Most often, overall performance isinfluenced by retention and expansion. It is logical for firms to thinkabout expansion first, but retentionis more important. Learn to keepthe clients you have, and keep themhappy, before you can move on tobringing in more clients. The samegoes for employees.
Again, this is no different than investing. Who earns more over the long term:the day trader with a bunch of turnover,or the buy-and-hold investor? Retentionis about building and improving on whatyou already have, not trying to buy more.Additionally, if any advisory firm getsfocused solely on expansion (addingmore clients and employees), then theyaren’t paying enough attention to whatis already there to help you save enoughtime to do more.
Let’s take a look at these drivers ofrevenue, profits and valuation and whatyou can do today to improve them. Theanswers might surprise you.
HOW TO INCREASE YOUR CLIENT
Moving the client referral rate is aboutinnovating and improving your clientexperience. The better you serve clients,the less complacent you become. Andthe more you become front and center inyour clients’ minds for all things financial, the more new clients they refer.
To do that, you increase your communications that add benefit to theirlives. This isn’t about a blog post onyour website. Increased client communication is better communication, andit begins with educating your client onyour client experience process.
What one action can we take today toimprove client communication? Usually,the answer is training the client.
HOW TO INCREASE ADVISOR
This is about your operations. I haveno doubt that the fastest-growing firmsare one-firm, one-process organizations.
That means you have one cohesive ser-
vice model within the organization that
all advisors follow. Every advisor oper-
ates the same way.
Growth problems occur and capacitygets limited when different people inthe same firm operate as if they wereon their own. You must get everyoneoperating under the same process toimprove the speed of everything elseyou do — from training new advisors toserving clients.
What does our firm need to do toget everyone operating the same way?Again, the answer is training — trainingthe advisor.
HOW TO INCREASE CLOSE RATES
Increasing your close rate is about closing more prospects and closing themfaster. If it takes you two months to winone new client, think about the dramatic difference it would make if it tookyou only one month to close instead.Many firms have good close ratios, buttheir time to close is the real hindrance.A long sale cycle significantly hurtsprofit margins.
What does our firm need to do to
decrease the time it takes to close
a prospective client? The answer is
HOW TO INCREASE LEAD FLOW
Lead flow is last because if you havepoor referral rates, limited capacity anda bad close ratio, then what’s the pointof adding more leads? You should notinvest money in marketing programsthat can generate high lead flow if yourbusiness isn’t ready to accept such leads.
What does your firm need to do toincrease lead flow? The answer is marketing training.
If you’ve understood my point, training is how you can maximize revenue,profits and valuation. The fastest-growing firms do not layer on marketingprograms when things are going poorly.They add them when they are winning.
To get good at any performance, be itsports, investing, or growing a business,you train and train, and keep doing it towin more.
Angie Herbers is an independent consultant tothe advisory industry. She can be reached email@example.com.
Most often, overall performance
is influenced by retention and
expansion. It is logical for firms
to think about expansion first, but
retention is more important. Learn
to keep the clients you have.