The Danger of a Satisfied Client

 In Professional Development

Would your clients say that you’re reliable and that they are “satisfied” with your services? Dr. John L. Evans, Jr. explains that in a highly competitive industry, being “satisfied” may not be enough.

What kinds of experiences do your clients have with you? Would they say that you’re reliable and that they’re satisfied with your services? If so, watch out. In a highly competitive industry, keeping a client “satisfied” may not be enough. Lack of conflict or complaints doesn’t necessarily equal loyalty. It could just mean the relationship is forgettable, and thus, vulnerable to disruption.

According to a study by Russ Alan Prince and David A. Geracioti, only 33.5% of “satisfied” clients and 13.4% of “moderately satisfied” clients said they would give their primary financial advisors additional investable assets. Yet 94.5% of those who identified as “loyal” said they were extremely or very likely to stick with their advisors.1

Think of your own experiences as a customer at a luxury restaurant, hotel, or department store. Chances are your mind jumped to interactions that were either extraordinarily good or extremely bad. But experiences that are just okay? Those typically rank low on recall.

What Are Your Clients “Saying” About You?

The quality of your relationship to each individual client matters more than ever. Today, 72% of online adults use social networking sites, with the 65+ population tripling in the last four years to 43%.2 Your clients talk, and now they can talk to hundreds and thousands of their peers at once. What do you want them saying about you?

Sending your client a signed holiday or birthday card is a nice gesture. But it’s also a predictable one, the “go-to” for any service professional. So think about your practice from the perspective of an outsider and consider creative and consistent ways to make positive impressions.

The Difference Between You and Everyone Else

According to Thomas Fross of Fross & Fross Wealth Management, one of the most successful independent financial planning firms in the nation, there is no silver bullet for client management and retention. Key to your success is varying your strategy based on how your client likes to be engaged. “Just as a balanced investment portfolio should include a variety of investments, a balanced practice management strategy needs to include multiple ways to engage clients and prospects. Different clients will respond to different actions,” Fross says.

Key to your success is varying your strategy based on how your client likes to be engaged.

However you choose to engage, there are three underlying principles that Fross recommends to help your practice stand out above the rest:

  1. Image Is (Almost) Everything

    It isn’t everything, but it matters more than you might think. Think about how your image would be perceived by current and prospective clients. Do you exude professionalism? Having an office, wearing a tie and taking the time to craft a consistent personal brand are all important to your bottom line.

  2. Talk to Your Clients

    Your clients need information and reassurance on an ongoing basis, especially in a volatile market. Make it a priority to engage in frequent and meaningful communication with investors. If you don’t, studies show that they will move on to an advisor who will.

  3. WOW Them

    Do you make your clients feel special? Do you acknowledge them in unique ways? Average isn’t good enough. But when clients feel valued and important, they are more loyal and more likely to refer you.

Providing extraordinary service can also expand your client roster. According to the Prince and Geracioti study, those “loyal” clients provided nearly 12 referrals to their primary advisors, compared to just 2.1 from “satisfied” clients and 1 or fewer from “moderately satisfied.” So that time and effort spent going above and beyond truly pays off in more ways than one.

Cultivate extreme client loyalty and grow your business.

The opinions and views expressed are as of the date published and are subject to change without notice. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. No forecasts can be guaranteed. Opinions and examples are meant as an illustration of broader themes and are not an indication of trading intent. It is not intended to indicate or imply that any illustration/example mentioned is now or was ever held in any portfolio. Janus Henderson Group plc through its subsidiaries may manage investment products with a financial interest in securities mentioned herein and any comments should not be construed as a reflection on the past or future profitability. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.

1Prince, Russ Alan with Geracioti, David A. “Cultivating the Middle-Class Millionaire: Why Financial Advisors Are Failing Their Wealthy Clients and What They Can Do About It.” Wealth Management Press, 2005.
2Brenner, Joanna and Smith, Aaron “72% of Online Adults are Social Networking Site Users” Pew Research Center, August 5, 2013

Knowledge Labs™ programs are for information purposes only. There is no guarantee that the information supplied is accurate, complete or timely, nor is there any warranty with regards to the results obtained from its use.
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C-0419-23454 04-15-21

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