by Tony Vidler
Many advisers are unsure about what they offer advice clients – cheap and cheerful advice on the fly, or a superb planning experience. Both do the job, albeit in different ways. But offering fast food at silver service prices is a business model that will struggle…and that’s what happens when there is no clarity on what you are offering advice clients.
It is this absence of a clear and compelling focus coupled with service delivery that reflects the value proposition which creates the difficulty of obaining buy-in from prospects.
Instead advisers often name what seems to be an expensive fee on the surface, and in return we try to convince consumers of how magical – or predictable – our process is, and promise that we will also love them forever more if they do indeed become a client. Inevitably price resistance follows.
Some planners and advisers do however believe so strongly in the proprietary process, or their comprehensive planning service that they see it IS the value for clients. Of course, they may well be right. However, describing a process which is essentially technical in nature and somewhat mysterious to the average consumer, and then asking the consumer to “trust the process enough to pay for it in advance” is a challenge. The consumers do generally feel that they are paying in advance, even if our invoice is not presented until after they have received the plan, because the plan itself has not proven its worth until they have followed the recommendations and allowed the requisite time to pass to see the results. So you do have to dress it up properly if you want to sell it a premium price.
Or maybe not.
If one is wedded to the process and wishes to make that the core of the value proposition and simultaneously minimise price resistance, then an excellent strategy is to break it down and sell the components. Don’t sell the entire comprehensive planning process as one relatively large fee. Sell it in instalments at modest and affordable fees….package it and sell it in incements.
To illustrate let’s use just a couple of examples of the very front end of Financial Planning….the most boring (yet potentially most important) parts for most consumers: cash management and debt management.
I would guess that a lot more potential future clients would be interested in these services, rather than “financial planning”:
These are just a couple of quick and easy examples to make the point: We are usually dealing with people who have a particular hunger now, and they want it fixed quickly and easily. They want to grab something from the drive-through window at a fast food joint, and we talk to them about a 7 course degustation dinner which we promise will be a life-changing experience for them. They want fast food and we are often talking about fine dining. The result? We struggle to get engagement.
Break the skills and services down into digestible chunks for them, and put it in language which links the service to the outcome that you help them achieve.
You are unlikely to meet any serious price resistance then.
If however you definitely want to deliver the “fine dining” version of financial planning then there needs to be a lot more wrapped around the experience than a mere technical process. People who pay for fine dining are buying an experience; not food. Comprehensive planners who want to sell the entire package up front would do well to remember that, and emulate it.
Sell the service, not the planning process or the plan itself.