviser.
The results of the first questionnaire are always overwhelmingly positive, and the rolled-up satisfaction scores range from a high of 9.6 out of a possible 10 – this year the winner was ipac – to a low of 7.5, a score which effectively represents all of the bank planning networks.
These scores are high. In research terms, any score over 8 is good, and any score over 9 is exceptional. What is interesting is that in the weeks immediately after the research, these scores are not uncommon.
What we were looking for when we first started tracking these numbers in 2002 was a type of behaviour called “post-purchase cognitive dissonance”, which is best described as the feeling you get when you walk out of the shop with a new pair of shoes and think that you might have paid too much.
Post-purchase glow
We discovered that what was actually happening was the opposite – that the financial services consumer, after forming a relationship with a planner, was experiencing a kind of post-purchase glow; feeling satisfied, in control and largely (but not always) very happy with how much they had paid and what they were getting.
It turns out that this was occurring because, when planning is done properly, it’s actually a transformational process. There is a state of being before seeing the planner, usually characterised by uncertainty; and a state of being after seeing a planner, usually characterised by increased certainty. It’s when people are in this latter state that they are happiest.
To a certain extent this is not news. Psychologists and neuroscientists have known for the past 100 years that the desire for certainty is one of humanity’s greatest needs; and as brain imaging and neurological techniques have improved, they are able to not only tell you where in your brain this feeling lives, but even what chemicals it releases into your blood stream.
However, before we get too excited and start popping champagne corks over how clever we all are, it turns out that the relationship with an adviser is a lot like all human relationships. The halo of certainty seems to dim pretty quickly; and CoreData’s research reveals that it takes about 18 months for even the most satisfied client – those who score 9.6 on the post-purchase satisfaction survey – to fall to a steady 7, which represents a score of “partly satisfied”.
Expectation hasn’t diminished
Businesses that had wonderful scores of 9.6 on client satisfaction will find themselves with a 7 or 7.5 within 18 months of the first purchase. But interestingly, those businesses that had a score of 7 at first purchase will still be scoring about that 18 months later, which means that the expectation
of service hasn’t diminished.
The reasons for understanding this score are important. If you rate yourself as very highly satisfied with a service, then the price that you are paying for it is usually unimportant. But if you rate yourself as only partly satisfied, then price becomes an issue.
There are lots of reasons for this fall in satisfaction. Partly it’s because the relationship is no longer new; partly it’s because people become disengaged with the process; and partly it’s because most planners simply don’t bother to work on existing relationships, preferring instead to focus
on establishing new ones.
This means that they are turning financial planning into what economists call a “one-time game” – where you focus only on the first sale and not on building the relationship – essentially because all the value occurs in the first event.
But there are always a handful of advisers – though never, I hasten to add, an entire dealer group – who keep their post-sales satisfaction scores high. And they tend to display a very common set of characteristics (see below).
THE KEYS TO SUCCESS
1. Specialise in a particular type of client
Whether it’s engineers, lawyers, doctors, public servants or, in one case, high school principals, they have a narrowness of focus that allows them to develop a single, simple and clear message.
2. Delegate client communication to the whole team
Communication is not always directly from the one adviser. When it comes to the high-scoring advisers, respondents always report that they have a relationship with more than one individual from their financial planner’s office.
3. Communicate more than average
When they do communicate, these high-scoring advisers make it personal. We’ve noticed that this group are starting to abandon email as a communication tool, often relying on it only for documents, and are now more commonly turning to the phone, using both voice and SMS as personal conversation tools. The best businesses are doing it at least six times a year.
4. Have a strong web presence
The businesses with the best scores now all have the best websites – and in some cases, client portals. Ten years ago, when we started this tracking, this was never the case; now it always is.
5. Have a strong customer value proposition (CVP)
Every year we phone the businesses in the survey, and as part of the normal conversation we ask them what their CVP is. The businesses that answer that question well are three times more likely to be able to keep the love alive than those that can’t.
It turns out that if you want to keep the love alive with your clients, the rules are pretty clear: decide who you want to do business with; create a client-facing team that you are confident to have talking to your clients; communicate with clients one-to-one at least six times a year; develop a strong digital presence; and know what you stand for.
As George W Bush apparently once said: “It’s not rocket surgery”.
