Written by: Brett Davidson | FPadvance
Out of service
How many businesses do you interact with where the service is total rubbish? If you’re like me, then the answer is “far too many”.Let me give you some examples:My big local hardware chain store, selling hardware supplies for the garden and outdoors, is appalling. There’s hardly any staff, and those I’ve spoken to are unenthusiastic and know very little about the ten million products that they stock. I don’t blame the individual staff for this, by the way; a fish always stinks from the head.It’s so bad I’ll do anything to avoid going there. The only time I do go is when I can find something I know and understand myself (like a light bulb).I’ve written before about restaurants and eateries that have a ‘Wait Here to be Seated’ sign at the door, only to leave you hanging for way too long. It’s a really poor first impression.I also remember one Friday night in a packed bar in London. Seven people across and three deep, with two staff behind the bar. Just to rub it in, the bar staff did the fancy dance, juggling bottles and ingredients as it took them five minutes to make one drink. Who could have possibly foreseen that the bar would be busy on a Friday night? Ever thought of opening a beer and wine service area separate to cocktails?I feel so much better for getting all of this off my chest, so thanks for sticking with me. However, there is a very serious point.
Minimum wage, minimum enthusiasm
The supposed rationale in all of these businesses is that wages are your biggest cost, so keep them low. However, this line of thinking is short sighted in the extreme. Customers walk out the door without buying anything and never come back again, or do buy something but vow never to return. That’s a far bigger cost than a few extra staff, and it never shows up anywhere in the P&L.As one of my old business school lecturers said, “Don’t let the accountants run the company.”I’m sure as a customer you’ve often thought the same thing when you’ve had a poor experience.
The Best Buy boost
I recently came across an article in one of my regular emails from Verne Harnish, author of
Scaling Up: How a Few Companies Make It and Why the Rest Don’t. It was about Best Buy, the big consumer electronics group in the US.Hubert Joly, the CEO who has lead a turnaround there, has no retail experience. Best Buy’s stock even fell ten percent the day he was named CEO. However, their stock has quadrupled in the last six years, despite the fact they were supposed to be destroyed by Amazon (like every other retailer).One of the keys to the turnaround has been providing ‘in-home advisers’ who advise on and install the stuff you purchase. Salespeople have been upskilled to focus on consultative selling. In the words of Bryan Bucknell, a self-proclaimed “longtime sales dude” at Best Buy, the sales staff are aiming “to establish long-term relationships with their customers, rather than chase one-time transactions.”“Be a consultant, not a salesperson,” Bucknell says. “Use phrases like: ‘How would you like it if…?,’ ‘Do you think it would help if you could…?,’ ‘Have you ever thought about…?’ ” (Source: Bloomberg, see
full article below)As Verne said in his email, “See, it’s not an industry knowledge issue, it’s a leadership issue”.Related:
Are You Ready for the Future of Financial Planning? Lesson learned
It’s not just retailers that are petrified of Amazon. When they bought Whole Foods, other supermarkets held their breath. Same when they bought online prescription startup PillPack, or when they announced their health care partnership with Warren Buffett’s Berkshire Hathaway and J.P. Morgan Chase.We live and work in the age of Robo advice, and the incredible developments in artificial intelligence (AI). There are plenty of reasons to fear our own ‘Amazon moment’; the realisation that a tech-driven solution can provide what we sell, but at a much cheaper price.Yet the lesson from Best Buy is that with a focus on client needs and an increase in skills, you can absolutely compete with a price-led proposition. Even from a company as big and powerful as Amazon.Do you, and the advisers that work with you, have the skills to continually hold high-quality conversations with clients? And remember the bar is always getting higher. Standing still in this area is unlikely to cut it over the long term.
Less Can Be More
Here’s a great example of doing more with less.When you start reflecting on the client experience you provide, the one thing that comes up over and over is the amount of paper and information that advisers deliver. It’s just too much and no client wants it.Most firms simply blame the FCA and their compliance people for forcing them to go down this path. They then hire more staff to keep up with churning out the paperwork and reports.Great firms ask themselves how they can do less. Not in a sleazy, buck-the-system kind of way, but in an effort to make the client experience better; to reduce the information overload (a win/win scenario).I’ve encouraged many firms to stop writing a Financial Plan for clients (blasphemous, I know). What I mean is ceasing preparation of a plan before the adviser and the client have agreed the strategy and way forward.A strategy can be researched by the adviser, discussed with and understood by the client, all before a report gets written.Only after a final set of recommendations is agreed should a suitability report be prepared for the client.This one change to the advisory process can save hours and hours of preparatory work in the back office for your paraplanners, advisers and administration staff. It also makes the advice process a lot more customer friendly.Working out what to do for a client takes two hours. Turning it into a written Financial Plan can take five or ten. If you strip that out of your process you save time; need less people; increase client satisfaction; and up referral rates.Time constraints can make you more productive too. As the old saying goes, if you want something done, give it to a busy person. Lack of time forces you to get organised (just ask any parent). It also forces you to prioritise; to choose what’s most important.
Asking the right questions
I’m paraphrasing Daniel H. Pink in his book,
To Sell is Human, when he says that we were taught that the highest value in selling is problem solving. That’s old school. Today, Pink says, the highest value in selling is problem identification.And this is exactly what well trained and skilled advisers assist new clients with. The client presents with what they think is the problem: “Should I invest in x or y? Should I buy a pension? Etc.”Average advisers answer those questions directly, take an order, and make a sale.Great advisers ask the client more questions. Questions that allow the client to discover for themselves what the real issue is.For example:
Where would you like to get to financially? Why is that important to you? What value can I add? What does good look like as an outcome here? What are the implications of doing nothing? What have you thought of already? What concerns do you have about resolving this issue? Or any other issues? How will you measure our performance?Usually the real issue is far larger than what the client came in for. Issues like, “How much is enough?”; “How do I best organise my finances to allow me to live my ideal life?”; or “How do I help or protect my family?”
Service first
Like Best Buy, the best Financial Planning firms are doubling down on the things that their ‘stack ‘em high, sell ‘em cheap’ competitors can’t do. And it’s got little to do with finding the best investments, and everything to do with helping clients solve their own issues via a facilitated, consultative, selling process. Building lifelong relationships that are highly valued and worth paying for.Great service beats low prices every time.
Best Buy Should Be Dead, But It’s Thriving in the Age of Amazon The big-box retailer doesn’t just want to sell you electronics. It wants its in-home consultants to be “personal chief technology officers.”
