{"id":494,"date":"2022-05-03T06:00:54","date_gmt":"2022-05-03T10:00:54","guid":{"rendered":"https:\/\/cornerstoneportfolioresearch.com\/?p=494"},"modified":"2023-03-31T16:12:56","modified_gmt":"2023-03-31T20:12:56","slug":"5-tips-for-increasing-retention-encourage-lifelong-clients","status":"publish","type":"post","link":"https:\/\/cornerstoneportfolioresearch.com\/management\/5-tips-for-increasing-retention-encourage-lifelong-clients\/","title":{"rendered":"5 Tips For Increasing Retention: Encourage Lifelong Clients"},"content":{"rendered":"
Converting prospects is important. However, it\u2019s only half the battle for long-term success: You still need to nurture lifelong clients.\u00a0<\/span><\/p>\n This isn\u2019t simply a would-be-nice thing. They\u2019re essential to a firm\u2019s survival. In fact, it\u2019s no exaggeration to say that they are the bedrock of a healthy firm.\u00a0<\/span><\/p>\n Long-term clients can also be a tremendous asset through word-of-mouth promotion and new referrals. So, if your retention numbers are underwhelming, we\u2019ve got tips for aiming higher.<\/span><\/p>\n The headline above may elicit some eye rolls. So, if you already know the answer forward and backward, we apologize.\u00a0<\/span><\/p>\n Nevertheless, it\u2019s an important question to ask. The most important step toward achieving any goal is defining its benefit.\u00a0<\/span><\/p>\n So, before we get to encouraging long-term clients, let\u2019s take a look at why it is a good idea. The first reason is a no-brainer: Any business with steadily-returning customers will be more stable and profitable.\u00a0<\/span><\/p>\n It\u2019s true for the manufacturing industry\u2014and it matters more for service-based businesses like the financial industry. A number of customers may buy another product from an appliance company, even if their last one was a disappointment.<\/span><\/p>\n Advisors don\u2019t have that luxury. When you\u2019ve known a client long enough to consider them a friend, you might be forgiven for a mistake. It can take <\/span>years<\/span><\/i> to reach that point, though.\u00a0<\/span><\/p>\n Until you do, every misstep could potentially be your last within that relationship. Don\u2019t let this worry you needlessly, but it factors into the larger point: Long-term clients don\u2019t have to be won again.\u00a0<\/span><\/p>\n Of course, wise advisors don\u2019t take them for granted. A lifetime client has to be earned, but they\u2019re worth the effort. In the long run, that relationship can yield much more than just profits.\u00a0<\/span><\/p>\n For instance, sometimes they can teach you things; life lessons your CFP instructor never covered. The more they trust you, the more some will confide, imparting stories and wisdom that benefit you as both a planner and a person.<\/span><\/p>\n You can\u2019t beat their referrals, either. As many<\/span> as <\/span>70% of millionaires<\/strong><\/a> will probably refer others to their primary advisor. This client group may seldom seek referrals.<\/span><\/p>\n A very select group may even be willing to provide a testimonial (at least in print). That\u2019s absolute marketing gold.\u00a0<\/span><\/p>\n As promised, what follows are tips on getting clients to stay long-term. We\u2019ll begin with the simplest first.<\/span><\/p>\n The last thing you want anyone to feel like is a number. So, make every meeting a valuable experience. Stay professional, but keep reviews detail-oriented and personal.\u00a0<\/span><\/p>\n In other words, try to demonstrate that you appreciate their trust individually. A yearly letter and Christmas card are nice, but they\u2019re not enough, by themselves.\u00a0<\/span><\/p>\n When clients come in to see you, be ready to share insights that empower and excite them about your portfolio management. If there\u2019s a milestone in their lives like a new job or childbirth, ask how things are going there, too.\u00a0<\/span><\/p>\n People can tell the difference between a thoughtful visit and canned, cookie-cutter presentations. You\u2019d be surprised what even the ones who seem perpetually hunched over their phones appreciate, at times.<\/span><\/p>\n In other words, don\u2019t<\/span> just<\/span><\/i> be attentive. Be upfront about your actions, as transparent as possible, and as available as you can remain during business hours.\u00a0<\/span><\/p>\n Over 50% of people who\u2019ve left a firm did so because their advisor never reached out to them proactively.<\/a><\/strong> It’s okay to be brief, as long as you’re polite and friendly about it.\u00a0<\/span><\/p>\n This doesn\u2019t mean spouting doom and gloom. However, playing cheerleader to the point of encouraging people to bank their life\u2019s savings on a might-be never leads anywhere good.\u00a0<\/span><\/p>\n Instead, consciously plan every interaction to nurture metrics-based expectations. This ties in with #2: You can\u2019t just be honest, alone. They have to see and understand that you act with integrity.\u00a0<\/span><\/p>\n Saving clients from disasters is great. However, if they don\u2019t know that you do, you\u2019ve missed out on a massive value-add. So, be upfront about encouraging realistic expectations\u2014and why you do it.<\/span><\/p>\n In some cases, you may be covering bases 1-3 well and<\/span> still<\/span><\/i> not meeting your retention goals over a given period of time. This is the point at which you might want to consider calling for backup.\u00a0\u00a0<\/span><\/p>\n An Outsourced Chief Investment Officer (OCIO) may be just the help you need. Before we cover how, let\u2019s consider <\/span>why:<\/span><\/i> Adding the salary, bonuses, benefits, et cetera for a new employee isn\u2019t always feasible.\u00a0<\/span><\/p>\n Outsourced CIOs can be contractors that work for fees rather than wages. You can list them on a meet-our-team page, but there\u2019s no parking space to provide.<\/span><\/p>\n At the same time, unless someone is a multi-talented prodigy, you may not want to make a principal your CIO, either. Between financial planning, estate planning, and the rest, there are <\/span>a lot more hats to wear <\/span>(link to blog: <\/span>Improve Time Management by Partnering With Outsourced CIOs)<\/span> than just managing assets.<\/span><\/p>\n \u00a0<\/span>Sorry: We\u2019ve digressed. <\/span><\/i>As we discuss how an OCIO can help you retain clients, let\u2019s get back to the list.<\/span><\/p>\n These are concerning times. So, share what we believe can be the best, most metrics-based reassurance you can with clients. We believe that having a CFA Charterholder on your team sends a strong, positive nonverbal message about risk management, too. That\u2019s one of many ways in which an OCIO on your team can help.<\/span><\/p>\n The financial winds can shift profoundly within an hour. Even in less volatile times, basing plans on up-to-date investment research is vital. Unlike a traditional CIO, who may only support one firm or mandate, an outsourced CIO may support multiple firms or mandates, likely requiring them to stay even more current on markets and the economy.<\/span><\/p>\n We have a much deeper article on OCIOs <\/span>here<\/a><\/strong>.<\/strong> We could share further, but it would be easiest if we could converse with you.\u00a0<\/span><\/p>\n So, if you\u2019d like additional details, please <\/span>contact us<\/strong> <\/span><\/a>for more information.<\/span><\/p>\nWhat\u2019s the Value of Lifelong Client Relationships?<\/b><\/h2>\n
So How Do You Encourage Client Retention?<\/b><\/h2>\n
1. Value your clients.<\/b><\/h3>\n
2. Communicate diligently, clearly, and effectively.<\/b><\/h3>\n
3. Encourage realistic expectations.<\/b><\/h3>\n
What Else Works?<\/b><\/h2>\n
4. Possibly provide peace of mind.<\/b><\/h3>\n
5. Maintain solid, informed analyses.<\/b><\/h3>\n